State Children's Health Insurance Program; Reserved Allotments to States for Fiscal Year 1999 and Revised Reserved Allotments to States for Fiscal Year 1998

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Health Care Financing Administration

[HCFA-2014-N]

RIN 0938-AI64

State Children's Health Insurance Program; Reserved Allotments to

States for Fiscal Year 1999 and Revised Reserved Allotments to States

for Fiscal Year 1998

AGENCY: Health Care Financing Administration (HCFA), HHS.

ACTION: Notice.

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SUMMARY: This notice provides notification of the reserved fiscal year

(FY) 1999 State allotments available to provide Federal funding to

individual States, Commonwealths, and Territories for expenditures in

the new State Children's Health Insurance Program (CHIP) established

under title XXI of the Social Security Act (the Act). This notice also

provides revised reserved State CHIP FY 1998 allotments, which were

originally published in the Federal Register on September 12, 1997. The

notice describes the methodology and process that HCFA uses to

determine the reserved State CHIP allotments in accordance with section

2104 of the Act. These reserved State CHIP allotments are estimates of

States' FY 1998 and FY 1999 title XXI allotments, assuming that each

State were to submit, and receive approval for, a State child health

plan. Under title XXI the amount of State's allotments for a fiscal

year is available for 3 years for States with approved child health

plans.

Established by section 4901 of the Balanced Budget Act of 1997

(Pub. L. 105-33), the State Children's Health Insurance Program

provides Federal matching funds to States to initiate and expand health

insurance coverage to uninsured, low-income children.

Copies: To order copies of the Federal Register containing this

document, send your request to: New Orders, Superintendent of

Documents, P.O. Box 37194, Pittsburgh, PA 15250-7954. Specify the date

of the issue requested and enclose a check or money order payable to

the Superintendent of Documents, or enclose your Visa or Master Card

number and expiration date. Credit card orders can also be placed by

calling the order desk at (202) 512-1800 or by faxing to (202) 512-

2250. The cost for each copy is $8.00. As an alternative, you can view

and photocopy the Federal Register document at most libraries

designated as Federal Depository Libraries and at many other public and

academic libraries throughout the country that receive the Federal

Register.

This Federal Register document is also available from the Federal

Register online database through GPO Access, a service of the U.S.

Government Printing Office. Free public access is available on a Wide

Area Information Server (WAIS) through the Internet and via

asynchronous dial-in. Internet users can access the database by using

the World Wide Web; the Superintendent of Documents home page address

is http://www.access.gpo.gov/su__docs/, by using local WAIS client

software, or by telnet to swais.access.gpo.gov, then login as guest (no

password required). Dial-in users should use communications software

and modem to call (202) 512-1661; type swais, then login as guest (no

password required).

FOR FURTHER INFORMATION CONTACT: Richard Strauss, (410) 786-2019.

SUPPLEMENTARY INFORMATION:

I. General Background on New Legislation

Section 4901 of the Balanced Budget Act of 1997 (BBA), Pub. L. 105-

33, as amended by Pub. L. 105-100, added title XXI to the Social

Security Act (the Act), which was further amended by Pub. L. 105-174.

Title XXI authorized a new State Children's Health Insurance Program

(CHIP) to assist State efforts to initiate and expand child health

assistance to uninsured, low-income children. Child health assistance

is provided primarily for obtaining health benefits coverage through

(1) obtaining coverage that meets requirements specified in the law

under section 2103 of the Act; or (2) expanding coverage under the

State's Medicaid plan under title XIX of the Act; or (3) a combination

of both.

In order to be eligible for Federal matching funds under the CHIP,

States must submit to the Secretary, and receive approval for, a State

child health plan that describes how the State intends to use the funds

provided under title XXI. The plan must meet certain criteria specified

in the statute, which include benefit packages, eligibility standards

and methodologies, coverage requirements, basic and additional services

offered, strategic objectives and performance goals, plan

administration, and evaluations.

The law limits the total amount of Federal funds for the State

Children's Health Insurance Program and specifies the formula that is

to be used to determine an allotment for each State from this total

amount, as described under section III of this notice.

II. Purpose of This Notice

We are issuing this notice to provide notification to States,

Commonwealths, and Territories of the reserved allotments that will be

available to them for FY 1999, and also to provide notification of

revised State CHIP reserved allotments for FY 1998 (that were

originally published in the Federal Register on September 12, 1997),

for child health insurance expenditures if they have an approved State

child health plan under title XXI of the Act, or to claim an enhanced

Federal medical assistance percentage (FMAP) rate for certain CHIP-

related Medicaid expenditures under title XIX of the Act. States,

Commonwealths, and Territories may submit State child health plans to

HCFA for approval, to be effective as early as October 1, 1997. We

believe that this notification at the beginning of a fiscal year is

necessary to enable States, Commonwealths, and Territories to conduct

advance planning and budgeting for title XXI and CHIP-related title XIX

programs.

