Steady growth in uninsured children spurs states to expand subsidized programs
Uninsured Children / Subsidized
November 30, 1996
Plans by Massachusetts and New York to double the size of their subsidized children’s health insurance programs for low-income working families signal that this is one health-care issue that has the potential to generate strong bi-partisan support.
Even on this issue, however, there is often heated debate over the best financing
mechanism.
Massachusetts lawmakers in July overrode Gov. William Weld’s veto of legislation that will double the size of the existing program, called the Children’s Medical Security Plan (CMSP), and open up coverage to an estimated additional 40,000 to 50,000 children with the aid of a 25 cent increase in the cigarette tax. In 1994, the program covered 22,000 children with a budget of $12 million. Gov. Weld said he supports the program, but wanted a different funding mechanism.
The state of New York plans to more than double the size of its program in five years, from covering 104,000 children in 1995 to 251,000 by 1999. And health officials in Pennsylvania, one of the first states to develop health insurance programs for low-income children, plan to pursue an increase in that state’s tobacco tax next year to fund an expansion in services. Some 3,000 children in Pennsylvania are currently on waiting lists.
Elsewhere, states are attempting to tackle the steady erosion in the numbers of insured children by supporting programs such as the Florida Healthy Kids Corporation, which administers a publicly funded school-based insurance program for children.
But, Randy Desonia, chief of health policy studies at the National Governors Association, cautions that while states are trying a variety of solutions to meet the need of uninsured and underinsured children, "there is a concern about how far they can go to finance such programs if this erosion continues."
Rose Naff, chief executive officer of Florida’s Healthy Kids Corporation, notes that some help is coming from the private sector, with a growing number of insurers developing insurance plans specifically for children. "When we started, there were no children’s products in managed care. Now, a number of plans have developed children-only products," she says.
"When we started, there were no children’s products in managed care. Now, a number of plans have developed children-only products,"—Naff
Most public and private health insurance programs for children require some cost-sharing from families above a certain income level, which helps avoid the "freebie" stigmatization of welfare. In Massachusetts, some families pay as little as $10.50 per child per month, while others pay $52.50. Before passage of this summer’s legislation, the program was available for children up to age 12. Now, children up to age 18 will be eligible.
At one point, Massachusetts had to cap enrollment due to limited funds, a problem other states have faced as well. Waiting lists developed as a result. Now, with eligibility opened back up, a new challenge has developed: how to alert families that they may qualify. The state has limited resources to do outreach, which, at this point, falls under the jurisdiction of the public health department. Jackie Williams is primarily responsible for marketing the program and travels the state, speaking to schools and legislators about how to get the word out. "We’ll go wherever we can go and do whatever we can do," she says.
New York’s Child Health Plus program also provides insurance on a sliding scale, but most families who participate are completely subsidized. The legislature voted in June to expand the program, extending the eligibility ceiling from age 14 to age 18, and adding inpatient hospital services to the benefit package. The program served 104,000 children in 1995, and the expansion will increase the total children served to 251,000 by 1999. The program is funded by the state’s uncompensated care pool, which is supported by payer contributions. Expenditures are expected to increase to $207 million per year by 1999, compared with $82 million now.
Prescription drugs included
The New York program now covers primary care, preventive care, inpatient care, and other services, including prescription drugs, for children up to age 18. Children are eligible if they do not have equivalent insurance, are not enrolled in Medicaid, and are New York residents. Premiums are on a sliding scale according to family income (if family income is between 160% and 222% of the federal poverty level), but, currently, almost 87% of enrollees are completely subsidized because their family incomes fall below that range. State officials do not expect the percentage to change much under the expansion.
Pennsylvania’s Children’s Health Insurance Program (CHIP), begun in 1993, is another example of a large, state-run program funded by a dedicated state tax, in this instance a 2 cent per pack cigarette tax. The tax generates about $21.5 million a year, with parental premium contributions making up the rest of the $30 million budget. The program serves 50,000 children, but 3,000 children are currently on waiting lists. A proposal to raise the cigarette tax an additional cent failed this past legislative session, but Lowware Holliman-Murray, project manager for CHIP, believes it will pass in the next session.
There was a fair amount of support for the tax increase, including that of Gov. Tom Ridge, says Ms. Holliman-Murray, but the "legislature didn’t want to open up the tax code" for fear that other groups would demand changes. However, she says, "We have to go on faith. There are other alternative taxes, but the cigarette tax looks like the best choice."
The question for most states, obviously, is how to fund these programs and any subsequent expansions. The Massachusetts expansion will be funded by a 25 cent per pack increase in the tobacco tax. Governor Weld opposed the tobacco tax and suggested that the funding could come from restructuring the state’s uncompensated care pool. David Ball, a spokesman for Governor Weld, says that "[Governor Weld] has always been in favor of a plan to expand access to the uninsured. He just opposed the vehicle."
Programs such as those in Massachusetts, Pennsylvania, and New York will only continue to grow, says Charles LaVallee, executive director of the Western Pennsylvania Caring Foundation and a pioneer in the area of health insurance for low-income children. Mr. LaVallee believes, in fact, that the state programs are building on the success of smaller, privately funded programs that preceded them. "Once you demonstrate that it’s doable, you’re going to need large-scale, public sector funding."
—Jana Sansbury
Contact Ms. Naff at 904 224-5437; Mr. Desonia at 202-624-5300; Ms. Williams at 617-624-6060; Ms. Holliman-Murray at 717-787-2317; Mr. Ball at 617-727-0077; and Mr. LaVallee at 412-645-6202.
Steady growth in uninsured children spurs states to expand subsidized programs
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