CHILDREN S ADVOCATE GUIDE: PARENT COVERAGE THROUGH CHIP KEY ISSUES
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1 CHILDREN S ADVOCATE GUIDE: PARENT COVERAGE THROUGH CHIP KEY ISSUES Children s Defense Fund
2 CHILDREN S ADVOCATE GUIDE: PARENT COVERAGE THROUGH CHIP KEY ISSUES More than 42 million people in America, including nearly 11 million children, lack health insurance a national crisis crying out for action. In recent years, Congress has created specific opportunities for states to insure large numbers of uninsured children as well as their parents. A significant portion of the uninsured could be covered if states would seize the funding available through several federal programs. In 1997, Congress passed the Children s Health Insurance Program (CHIP), which insures uninsured children who are not eligible for Medicaid. States may also use CHIP funds to purchase family coverage through an employer if the coverage does not exceed the cost of covering the children. If states opt for employer-based family coverage with CHIP funds, states must ensure that employers do not drop coverage or contributions to coverage. In 1996, Congress passed Section 1931 Medicaid Eligibility to insure uninsured adults by allowing states to adopt eligibility standards for Medicaid higher than state eligibility levels for public cash assistance. For many years states have been able to expand their Medicaid programs to cover large numbers of children and adults (regardless of whether they have children) through so-called Section 1115 waivers, which allow states to raise income eligibility levels for Medicaid. Three states,wisconsin, Rhode Island, and New Jersey, have been granted Section 1115 waivers to cover uninsured parents of CHIP-eligible children through CHIP with CHIP funds. Several more states are planning to request such waivers. The Health Care Financing Administration (HCFA) will approve waivers only if income eligibility for CHIP is at least 200 percent of the federal poverty level (FPL) and at least three of the following five policies are in place for CHIP and Medicaid: Assets test are not a part of the application Joint mail-in application for CHIP and Medicaid 12-months of continuous eligibility upon enrollment Coverage renewal/eligibility re-determination by mail and ability to move coverage from one program to the other without a new application Implementation of presumptive eligibility (allows a qualified health provider or agency to grant short-term Medicaid or CHIP eligibility to a child, enabling that child to receive immediate health services while a formal application is processed later) States are seeking ways to provide health coverage to more uninsured children, parents, and adults without children. Child advocates have tremendous opportunities to make sure that states do everything possible to cover and enroll as many children as possible through CHIP and Medicaid programs. Child advocates will also need to make sure that CHIP s priority is covering uninsured children, as Congress intended when it created CHIP. As your state discusses coverage expansions, particularly expanded use of CHIP funds since many states have failed to exhaust all of their federal allotments, many important points should be considered. 2
3 In federal fiscal year 2000, 3.3 million children were enrolled in the CHIP program. Despite the slow pace of enrollment and the accumulation of unused CHIP allotments during the first years of the program, recent increases in enrollment indicate that states are making significant progress in enrolling eligible children and, therefore, spending significant portions of their allotments. Still, with more than 6 million uninsured children eligible for CHIP or Medicaid, states need to be more aggressive in reaching and enrolling eligible children in these programs. As a strategy to enroll more children, several states are contemplating coverage of uninsured parents of CHIP-eligible children. While this approach may help achieve CHIP s purpose to insure children, several points must be considered: Parent s coverage through CHIP with CHIP funds must be monitored to ensure that covering parents results in the additional enrollment of children. Advocates should have a firm number of children enrolled in CHIP at the point of expansion to parents. Children s enrollment should be tracked after the parent expansion begins to determine whether the strategy brings in new children or primarily serves as a coverage mechanism for the parents of children who are already enrolled. As states have engaged in CHIP outreach, in addition to enrolling more children in CHIP they have found and enrolled significant numbers of uninsured children who should have been enrolled in Medicaid. The remaining children who are eligible but not enrolled will represent a hard-to-reach focus for outreach efforts. Using and potentially exhausting CHIP funds through parent coverage strategies must not displace sustained outreach efforts to enroll hard-to-reach uninsured children in CHIP and Medicaid. This point is particularly critical as states contemplate increases in Medicaid costs that are largely attributable to increases in costs of prescription drugs and long-term care for adult