Section 2104(b) of the Act indicates that ``the Secretary shall

allot to each State * * * with a State child health plan approved under

this title.'' This language requires States to have an approved State

child health plan for the fiscal year in order for the Secretary to

provide an allotment to that State for that fiscal year. If a State

does not have an approved State child health plan for that fiscal year,

the amount of that State's reserved allotment could be unavailable to

that State and could be allotted to States with approved child health

plans.

Pub. L. 105-174, enacted on May 1, 1998, provides that for purposes

of the calculation of allotments, a State child health plan approved by

HCFA on or after October 1, 1998, and before October 1, 1999, must be

treated as having been approved for both FY 1998 and FY 1999. However,

a State's allotment for a fiscal year may only be used for CHIP and

CHIP-related Medicaid expenditures that are allowable under the

approved State child health plan or the Medicaid State plan. Federal

financial participation (FFP) would not be available for expenditures

made in and claimed for periods before the effective date of the

approved State child health plan or the Medicaid State plan.

The reserved allotments for FY 1998 and FY 1999 in this notice were

determined by application of the formula specified in title XXI of the

Act and described in detail in section III of this notice. Section 707

of the Act Making Appropriations for the

[[Page 6103]]

Departments of Labor, Health and Human Services and Education, and

Related Agencies for the Fiscal Year ending September 30, 1999, and For

Other Purposes (``1999 Appropriations Act''), as enacted by section

101(f) of Pub. L. 105-277, requires that the FY 1999 reserved State

CHIP allotments be determined using the same data used in determining

the revised FY 1998 State CHIP allotments. The effect of this statutory

change is to distribute the total funds available for FY 1999 among the

50 States and the District of Columbia in the same proportions as the

total funds were distributed for FY 1998. However, because the total

funds available nationally for allotment to the States and the District

of Columbia for FY 1999 is $19,950,000 million lower than the total

funds available nationally for FY 1998, the actual FY 1999 reserved

allotments for each State and the District of Columbia is slightly

lower than each State's FY 1998 reserved allotment. Final allotments

for each State will be determined in accordance with statutory

requirements. We plan to issue a notice of proposed rulemaking as soon

as possible on the requirements for the allotment and payment process

under title XXI. Although final allotments have not been determined,

under section 2105(e) of the Act, we have authority to make ongoing

payments based on advance estimates of allowable expenditures. At this

time, we intend to make advance payments to States with approved child

health plans based on these reserved allotments. Issues related to the

allotment and payment process, however, will be open for public comment

as part of the rulemaking process.

III. Methodology for Determining Reserved Allotments for States,

Commonwealths, and Territories

This notice specifies in Tables I and II under section IV the

revised reserved FY 1998 allotments, and the reserved FY 1999

allotments, respectively, that would be available to individual States,

Commonwealths, and Territories for child health assistance expenditures

under approved State child health plans, assuming that each State,

Commonwealth, or Territory qualifies for such an allotment. The

reserved FY 1998 allotments were originally published in the Federal

Register on September 12, 1997. As discussed below, the FY 1998

reserved allotments have been recalculated to reflect the way the

Bureau of the Census compiles reported data on the number of low-income

children in each State who have no health insurance in the March

supplements to the Current Population Survey (CPS), and to incorporate

an increase in the title XXI appropriation, applicable only to FY 1998,

as enacted by Pub. L. 105-100 on November 19, 1997.

In accordance with section 707 of the 1999 Appropriations Act, as

enacted by section 101(f) of Pub. L. 105-277, the FY 1999 allotments

contained in this notice were determined using the same data that were

used in determining the revised reserved FY 1998 State CHIP allotments.

We have applied the statutory formula specified in section 2104 of

the Act in determining the reserved allotments for FY 1998 and FY 1999,

as discussed below.

Section 2104(a) of title XXI provides that, for purposes of

providing allotments to the 50 States and the District of Columbia, the

following amounts are appropriated: $4.295 billion for FY 1998; $4.275

billion for each FY 1999 through 2001; $3.150 billion for each FY 2002

through 2004; $4.050 billion for each FY 2005 through 2006 and $5

billion for FY 2007. However, under section 2104(c) of the Act, 0.25

percent of the total amount appropriated each year is available for

allotment to the Territories and Commonwealths of Puerto Rico, Guam,

the Virgin Islands, American Samoa, and the Northern Mariana Islands.

Furthermore, for FY 1999, an additional $32 million was appropriated

for allotment only to the Territories and Commonwealths under section

706 of the 1999 Appropriations Act, as enacted by section 101(f) of

Pub. L. 105-277. This newly appropriated $32 million for the

Commonwealths and Territories for FY 1999 does not reduce the previous

FY 1999 CHIP appropriation ($4.275 billion) and is in addition to 0.25

percent of the total annual appropriated discussed above. The total

amounts are allotted to the Commonwealths and the Territories according

to the following percentages: Puerto Rico, 91.6 percent; Guam, 3.5

percent; the Virgin Islands, 2.6 percent; American Samoa, 1.2 percent;

and the Northern Mariana Islands, 1.1 percent.

