Originally published in Issue 17 - December 14, 1997
The Balanced Budget Act of 1997 enacted by Congress this past summer includes significant funding for states to increase health insurance coverage of uninsured low-income children. The act authorizes $40 billion over the next ten years to states with federally approved child health plans.
The block grant program, known as the State Children's Health Insurance Program (S-CHIP), allows states tremendous flexibility in creating their plans, permitting them to use their grants to expand coverage under their current Medicaid programs, buy policies from private insurers, create new child health programs, or develop combinations of these approaches. The General Accounting Office estimates that New York State will receive $266 million each federal fiscal year between 1998 and 2000 under S-CHIP.
Rather than expand Medicaid, New York State recently submitted its plan to invest the new federal aid into expanding its own program, Child Health Plus (CHP). Established for Medicaid-ineligible children in 1990, CHP works with private insurers to fully subsidize comprehensive primary, preventive and inpatient care for children up to 18 years old in families earning less than 120 percent of the federal poverty level (FPL). It also partially subsidizes families above this level. Those with incomes between 120 percent and 160 percent of the FPL pay $9 per child per month up to a monthly maximum of $36. Those earning between 160 percent and 222 percent of the FPL pay $13 per child per month up to $52 per month. Child Health Plus, a managed care program funded through the state's Bad Debt and Charity Care pool, presently reaches over 160,000 children.
In its plan to the Health Care Financing Administration (HCFA), New York proposed several changes to Child Health Plus. The new plan, which requires approval by the state legislature, would provide free insurance to children in families with incomes up to 160 percent of the FPL, benefitting 420,000 children by 1999. Families with incomes 160 percent to 222 percent of the FPL would pay $9 per child per month up to a maximum monthly premium of $36.
Expanding CHP offers many advantages but it also has drawbacks. The block grant under S-CHIP limits federal aid to Medicaid-ineligible children. As families' incomes change, shifting enrollment between Medicaid and CHP could affect their choice of providers, access to benefits, and continuity of insurance coverage. Finally, Medicaid covers services such as eye and routine dental care whereas CHP does not.
Nevertheless, S-CHIP is a potential boon to New York City's uninsured children. Approximately 14 percent of the city's children are uninsured compared to 6 percent in the rest of the state. The city's Public Advocate estimates that 60 percent of the state's Medicaid recipients and Child Health Plus enrollees reside within the five boroughs. City Councilmember Annette Robinson has recently introduced Resolution No. 2683 in support of the new law.