CHIP reauthorization increasing extent of kids' coverage

by Lesley Politi on April 15, 2009

CHIP reauthorization increasing extent of kids’ coverage

About a dozen states are implementing or considering CHIP eligibility expansions.

By Doug Trapp, AMNews staff. Posted April 13, 2009.

States began expanding health coverage for children even before the recently enacted Children’s Health Insurance Program reauthorization took effect on April 1.

The CHIP reauthorization, signed into law in February by President Obama, funds the federal/state program through September 2013 and is expected to expand coverage by 4 million to reach 11 million children by that year. The act pays for the $33 billion of additional funding almost entirely by increasing the federal tobacco tax

The CHIP act will help fill three big gaps in the U.S. health system: Primary, dental and mental health care, said Ted Epperly, MD, president of the American Academy of Family Physicians. The act requires states to add dental services to CHIP plans and to offer mental health and substance abuse coverage equal to the state’s medical and surgical benefits. The reauthorization also allows some states to offer separate dental coverage to CHIP-eligible kids.

“They’re really going after the big three, where there’s just a tremendous need. I can’t applaud the administration enough,” Dr. Epperly said. The reauthorization also provides stability to patient care, he said, following many months of uncertainty about the program’s future.

CHIP has allowed about a dozen states to expand eligibility or consider doing so, said Jennifer Tolbert, principal policy analyst with the Kaiser Commission on Medicaid and the Uninsured. “Given the current economic situation, it’s a pretty significant number,” she said. The act lets states receive enhanced federal matching funds to cover children in families earning up to 300% of the federal poverty level. The federal government pays for at least 65% of CHIP spending.

Several states had adopted CHIP expansions while President Bush was in office. But they were handcuffed by a Centers for Medicare & Medicaid Services directive effective Aug. 17, 2008, that limited enhanced federal CHIP funding for children in families earning 250% of poverty or more. CMS never officially enforced that directive, and Obama rescinded it in February.

The Oklahoma Legislature, for example, in 2007 expanded the state’s CHIP eligibility from 185% of poverty to 300% of poverty, said Jo Kilgore, spokeswoman for the Oklahoma Health Care Authority, the state’s Medicaid agency. But the state never implemented the law because of the CMS directive.

The state recently sent a request to CMS to verify that it would receive the federal matching funding necessary to carry out the CHIP expansion, which is expected to cover 40,000 more children, Kilgore said. Other states whose expansions were hampered by the directive — such as Ohio, Louisiana and Washington — are considering or have made similar moves recently, Tolbert said.

Fewer adults allowed

The CHIP reauthorization also changes the program by ending coverage for childless adults by the end of this year. In recent years, the program had covered 600,000 such adults.

But the act allows a state to use CHIP to cover pregnant women if the state’s Medicaid program covers lower-income women and if it meets other criteria. Dr. Epperly said pregnant women who are abusing drugs sometimes show up as patients in his Boise, Idaho, practice. He said this provision should help get these women care that will prevent health problems for them and their children.

CHIP also allows states to help low-income parents buy employer-sponsored health insurance, which should remove some of the financial pressures CHIP might place on states, said American Medical Association President Nancy H. Nielsen, MD, PhD. Dr. Epperly said his practice is looking into this assistance option for some of its 145 employees. “I’d as soon keep them in our [health] plan than have them get off our plan and go to CHIP,” he said.

CHIP enrollment also will be helped by other provisions, including $100 million in federal funding for states to conduct outreach to children who are eligible for CHIP but not yet signed up. And instead of states running deficits when they exceed enrollment goals, the reauthorization provides $3.2 billion for bonus payments to states that beat their goals if the state also adopts at least five measures to facilitate enrollment. These include ending in-person enrollment interviews, providing help with buying private insurance, and reducing asset tests or documentation requirements.

Stimulus a key

The $87 billion Medicaid funding in the recently enacted stimulus package is helping to mend a fraying health safety net, according to Ann Kohler, director of the National Assn. of State Medicaid Directors. “Many states were forced to have some pretty dramatic cuts in eligibility that they now will not implement because of the stimulus act.”

That’s in part because the stimulus requires states receiving extra funds to maintain or restore Medicaid eligibility to July 1, 2008, levels. California Gov. Arnold Schwarzenegger on March 30 signed a bill reducing the state’s Medicaid re-enrollment requirement from twice a year to annually. This will allow California to receive at least $8 billion in temporary Medicaid funding increases.

Ken King, the Oklahoma State Medical Assn.’s executive director, said he believes his state, which is facing a $900 million budget deficit next year, would have trimmed all of its state agencies without the stimulus funding. The deficit represents about 12% of the projected fiscal 2010 budget of almost $7 billion, according to state estimates from February. But Kilgore said health care programs do not now appear to be on the chopping block.

Kohler said CMS needs to give more details on how many of the provisions in the stimulus act and CHIP reauthorization will work, such as the CHIP dental coverage.


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