Further, under sections 4921 and 4922 of Public Law 105-33, the

total allotment available to the 50 States and the District of Columbia

is reduced by an additional total of $60,000,000; $30,000,000 each for

a special diabetes research program for Type I diabetes and special

diabetes programs for Indians. The diabetes programs are funded from

FYs 1998 through 2002 only.

Therefore, the total amount of the allotment available for the 50

States and the District of Columbia for FY 1998 and FY 1999 was

determined in accordance with the following formula:

ATA =

S2104(a)-T2104(c)-D4921-D4922

ATA = Total amount available for allotment to the 50 States

and the District of Columbia for the fiscal year.

S2104(a) = Total appropriation for the fiscal year indicated

in section 2104(a)of the Act. For FY 1998, this is $4,295,000,000. For

FY 1999, this is $4,275,000,000.

T2104(c) = Total amount available for allotment for the

Commonwealths and Territories; determined under section 2104(c) of the

Act as 0.25 percent of the total appropriation for the 50 States and

the District of Columbia.

For FY 1998, this is:

.0025 x $4,295,000,000 = $10,737,500

For FY 1999, this is:

.0025 x $4,275,000,000 = $10,687,500

D4921 = Amount of grant for research regarding Type I

Diabetes under section 4921 of Pub. L. 105-33. This is $30,000,000 for

FYs 1998 through 2002.

D4922 = Amount of grant for diabetes programs for Indians

under section 4922 of Pub. L. 105-33. This is $30,000,000 for FYs 1998

through 2002.

For FY 1998, the total amount available for allotment to the 50

States and the District of Columbia is $4,224,262,500. This was

determined as follows:

ATA($4,224,262,500) = S2104(a)($4,295,000,000)-

T2104(c)($10,737,500)-D4921 ($30,000,000)-

D4922($30,000,000)

For FY 1999, the total amount available for allotment to the 50

States and the District of Columbia is $4,204,312,500. This was

determined as follows:

ATA($4,204,312,500) = S2104(a)($4,275,000,000)-

T2104(c)($10,687,500)-D4921 ($30,000,000)-

D4922($30,000,000)

The total amount available for allotment to the 50 States and the

District of Columbia is allotted to each State with a child health plan

approved under title XXI based on the formula indicated at section

2104(b)(1) of the Act. The fiscal year allotment for each State with an

approved child health plan is determined on the basis of the product of

two factors, the Number of Children and the State Cost Factor, for each

State divided by the sum of these products over all States.

For FYs 1998 through 2000, the first factor, the Number of

Children, is based

[[Page 6104]]

only on the total number of low-income, uninsured children in the State

with FY 1999 being the only exception, as discussed above. For FY 2001

only, the Number of Children is calculated as the sum of 75 percent of

the low-income, uninsured children in the State, and 25 percent of the

number of low-income children in the State. For FY 2002 and succeeding

years through FY 2007, the Number of Children is calculated as the sum

of 50 percent of the low-income, uninsured children in the State, and

50 percent of the number of low-income in the State.

The Number of Children for each State is developed by the Bureau of

the Census based on the standard methodology used to determine official

poverty status and uninsured status in their annual CPS on these

topics. As part of a continuing formal process between HCFA and the

Bureau of the Census, each fiscal year HCFA obtains the Number of

Children data officially from the Bureau of the Census.

In determining the FY 1998 reserved allotments, as were originally

published in the Federal Register on September 12, 1997, the Number of

Children for each State (provided in thousands) was determined and

provided by the Bureau of the Census based on the arithmetic average of

the number of low-income children and low-income children with no

health insurance as calculated from the three most recent March

supplements to the CPS before the beginning of FY 1998. That is, we

used the most recent official data that were available from the Bureau

of the Census and Bureau of Labor Statistics, respectively, before

September 1, 1997 (that is, through August 31, 1997).

In particular, through August 31, 1997, the only official data

available from the Bureau of the Census on the numbers of children were

data from the 3 March CPSs conducted in March 1994, 1995, and 1996 that

reflected data for the 3 calendar years 1993, 1994, and 1995. In

calculating the FY 1998 reserved allotments, we did not use the Bureau

of the Census data from the March 1997 CPS because those data were not

official and available until a later date, after September 1, 1997. If

we waited for the official data available from the Bureau of the Census

through September 30, 1997, we would have had to delay publication of

the FY 1998 reserved CHIP allotments until after the beginning of FY

1998. Since this was a new program, we believed that for the first year

States needed to be able to plan in advance.

HCFA did not modify or adjust the Bureau of Census compilation of

CPS data on the number of children. However, HCFA is incorporating a

correction made by the Bureau of Census to more accurately reflect

underlying reported CPS data. The Bureau of Census recognized that the

data collected and reported on the numbers of children in the March

Supplements to the CPS were not accurately reflected in the compilation

provided to HCFA for the September 12, 1997, calculation of the FY 1998

reserved allotments. In particular, children who had access to services

through the Indian Health Service (IHS), but no other health insurance

coverage, were identified in the compiled number of children as having

health insurance coverage. The Bureau of Census has adjusted the

compiled numbers of children to reflect the fact that the data shows

that these children do not actually have health insurance coverage. In

light of this adjustment to more accurately reflect reported CPS data,

we have recalculated and are republishing in this notice the FY 1998

reserved allotments. This is consistent with the express incorporation

of this Bureau of Census adjustment into the fiscal year 1999 allotment

calculation under Public Law 105-277.