Medicaid enrollees. States that are considering coverage of parents through CHIP may be concerned with fully exhausting their federal funding if their outreach and enrollment is overly successful. In order to prevent the need to pay the full cost of coverage once federal funds are exhausted, some are suggesting a rollback of income eligibility levels as a safety valve. Since CHIP is intended as an insurance program for uninsured children, any eligibility rollback provision should exempt children so that children s eligibility and enrollment is sustained as the priority of the program. There is strong evidence that coverage for adults is more expensive than for children and this disparity in the costs must be factored into any discussion of budgeting for coverage. Additional questions to ask to encourage states to reach more uninsured children are: 1. Has your state adopted the highest income eligibility level possible to cover uninsured children through CHIP? Eleven states still have CHIP eligibility below 200 percent of FPL. While 27 states have eligibility at 200 percent of FPL, they could expand coverage further by going above 200 percent of FPL as 13 states have done. Obviously, the higher the income eligibility a state sets, the larger the number of uninsured children in the state who will be eligible for coverage with CHIP funds. 2. Has your state adopted all of the simplification measures for CHIP and Medicaid to make it as easy as possible for families to enroll their children? Five states still do not use joint applications for CHIP and Medicaid Seven states require face-to-face interviews for Medicaid applications but allow mailin applications for CHIP 3
4 Six states have assets tests for Medicaid but not for CHIP 12 states do not provide 12 months of continuous coverage beginning at enrollment 18 states have not evened out Medicaid eligibility for children of all ages, meaning that families may have to fill out applications for different programs for each of their children depending on how old the child is (i.e., a family with income at 140 percent of poverty may have to fill out a Medicaid application for a 2-year-old if a state covers 2-year-old children to 150 percent of poverty, but have to fill out a CHIP application for a 7-year-old if the state sets maximum Medicaid eligibility for a child that age at 133 percent of poverty). 4. Has your state adopted a comprehensive benefits package for children in the CHIP program? In states with CHIP benefits that are less comprehensive than those under Medicaid, children s advocates should press to fill the gaps in benefits to ensure that children get the health care they need. 5. Has your state shortened or eliminated waiting periods so children do not have gaps in coverage when transitioning to CHIP after losing private coverage? In some cases states have shortened or eliminated waiting periods that were keeping uninsured children out of the program. Coverage of uninsured adults, particularly parents, is certainly an important step to take in reducing the number of uninsured. The following are effective and popular state strategies that have maximized coverage through the use of substantial federal contributions. As mentioned above, several states have used the Section 1931 Medicaid Eligibility expansion to adopt significantly higher eligibility levels for parents. The following jurisdictions have adopted Section 1931 expansions: California (100 percent FPL), Connecticut (150 percent FPL), District of Columbia (200 percent FPL), Maine (150 percent FPL), New Jersey (200 percent FPL), Ohio (100 percent FPL), and Rhode Island (185 percent FPL). This is a particularly important expansion strategy because it covers lower income uninsured parents who are most likely to lack insurance coverage through their employers. Another Medicaid expansion strategy has been the coverage of parents through Section 1115 Medicaid waivers. Delaware (100 percent FPL), Hawaii (100 percent FPL), Massachusetts (133 percent FPL), Minnesota (275 percent FPL), Missouri (100 percent FPL), New York (150 percent FPL), Oregon (100 percent FPL), Tennessee (400 percent FPL), Vermont (150 percent FPL), Wisconsin (185 percentfpl), and Washington (200 percent FPL) have all adopted this strategy. Section 1115 Medicaid waivers have also been used to cover many uninsured adults without children. Delaware (100 percent FPL), Hawaii (100 percent FPL), Massachusetts (133 percent FPL), Minnesota (175 percent FPL), New York (100 percent FPL), Oregon (100 percent FPL), Tennessee (cost-sharing for those above 100 percent FPL), and Vermont (150 percent FPL). Numerous strategies and significant federal financing are available for substantial expansions to insure more of the uninsured. More can and should be done to make as many uninsured children eligible and to get them enrolled in CHIP and Medicaid. States can also do more to simplify the programs; to make enrolling in and maintaining coverage easy and family friendly; to reach out aggressively to eligible children, including those who are hardest to reach; and to make sure that insuring children remains the priority of the CHIP program as Congress intended. 4
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