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Congress enacted the Children’s Health Insurance Program (CHIP) in 1997 with strong bipartisan support. CHIP is not an entitlement program; rather, Congress established funding as a block grant to states. The federal legislation authorizing CHIP expires in 2007. For the program to continue, Congress must reauthorize it.
Nationally, CHIP provides coverage for about 6 million children. As of February, 325, 479 Texas children were enrolled, down from a peak of 529, 211 in 2002.
CHIP represents the best of “public/private” partnerships that provide affordable health insurance to children of working parents. States set up their CHIP programs within federal guidelines but contract with private health plans to administer it. Funding comes from state and federal funds. Additionally, in Texas, families also must share in the costs of their children’s care.
Twenty percent of Texas children (approximately 1.4 million) are uninsured. Of these, about half are estimated to be eligible for CHIP or Medicaid. Uninsured children are less likely to receive the preventive and primary care they need to be healthy and productive. They also are less likely to receive care for injuries or chronic illnesses.
The original CHIP block grant formula does not account for growth in the children’s population or medical inflation.
Medicine’s 2009 Agenda
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For Texas and other states to continue progress toward reducing the number of uninsured children, Congress must reauthorize CHIP.
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Congress should maintain coverage for children who are currently enrolled in CHIP. The CHIP block grant does not account for natural increases in the child population or growth in medical costs over time. If the formula is not amended to address these costs, states will not be able to maintain coverage for children already enrolled.
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Additionally, Congress should expand coverage to children who are eligible but not enrolled. Nationally, most states have adopted or are considering ways to expand coverage for children. To sustain these efforts, states will need a reliable source of federal CHIP funds.
Medicine’s Message
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At a minimum, Congress should enact the proposed bipartisan compromise $35 billion, five-year reauthorization of CHIP.
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Opportunities should be pursued to allow states, under certain conditions, to use SCHIP funds to enroll SCHIP beneficiaries in employer-sponsored insurance plans.
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Congress may be tempted to cut funding for Texas due to enrollment declines and lapsed funding. However, the Texas Legislature has reversed course. It recently enacted House Bill 109, which will streamline enrollment, including reinstating 12 months’ continuous coverage for most enrollees. As a result of HB 109, more than 127,000 low-income children are expected to gain health insurance.
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Texas also recently expanded CHIP to cover “perinates” who otherwise would not receive prenatal care. If Congress does not allocate sufficient funds to maintain and expand CHIP, Texas’ efforts to do the right thing will be for naught.
2009 Federal Legislative Issue Briefs
U.S. Congressional main page
Last Published: 3/10/2009 Print this page
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