In accordance with section 707 of the 1999 Appropriations Act, as

enacted by section 101(f) of Pub. L. 105-277, the FY 1999 reserved

allotments are based on the same data as the revised FY 1998 reserved

allotments. Specifically, for FY 1999, the Number of Children for each

State (provided in thousands) was determined and provided by the Bureau

of the Census based on the arithmetic average of the number of low-

income children and low-income children with no health insurance as

calculated from the 1994, 1995, and 1996 March supplements to the CPS,

as adjusted in August 1998. Since the FY 1999 reserved allotments are

based on the same data as the revised FY 1998 reserved allotments, the

data reflect the updated method for accounting for individuals' access

to IHS facilities and services.

The second factor, the State Cost Factor, is based on annual

average wages in the health services industry in the State. The State

Cost Factor for a State is equal to the sum of: .15, and .85 multiplied

by the ratio of the annual average wages in the health industry per

employee for the State to the annual wages per employee in the health

industry for the 50 States and the District of Columbia. The State Cost

Factor for each State was calculated based on such wage data for each

State as reported, determined, and provided to HCFA by the Bureau of

Labor Statistics (BLS) in the Department of Labor. For the FY 1998

reserved allotments, we used the final State Cost Factor data for each

of the most recent 3 years before the beginning of the fiscal year,

through August 31, 1997 available from BLS. For the FY 1999 reserved

allotments, we used the same final State Cost Factor data available

from BLS for 1993, 1994, and 1995, as used in calculating the FY 1998

reserved allotments.

The average of wages per employee for the 50 States and the

District of Columbia was calculated by HCFA directly from the State-

specific data for each State provided by the BLS. This was necessary

because BLS suppressed certain State-specific data in providing HCFA

with the State-specific average wages per health services industry

employee. BLS is required to suppress such data under the Privacy Act.

The State Cost Factor is determined based on the calculation of the

ratio of each State's average annual wages in the health industry to

the National average annual wages in the health care industry. In order

for such National average to appropriately reflect the State-specific

suppressed data, HCFA calculated the National average wages directly

from the State-specific data provided by BLS. As part of a continuing

formal process between HCFA and the BLS, each fiscal year HCFA will

obtain these wage data officially from the BLS.

Under section 2104(b)(4) of the Act each of the 50 States and the

District of Columbia will receive a minimum allotment of $2 million.

Under this provision, to the extent any State's allotment is increased

to $2,000,000 from a lower amount that would otherwise have been

allotted to the State, the allotments to other States and the District

and Columbia must be reduced in a ``pro rata manner'' (but not below

$2,000,000) so that the total amount available for allotment to all

States does not exceed the amount previously available. For FY 1998 and

FY 1999, no State's reserved allotment is below $2,000,000; therefore,

no pro rata adjustment was necessary.

Following is an explanation of how HCFA applied the two State-

related factors specified in the statute to determine the States' child

health plan reserved allotments for FY 1998 and FY 1999. The formula

for determining each State's reserved allotment for FY 1998 and FY 1999

of the total available allotment is:

[GRAPHIC] [TIFF OMITTED] TN08FE99.001

SAi = Allotment for a State.

[[Page 6105]]

Ci = Number of Children. This is the number of certain low-

income children in a State as officially reported, defined, and

provided to HCFA by the Bureau of the Census. For FY 1998 and FY 1999,

this is the number of children under age 19 with no health insurance

whose family income is at or below 200 percent of the poverty line for

a family of the same size. (section 2104(b)(2)(B))

SCFi = The State cost factor for a State (section

2104(b)(1)(A)(ii)). This is equal to:

.15 + .85 x (Wi/WN) (section 2104(b)(3)(A)).

Wi = Certain annual average wages per health industry

employee for a State.

WN = Certain annual wages per health industry employee for

the 50 States and the District of Columbia.

The annual wages per employee for a State or for all States for a

fiscal year is equal to the average of such wages for employees in the

health industry, as reported by the Bureau of Labor Statistics of the

Department of Labor.

(Ci x SCFi) = The sum of the products

of Ci x SCFi for each State (section

2104(b)(1)(B)).

ATA = Total amount available for allotment to all

States for the fiscal year. For FY 1998, this is $4,224,262,500. For FY

1999, this is $4,204,312,500.

Section 2104(e) of the Act requires that the amount of a State's

allotment for a fiscal year be available to the State for a total of 3

years, the fiscal year for which the State child health plan is

approved and 2 years following. Section 2104(f) of the Act requires the

Secretary to establish a process for redistribution of the amounts of

States' allotments that are not expended during the 3-year period to

States that have fully expended their allotments. HCFA will soon issue

a proposed rule that will address the redistribution process and

propose to incorporate the process in Federal regulations.

