Due to an inadequacy of federal funding, the health coverage of approximately 312 local children enrolled in PeachCare may be terminated sometime next month. A statewide freeze on enrollment in the program becomes effective March 11.

The PeachCare program was established in 1997 when the U.S. Congress passed legislation creating the State Children's Health Insurance Program (SCHIP) and appropriated $40 billion in federal funds over the following 10 years. Dollars are allotted annually to states based on a formula dependent upon the number of uninsured children in the state. States that do not use their allotments are able to retain unused funds for three years. State allotments that remain unused after three years revert to the federal government for redistribution to states that spend their entire annual allotment.

Georgia's PeachCare program is facing a federal shortfall of $131 million, an estimated amount that is needed to continue the program until the beginning of the next federal fiscal year that starts in October. Currently, the federal government provides 73 percent of the benefit cost, less premiums, with the state providing the remaining 27 percent.

The program is administered through the U.S. Department of Health and Human Services and statewide by the Georgia Department of Community Health (DCH).

In remarks to The Millen News, DCH Director Rebecca Kellenberg said that working with Congressional leaders to provide federal funds was her department's biggest goal.

"If that can't be done, we are facing some very difficult decisions about how to continue," Kellenberg said.

Since current Georgia statute does not allow the operation of the PeachCare program without federal participation, the DCH could be forced to terminate coverage for approximately 270,000 children statewide as early as next month. Should that occur, Kellenberg said that participants in the program would receive 30-day advance notice of the action. She also stressed the importance of participants paying their PeachCare premiums on a timely basis during the freeze on enrollment.

"Failure to do so could place them at risk of being kicked out of the program and not being able to reinstate," she said.

Kellenberg cites several factors as contributors to the current crisis.

"The reimbursement formula penalizes us. If Georgia has a decline in the rate of uninsured children, because our program has been so successful, it adversely affects funding," she said.

The fact that the federal government chose not to redistribute unused funds in other states to states facing shortfalls did not help the situation, she added.

Georgia is one of 14 states facing shortfalls in the PeachCare program. The state ranks fifth in the nation in numbers of children enrolled in PeachCare. Only California, New York, Florida and Texas have higher enrollments.