While more children are now insured, more money goes unspent
November 1, 2000 4 minutes read
While more children are now insured, more money goes unspent
The number of uninsured children in America is declining, but that’s a bittersweet fact for those watching 40 states lose millions of dollars of federal money that has gone unspent.
When the Children’s Health Insurance Program (CHIP) was created by Congress in 1997, $4.2 billion was made available to states to insure those children in families who were ineligible for Medicaid but still could not afford private insurance. Now $1.9 billion of that unspent money will be siphoned off to the 10 states that did manage to spend their allotment.
"From our perspective, it’s frustrating that the money hasn’t been spent," Gregg Haisley, deputy director of the health division of the Children’s Defense Fund of Princeton, NJ, tells State Health Watch. "But, to put it in context, more than 2 million kids have been covered since CHIP was created in 1997. That’s success. The downside is that the unspent dollars represent a missed opportunity. While there are good things happening, we’d like to see the pace picked up."
State programs have plenty of hurdles in front of them that keep children under age 18 from receiving the health insurance coverage that the federal and state governments would like them to get. They include children who have dropped off the enrollment list and must be re-enrolled, or families that have no idea the program exists so their children remain uninsured.
The Urban Institute in Washington, DC, has an explanation for the problem. In a recent study, "Three Years Into SCHIP: What States Are and Are not Spending," the institute says state spending falls short because of the nature of the funding, which is described as having a U-shaped pattern.
Typically, Urban Institute officials say, new program spending has an upward trajectory, followed by lower spending in its first years as programs are honed, then more spending follows as the programs gain momentum. CHIP has a different look, the institute says, that changes the dynamic of the program and results in the unspent dollars that are planned to flow from the 40 states that have not spent their allocations to the 10 states that have.
Don’t judge the program by how well the states have spent their allotments, the authors of the study conclude.
"Two other questions need answers," says Genevieve Kenney, one of the study’s authors. "Policy-makers need to know how well state CHIP and Medicaid programs reach their target populations, and to what extent mature state CHIP programs ensure new low-income programs."
With 10 million children going uninsured in America that could be covered by CHIP, according to the Children’s Defense Fund, a simplification of state programs over time will lower the numbers.
"In the overall picture, this is a problem that is a partisan outgrowth of the creation of a new program. We realize there is some ramp-up time for starting a new program," Mr. Haisley adds. "At a certain point, in a couple years, we expect states to spend all their money."
There are proposals before Congress that could change the way the money is allotted to states, according to the Urban Institute. Allowing states more time to spend their money is one and increasing the amount available to each state is another. Also, institute officials say, there may be a move to allow adults to be covered by unspent CHIP money.
Mr. Haisley says Congress, in the concluding days of its recent session, was considering a proposal that would allow states to keep the federal CHIP money that they had not spent, giving them another three years to find ways to insure children. "You can bet the ranch there will be an extension," he says.
As it stood before Congress’s expected recess in October, states that have used their allotments were Alaska, Indiana, Kentucky, Maine, Massachusetts, Missouri, New York, North Carolina, Pennsylvania, and South Carolina. Each will have until Sept. 30, 2001, to spend the money from the other 40 states. After that, the unspent dollars go back to the U.S. Department of the Treasury.
The Children’s Defense Fund says states could find more children that are eligible for the program by increasing outreach funding and expanding their partnerships with community-based organizations.
"When CHIP came along, a lot of states simplified their Medicaid benefits," Mr. Haisley says. "You used to have to go to a welfare office for an interview. With CHIP, you mail in the applications; there is no interview at a welfare office. Many states also eliminated asset tests. Most states eliminated all those barriers and began to treat CHIP as the medical program that it really is."
With the lessons that states have learned, Mr. Haisley adds, the program is becoming easier to administer and much more family-friendly. "They are trying to keep children in CHIP," he says. "And once they are in, that is really only the beginning of trying to keep them in."
In Alabama, according to state officials, many children went without health insurance because:
• Insurance costs too much.
• They were no longer eligible for Medicaid.
• Family wage earners either lost or changed their jobs.
• Employers dropped their health coverage.
There are plenty of reasons states say they cannot spend the money allocated by the federal government. "If we enrolled every single eligible child in Colorado, we still couldn’t spend our full allocation of federal money. Our economy is doing so well, there are fewer eligible kids than what was estimated when the federal government did its initial allocation of money," William N. Lindsay, head of the board that supervises the program in Colorado, told the Associated Press.
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