In accordance with section 2104(b) and (c) of the Act, the total

allotment for all States for each fiscal year is available to the 50

States and District of Columbia, the Commonwealths, and the

Territories. Although the statute precludes the Secretary from making

an allotment to a specific State until it has an approved State child

health plan, because of the statutory provisions for redistribution of

unused amounts of allotments, the availability of allotments for 3

years, and the potential for retroactive effective dates of State child

health plans back to October 1, 1997, we believe it is necessary to

establish and publish these reserved allotment amounts for each fiscal

year so that States can plan appropriately for the operation of their

State children's health insurance programs under title XXI, effective

as early as October 1, 1997. No payments may be made from these

allotments until a State has an approved State child health plan under

title XXI.

In developing the reserved allotment amounts for FY 1998 and FY

1999, we applied the following principles, for which we will be

inviting public comment during the rulemaking process.

For each fiscal year for FYs 1998 through 2007, an

allotment amount will be reserved for all 50 States and the District of

Columbia and for the Commonwealths and Territories, regardless of

whether every State, Commonwealth, or Territory has submitted and the

Secretary has approved a State child health plan. This will provide

States with the flexibility and time to develop their programs and

submit their State child health plans.

The formula for ``reserving'' an allotment amount for each

State will be the same as the formula contained at section 2104(b) of

the Act (with the only qualification being for FY 1999, as discussed

above). The reserved amount is an estimate of the State's title XXI

allotment upon submission and approval of the State's child health

plan.

Under sections 2101(b)(2) and 2105(a) of the Act, no

payment of Federal funds from a State's allotment is available for

expenditures under a State's title XXI program unless the State has an

approved State child health plan. Therefore, States may be at risk for

expenditures made under a title XXI child health plan that is

submitted, but not yet approved.

Section 706 of the 1999 Appropriations Act, as enacted by section

101(f) of Pub. L. 105-277, provided for FY 1999 only, an additional $32

million available for allotment only to the Commonwealths and

Territories. Therefore, the total available allotment to the

Commonwealths and Territories in FY 1999 is $42,687,500 (that is,

$32,000,000 plus $10,687,500 (.25 percent of the FY 1999 appropriation

of $4,275,000,000)).

IV. Table of Reserved State Children's Health Insurance Program

Allotments for FY 1998 and FY 1999

Key to Tables I and II

------------------------------------------------------------------------

Column Description

------------------------------------------------------------------------

Column A = Name of State, Commonwealth, or Territory.

Column B = Number of Children. The Number of Children for

each State (provided in thousands) was

determined and provided by the Bureau of the

Census based on the arithmetic average of the

number of low-income children and low-income

children with no health insurance as

calculated from the 1994, 1995, and 1996 March

supplements to the Current Population Survey,

as adjusted in August 1998. These data

represent the number of people in each State

under 19 years of age whose family income is

at or below 200 percent of the poverty

threshold appropriate for that family, and who

are reported to be not covered by health

insurance. The Number of Children for each

State was developed by the Bureau of the

Census based on the standard methodology used

to determine official poverty status and

uninsured status in their annual Current

Population Surveys on these topics.

For FYs 1998 through 2000, the Number of

Children is equal to the number of low-income

children in each State with no health

insurance for the fiscal year. For FY 2001,

the Number of Children is equal to the sum of

75 percent of the number of low-income

children in the State with no health insurance

and 25 percent of the number of low-income

children in the State. This is also based on a

3-year average of Census data. For FY 2002 and

succeeding years, the Number of Children is

equal to the sum of 50 percent of the number

of low-income children in the State with no

health insurance and 50 percent of the number

of low-income children in the State. This is

also based on a 3-year average of Census data.

Column C = State Cost Factor. The State Cost Factor for a

State is equal to the sum of: .15, and .85

multiplied by the ratio of the annual average

wages in the health industry per employee for

the State to the annual wages per employee in

the health industry for the 50 States and the

District of Columbia. The State Cost Factor

for each State was calculated based on such

wage data for each State as reported,

determined, and provided to HCFA by the BLS in

the Department of Labor for 1993, 1994, and

1995.

[[Page 6106]]

Column D = Product. The Product for each State was

calculated by multiplying the Number of

Children in Column B by the State Cost Factor

in Column C. The sum of the Products for all

50 States and the District of Columbia is

below the Products for each State in Column D.

The Product for each State and the sum of the

Products for all States provides the basis for

allotment to States.

Column E = Percent Share of Total. This is the calculated

percentage share for each State of the total

allotment available to the 50 States and the

District of Columbia. The Percent Share of

Total is calculated as the ratio of the

Product for each State in Column D to the sum

of the products for all 50 States and the

District of Columbia below the Products for

each State in Column D.

Column F = Allotment. This is the State Child Health

Program allotment for each State,

Commonwealth, or Territory. For each of the 50

States and the District of Columbia, this is

determined as the Percent Share of Total in

Column E for the State multiplied by the total

amount available for allotment for the 50

States and the District of Columbia for the

fiscal year.

