WASHINGTON - Facing a huge budget shortfall, Maryland may be forced to reduce health coverage for thousands of low-income children unless Congress acts quickly to close the funding gap, a recent policy study says.

As it stands now, the Maryland Children's Health Insurance Program faces at least a $64.6 million shortfall and will operate on little more than half of the federal funding it needs for 2007, according to the Maryland Budget & Tax Policy Institute.

At least 16 other states face a collective $900 million to $950 million funding shortfall in the State Children's Health Insurance Program, a 10-year federal-state partnership grant, according to the analysis released late last month.

"Our feeling from the federal government is we're going to get the money," said Alonzo Robinson, the program's supervisor at the Maryland Department of Health and Mental Hygiene.

But depending on the outcome of the Nov. 7 election, health care advocates aren't so sure that the lame duck Congress will pass the legislation before adjourning for the year.

"If they don't authorize this money, Maryland is in trouble," said Leigh Cobb, a health policy consultant for Advocates for Children & Youth.

Last year, the federal government stepped in to address funding gaps, and Maryland has typically received additional money from a pool of unused funds from other states.

Those redistributions have been funding the program to a great extent over the years, but as other states have gotten their programs up and running, the pot is shrinking, said Henry Fitzer, a deputy budget director with the health department.

If the bill is not passed this year, the Maryland General Assembly would bear the burden of coming up with additional funding and the program may have to resort to capping or freezing enrollment or raising monthly premiums.

"Services could be cut," Robinson said.

In a Sept. 19 letter to President Bush, 12 governors, including Maryland Gov. Robert Ehrlich, asked Congress to "address the short-term funding shortfall, or states will be forced to drop children from their programs or move SCHIP eligible children into already stretched-thin Medicaid programs."

Maryland's program is an expansion of Medicaid. Should the funding fall through, the state would recover what it could from Medicaid, which only matches 50 percent of health care costs as opposed to the health program's 65 percent. There would still be a shortfall that the state would have to make up, said Fitzer.

More than 6 million low-income children and pregnant women were enrolled nationally in 2005. More than 103,000 Marylanders were enrolled in the program this year, according to the Department of Legislative Services.

To complicate matters, the program is up for re-authorization next year. Given its funding woes, there is already much discussion about how future grants should be allocated and whether redistribution among states is an effective means of funding.

Congress cannot just simply write "a check for $900 million when there's billions that states are sitting on and not spending," said Becky Shipp, a Republican aide to the Senate Finance Committee, where the funding proposal is stalled.

Senate aides on both sides of the aisle agreed that the fate of the bill could depend on the Nov. 7 elections.

Sen. Barbara Mikulski, D-Md., is hopeful the bills will advance. She will pay close attention as the program is re-authorized next year, wrote spokeswoman Melissa Schwartz, in an e-mail. "She will continue to work closely with members of the Finance Committee to make sure the Senate is addressing this issue."

Similarly, Rep. Chris Van Hollen, D-Kensington, said it's an urgent issue. "We're just going to push very hard," to have it be a priority in November, he said.

But for low-income residents, the threat of diminished services is no legislative exercise.

"If you add premiums for low-income people, they drop off the rolls," said Cobb. "Those are not good options."

Copyright © 2006 University of Maryland Philip Merrill College of Journalism