Stateline Story

Children's Insurance Enrollment Numbers Disappointing, Experts Say

WASHINGTON - Spurred on by President Bill Clinton, Congress in 1997 created the Children's Health Insurance Program, or CHIP, a ten-year, $48 billion plan to fund health care for kids of the working poor. It was the biggest federal investment in health insurance since Medicare and Medicaid were established 34 years ago.

But the state-administered program is off to a slow start, with less than one in five of the estimated five million children eligible enrolled so far. The scanty participation is worrisome to some, who say the program's funding could be at risk if states cannot find and enroll more kids.

The background is this: The Census Bureau estimates that 10.7 million children -- 15 percent of all kids 18 and under -- are uninsured. Nearly half of them come from families whose parents earn too much to qualify for Medicaid, the government health insurance program for the poor, but not enough to pay for private health insurance.

CHIP funds, a total of $48 billion over 10 years, first became available to states in October 1997. Early this month, the first enrollment numbers were released.

An e-mail survey conducted by the National Governors' Association in late January shows that 828,000 kids have been enrolled so far. NGA received responses from 33 of 47 states that have implemented programs. Washington and Wyoming have not yet submitted plans to the Health Care Financing Administration (HCFA), the federal agency that oversees the program, and Tennessee's plan has not yet been approved.

More than 50 percent of the participants are enrolled in programs in New York, Pennsylvania and Florida, all of which had existing programs when the CHIP legislation was passed. New York has about 280,000 kids enrolled, Florida about 80,000 and Pennsylvania just more than 65,000. The remaining 30 states account for the other half of the enrollment numbers.

The enrollment numbers are disturbing to some officials, who fear the program's funding could be at risk if states cannot find and enroll more kids.

"There is a great deal of concern internally and with advocacy groups that if the numbers don't look good, Congress will say you don't need $24 billion (the first five-year installment of the program) because you are not enrolling kids," an administration official said.

Sens. Edward Kennedy (D-Mass) and Orrin Hatch (R-Utah) were the principal authors of CHIP. According to Kennedy spokesman Jim Manley, funding of the "well received" program is not at risk currently. But he says anything is possible "anytime there is a Republican-controlled Congress with a shortage of money."

"I can't imagine Congress revisiting the funding issue.... But as with any federal program, except for Social Security and Medicare, Congress can revisit these programs," said Rob Foreman, a staff member in Sen. Hatch's office. Foreman said he expects oversight hearings in the Senate Finance Committee sometime this summer, although there has as yet been no formal announcement.

Within a month, HCFA plans to release its first official enrollment numbers of kids covered by CHIP plans. The agency is currently compiling state's first annual reports on the program that were due in January. So far, only 30 states have submitted reports.

The Government Accounting Office, the investigative arm of Congress, will also be releasing a report on the massive program by the end of April. But, the GAO report will not include any enrollment numbers.

"Although people want to look at the numbers and make some conclusions, it is really too premature," said Walter Ochinko, one of the four authors of the GAO report and assistant director of the GAO's Health, Education and Human Services Division. "It will be a while before you can get enough data to make any judgements."

Ochinko said the 100-page report was requested by Sen. Kennedy, the ranking member on the Senate's Health, Education, Labor and Pensions Committee, and by House Commerce Committee Chairman Rep. Tom Bliley (R-Va.).

The GAO was asked to look at whether states had sufficient flexibility to design effective CHIP programs; whether they considered statutory options such as extending coverage to adults in families with children; whether they developed innovative outreach strategies to reach potential participants; and how they tailored strategies to avoid "crowd-out" (dropping private insurance to enroll in public insurance.)

CHIP was enacted as part of the Balanced Budget Act of 1997. It created a federal-state partnership to insure the country's uninsured children who did not qualify for Medicaid benefits.

To qualify for federal funding, states had to submit plans to HCFA for review and approval. Once approved, states were eligible to receive federal matching funds of 75 percent based on each state's share of the nation's uninsured children with family incomes below 200 percent of the federal poverty level, with adjustments for differences in healthcare costs across states. In 1999 the federal poverty level for a family of four is $16,700.

Of the approved plans, 34 states chose to provide Medicaid benefits alone or in combination with another benefits package. Fourteen states have come up with a separate, state-designed program to insure children.

Many of the states didn't start enrolling kids until July 1998. By the end of last year, 38 CHIP programs were operational for an average of about six months, said Joan Henneberry, director of Maternal and Child Health at the National Governors' Association.

NGA is the first organization to collect and release CHIP enrollment figures. The organization has turned over the results of the survey to HCFA so that the numbers can be compared with those being submitted with state's CHIP annual reports.

"States should be very proud of this as a first benchmark but we know that there are still a lot of uninsured children out there that need to be enrolled," Henneberry said. "Nobody is sitting back and relaxing."