For each of the Commonwealths and Territories,

the allotment is determined as the Percent

Share of Total in Column E multiplied by the

total amount available for allotment to the

Commonwealths and Territories. For the

Commonwealths and Territories, the Percent

Share of Total in Column E is specified in

section 2104(c) of the Act. For FY 1999, the

Commonwealth and Territories were allotted an

additional $32 million, which is added to the

total allotment available to the territories

for FY 1999 determined by the formula

described above. The total amount is then

allotted to the Commonwealths and Territories

according to the percentages specified in

section 2104 of the Act.

------------------------------------------------------------------------

State Children's Health Insurance Program Reserved Allotments for Fiscal Year: 1998

----------------------------------------------------------------------------------------------------------------

Number of Percent

State children State cost Product share of Allotment \1\

(000) factor totals \3\

(A) (B) (C) (D) (E) (F)

----------------------------------------------------------------------------------------------------------------

ALABAMA.................................. 154 0.9510 146.46 2.04 $85,975,213

ALASKA................................... 11 1.0669 11.74 0.16 6,889,296

ARIZONA.................................. 190 1.0472 198.97 2.76 116,797,799

ARKANSAS................................. 92 0.8871 81.61 1.13 47,907,958

CALIFORNIA............................... 1,281 1.1365 1,455.92 20.23 854,644,807

COLORADO................................. 72 0.9888 71.19 0.99 41,790,547

CONNECTICUT.............................. 53 1,1237 59.55 0.83 34,959,075

DELAWARE................................. 13 1.0553 13.72 0.19 8,053,463

DISTRICT OF COLUMBIA..................... 16 1.2857 20.57 0.29 12,076,002

FLORIDA.................................. 444 1.0368 460.32 6.40 270,214,724

GEORGIA.................................. 214 0.9923 212.36 2.95 124,660,136

HAWAII................................... 13 1.1722 15.24 0.21 8,945,304

IDAHO.................................... 31 0.8726 27.05 0.38 15,879,707

ILLINOIS................................. 211 0.9892 208.73 2.90 122,528,573

INDIANA.................................. 131 0.9169 120.12 1.67 70,512,432

IOWA..................................... 67 0.8253 55.30 0.77 32,460,463

KANSAS................................... 60 0.8704 52.22 0.73 30,656,520

KENTUCKY................................. 93 0.9146 85.06 1.18 49,932,527

LOUISIANA................................ 194 0.8934 173.31 2.41 101,736,841

MAINE.................................... 24 0.8863 21.27 0.30 12,486,977

MARYLAND................................. 100 1.0498 104.98 1.46 61,627,358

MASSACHSETTS............................. 69 1.0576 72.97 1.01 42,836,231

MICHIGAN................................. 156 1.0001 156.02 2.17 91,585,508

MINNESOTA................................ 50 0.9675 48.37 0.67 28,395,980

MISSISSIPPI.............................. 110 0.8675 95.43 1.33 56,017,103

MISSOURI................................. 97 0.9075 88.03 1.22 51,673,123

MONTANA.................................. 24 0.8333 20.00 0.28 11,740,395

NEBRASKA................................. 30 0.8440 25.32 0.35 14,862,926

NEVADA................................... 43 1.2046 51.80 0.72 30,407,067

NEW HAMPSHIRE............................ 20 0.9760 19.52 0.27 11,458,404

NEW JERSEY............................... 134 1.1241 150.62 2.09 88,417,899

NEW MEXICO............................... 117 0.9169 107.28 1.49 62,972,705

NEW YORK................................. 399 1.0914 435.47 6.05 255,626,409

NORTH CAROLINA........................... 138 0.9815 135.45 1.88 79,508,462

NORTH DAKOTA............................. 10 0.8587 8.59 0.12 5,040,741

OHIO..................................... 205 0.9617 197.16 2.74 115,734,364

OKLAHOMA................................. 170 0.8588 145.99 2.03 85,699,061

OREGON................................... 67 0.9947 66.65 0.93 39,121,663

PENNSYLVANIA............................. 200 1.0005 200.9 2.78 117,456,521

RHODE ISLAND............................. 19 0.9580 18.20 0.25 10,684,422

SOUTH CAROLINA........................... 110 0.9843 108.27 1.50 63,557,819

SOUTH DAKOTA............................. 17 0.8559 14.55 0.20 8,541,224

TENNESSEE................................ 115 0.9799 112.69 1.57 66,153,082

TEXAS.................................... 1,031 0.9275 956.25 13.29 561,331,521

[[Page 6107]]

UTAH..................................... 46 0.8977 41.30 0.57 24,241,159

VERMONT.................................. 7 0.8604 6.02 0.08 3,535,445

VIRGINIA................................. 118 0.9862 116.38 1.62 68,314,915

WASHINGTON............................... 85 0.9352 79.49 1.10 46,661,213

WEST VIRGINIA............................ 45 0.8937 40.21 0.56 23,606,744

WISCONSIN................................ 75 0.9229 69.22 0.96 40,633,039

WYOMING.................................. 15 0.9858 13.14 0.18 7,711,638

----------------------------------------------------------------------------------------------------------------

