The Children's Health Insurance Program is already a leading issue in the yet-to-be-declared 2006 gubernatorial race.

U.S. Sen. Kay Bailey Hutchison, widely thought to be considering a challenge to Gov. Rick Perry, in January used the redistribution of nearly $105 million in federal CHIP money "forfeited" to other states as an opportunity to criticize the state — and, thus, its leader — for losing the money.

Since 2000, the state has "returned" $808.1 million in unspent CHIP money, according to the Health and Human Services Commission.

That Texas didn't use all of its federal money isn't in dispute. But the possible reasons for that have become a political hot button.

Congress created the State Children's Health Insurance Program in 1997 to help states insure children whose parents couldn't afford private coverage. In Texas the program is separate from Medicaid, which uses both federal and state money to provide health insurance for some of the state's poorest people.

Congress earmarked $40 billion, to be distributed over a decade, for state CHIP programs. But states can't use the money without pitching in some of their own. For every dollar Texas spends on the program this year, it gets $2.69 in federal money.

Money first became available in October 1997, but Texas didn't yet have a program in place. That's because the Legislature wasn't in session and, despite pressure to do so, then-Gov. George W. Bush declined to call a special session to address the issue. The Texas program was created in 1999. By then, the federal government had set aside about $1.1 billion for the state.

Texas officials have three years to spend each year's pot of money, or else it is sent to states that have exhausted their federal money.

Robert Black, a Perry spokesman, said that, when the program started in Texas, state officials began using the money that became available in October 1997.

"Texas has always tried to spend its oldest money first and take the new money that we receive every year and save it for use in future years," Black said.

"But the bottom line is, even at the height of its enrollment, when there were very few barriers for anyone entering the CHIP program, Texas did not spend all the money it had accumulated over the years."

In 2002, when529,211 children were enrolled at one point, the state spent $535.7 million of the $1.5 billion in available federal money, according to the Health and Human Services Commission.

Black said that Hutchison could have asked Congress to extend the amount of time states can keep their federal money to prevent Texas from having to give up the money. Hutchison did not respond to a request for comment.

State leaders also have been criticized for dropping CHIP's dental and vision benefits during the 2003 legislative session, when lawmakers had to contend with a $10 billion budget deficit. Those benefits are on track to be restored this session.

Some Democrats attribute the defeat of two key Republican House members in the November election to their role in making the cuts.

Talmadge Heflin, from Houston, and Arlene Wohlgemuth, from Burleson, lost their races in November. Heflin, who was chairman of the powerful budget-writing Appropriations Committee and a 22-year veteran of the House, is challenging his loss to Hubert Vo, D-Houston.

Wohlgemuth, who spearheaded the CHIP changes, lost her congressional race to incumbent Chet Edwards, D-Waco, in a district redrawn to favor a Republican.

Rep. Garnet Coleman, D-Houston, said the CHIP issue isn't going away. Coleman, among the most vocal lawmakers on the issue, has suggested that the state insure more children under CHIP by using the surplus federal money over the next six years.

"As long as the leadership in this state decides that that's not the public policy that they want to pursue, then it will be a political issue," he said.

How much Texas has returned, in millions

Year Federal money allotted Amount spent Amount returned* State money**
1998 $561.3 $1.3 0 0
1999 $558.9 $38.5 0 0
2000 $502.8 $41.4 $170 from 1998 $7
2001 $452.5 $264 $324.5 from 1999 $120.9
2002 $301.8 $535.7 $123.7 from 2000 $192
2003 $311.5 $405.6 $85.3 from 2001 $222.4
2004 $330.9 $282.5 $104.6 from 2002 $195.7

* Amount lost could include money from more than one year; majority was lost from year indicated

**General revenue figure includes money for which the state did not receive a federal match

Source: Health and Human Services Commission