TOTAL STATES ONLY.................... ........... ........... 7,196.17 100.00 4,224,262,500

----------------------------------------------------------------------------------------------------------------

ALLOTMENTS FOR COMMONWEALTHS AND

TERRITORIES \2\

PUERTO RICO.............................. ........... ........... ........... 91.60 9,835,550

GUAM..................................... ........... ........... ........... 3.50 375,813

VIRGIN ISLANDS........................... ........... ........... ........... 2.60 279,175

AMERICA SAMOA............................ ........... ........... ........... 1.20 128,850

N. MARIANA ISLANDS....................... ........... ........... ........... 1.10 118.113

----------------------------------------------------------------------------------------------------------------

TOTAL COMMONWEALTHS AND TERRITORIES

ONLY................................ ........... ........... ........... 100.00 10,737,500

----------------------------------------------------------------------------------------------------------------

TOTAL STATES AND COMMONWEALTH AND

TERRITORIES......................... ........... ........... ........... ........... 4,235,000,000

----------------------------------------------------------------------------------------------------------------

Footnotes:

(1) Total amount available for allotment to the 50 States and the District of Columbia is $4,224,262,500;

determined as the fiscal year appropriation ($4,295,000,000) reduced by the total amount available for

allotment to the Commonwealths and Territories ($10,737,500) and amounts for Special Diabetes Grants

($60,000,000) under sections 4921 and 4922 of BBA.

(2) Total amount available for allotment to the Commonwealths and Territories is $10,737,500; determined as .25

percent of the fiscal year appropriation ($4,295,000,000).

(3) Percent share of total amount for allotment to the Commonwealths and Territories is as specified in section

2104(c) of the Social Security Act.

State Children's Health Insurance Program Reserved Allotments for Fiscal Year: 1999

----------------------------------------------------------------------------------------------------------------

Number of Percent

State children State cost Product share of Allotment \1\

(000) factor total \3\

(A) (B) (C) (D) (E) (F)

----------------------------------------------------------------------------------------------------------------

ALABAMA.................................. 154 0.9510 146.46 2.04 $85,569,176

ALASKA................................... 11 1.0669 11.74 0.16 6,856,760

ARIZONA.................................. 190 1.0472 198.97 2.76 116,246,196

ARKANSAS................................. 92 0.8871 81.61 1.13 47,681,702

CALIFORNIA............................... 1,281 1.1365 1,455.92 20.23 850,608,561

COLORADO................................. 72 0.9888 71.19 0.99 41,593,182

CONNECTICUT.............................. 53 1.1237 59.55 0.83 34,793,973

DELAWARE................................. 13 1.0553 13.72 0.19 8,015,429

DISTRICT OF COLUMBIA..................... 16 1.2857 20.57 0.29 12,018,971

FLORIDA.................................. 444 1.0368 460.32 6.40 268,938,576

GEORGIA.................................. 214 0.9923 212.36 2.95 124,071,402

HAWAII................................... 13 1.1722 15.24 0.21 8,903,057

IDAHO.................................... 31 0.8726 27.05 0.38 15,804,712

ILLINOIS................................. 211 0.9892 208.73 2.90 121,949,905

INDIANA.................................. 131 0.9169 120.12 1.67 70,179,422

IOWA..................................... 67 0.8253 55.30 0.77 32,307,161

KANSAS................................... 60 0.8704 52.22 0.73 30,511,738

KENTUCKY................................. 93 0.9146 85.06 1.18 49,696,709

LOUISIANA................................ 194 0.8934 173.31 2.41 101,256,366

MAINE.................................... 24 0.8863 21.27 0.30 12,428,004

MARYLAND................................. 100 1.0498 104.98 1.46 61,363,309

MASSACHUSETTS............................ 69 1.0576 72.97 1.01 42,633,928

MICHIGAN................................. 156 1.0001 156.02 2.17 91,152,976

MINNESOTA................................ 50 0.9675 48.37 0.67 28,261,873

MISSISSIPPI.............................. 110 0.8675 95.43 1.33 55,752,550

MISSOURI................................. 97 0.9075 88.03 1.22 51,429,086

MONTANA.................................. 24 0.8333 20.00 0.28 11,684,948

NEBRASKA................................. 30 0.8440 25.32 0.35 14,792,733

NEVADA................................... 43 1.2046 51.80 0.72 30,263,463

NEW HAMPSHIRE............................ 20 0.9760 19.52 0.27 11,404,289

NEW JERSEY............................... 134 1.1241 150.62 2.09 88,000,326

[[Page 6108]]

NEW MEXICO............................... 117 0.9169 107.28 1.49 62,675,303

NEW YORK................................. 399 1.0914 435.47 6.05 254,419,158

NORTH CAROLINA........................... 138 0.9815 135.45 1.88 79,132,966

NORTH DAKOTA............................. 10 0.8587 8.59 0.12 5,016,935

OHIO..................................... 205 0.9617 197.16 2.74 115,187,783

OKLAHOMA................................. 170 0.8588 145.99 2.03 85,294,328

OREGON................................... 67 0.9947 66.65 0.93 38,936,902

PENNSYLVANIA............................. 200 1.0005 200.09 2.78 116,901,807

RHODE ISLAND............................. 19 0.9580 18.20 0.25 10,633,962

SOUTH CAROLINA........................... 110 0.9843 108.27 1.50 63,257,653

SOUTH DAKOTA............................. 17 0.8559 14.55 0.20 8,500,886

TENNESSEE................................ 115 0.9799 112.69 1.57 65,840,660

TEXAS.................................... 1,031 0.9275 956.25 13.29 558,680,510

UTAH..................................... 46 0.8977 41.30 0.57 24,126,675

VERMONT.................................. 7 0.8604 6.02 0.08 3,518,748

VIRGINIA................................. 118 0.9862 116.38 1.62 67,992,282

WASHINGTON............................... 85 0.9352 79.49 1.10 46,440,845

WEST VIRGINIA............................ 45 0.8937 40.21 0.56 23,495,256

WISCONSIN................................ 75 0.9229 69.22 0.96 40,441,141

WYOMING.................................. 15 0.8758 13.14 0.18 7,675,218

----------------------------------------------------------------------

TOTAL STATES ONLY.................... ........... ........... 7,196.17 100.00 4,204,312,500

----------------------------------------------------------------------

ALLOTMENTS FOR COMMONWEALTHS AND

TERRITORIES:\2\

PUERTO RICO.......................... ........... ........... ........... 91.60 39,101,750

GUAM................................. ........... ........... ........... 3.50 1,494,063

VIRGIN ISLANDS....................... ........... ........... ........... 2.60 1,109,875

AMERICAN SAMOA....................... ........... ........... ........... 1.20 512,250

N. MARIANA ISLANDS................... ........... ........... ........... 1.10 469,563

----------------------------------------------------------------------

TOTAL COMMONWEALTHS AND TERRITORIES ONLY. ........... ........... ........... 100.00 42,687,500

----------------------------------------------------------------------

TOTAL STATES AND COMMONWEALTH AND

TERRITORIES............................. ........... ........... ........... ........... 4,247,000,000

----------------------------------------------------------------------------------------------------------------

Footnotes:

(1) Total amount available for allotment to the 50 States and the District of Columbia is $4,204,312,500;

determined as the fiscal year appropriation ($4,275,000,000) reduced by the total amount available for

allotment to the Commonwealths and Territories ($10,687,500) and amounts for Special Diabetes Grants

($60,000,000) under sections 4921 and 4922 of BBA.

(2) Total amount available for allotment to the Commonwealths and Territories is $42,687,500; determined as

$10,687,500 (.25 percent of $4,275,000,000, the fiscal year appropriation) plus $32,000,000.

(3) Percent share of total amount available for allotment to the Commonwealths and Territories is as specified

in section 2104(c) of the Social Security Act.

V. Impact Statement

HCFA has examined the impact of this notice as required by

Executive Order 12866. Executive Order 12866 directs agencies to assess

all costs and benefits of available regulatory alternatives and, when

rules are necessary, to select regulatory approaches that maximize net

benefits (including potential economic environments, public health and

safety, other advantages, distributive impacts, and equity). We believe

that this notice is consistent with the regulatory philosophy and

principles identified in the Executive Order.

This notice merely provides notification of the reserved FY 1998

and FY 1999 State CHIP allotments available to provide Federal funding

to individual States, Commonwealths, and Territories for expenditures

in the new Children's Health Insurance Program and the assumption and

methodology that HCFA used to determine these reserved allotments. The

formula for State allotments is specified in the statute. This notice

by itself has no economic impact. Final State CHIP allotments for each

State will be calculated using the statutory formula and may vary from

these reserved amounts depending upon the number of States that submit

approved State plans under title XXI. (As noted above, the allotment

process will be set forth in more detail in future rulemaking.)

We believe this notice will have an overall positive impact by

informing States of the extent to which they will be permitted to

expend funds under approved State child health plans in FY 1998 and FY

1999. States will be able to conduct advance planning necessary for

implementation of the State Child Health Insurance Program if they

choose, beginning October 1, 1997.

In accordance with the provisions of Executive Order 12866, this

notice was reviewed by the Office of Management and Budget.

(Section 1102 of the Social Security Act (42 U.S.C. 1302)

(Catalog of Federal Domestic Assistance Program No. 00.000, State

Children's Health Insurance Program)

Dated: December 18, 1998.

Nancy Ann Min DeParle,

Administrator, Health Care Financing Administration.

Dated: January 5, 1999.

Donna E. Shalala,

Secretary.

[FR Doc. 99-2859 Filed 2-5-99; 8:45 am]

BILLING CODE 4120-01-P