Stateline Story

Five States Freeze CHIP Enrollment

Several cash-strapped states are opting to freeze enrollment in their children's health insurance program (CHIP) and make uninsured kids wait for coverage.

Alabama, Colorado, Florida, Montana and Utah are doing this as a way to maintain their CHIP programs rather than tighten eligibility rules or cut back services for those who are already enrolled.

CHIP programs cover more than 5.3 million children of low-income parents. CHIP didn't get hit as hard by the budget axe as other areas of health care, policy analysts said, because children are generally less expensive for states to cover and chopping children's programs is often politically unpopular.

"I think it's horrible that any child doesn't have health insurance," said Cynthia Pernice, a project manager at the National Academy of State Health Policy (NASHP) a non-profit research organization based in Portland, Maine. But given the choices states have, waiting lists are just one tool states can use to maintain their current programs without making further cuts, she said.

CHIP is a state-federal program created in 1997 to help states extend health care coverage to poor children whose parents make too much money to qualify for Medicaid, the state-federal insurance program that covers an estimated 40 million poor and disabled Americans. Some states operate CHIP programs through Medicaid, which doesn't allow waiting lists, but 35 states operate stand-alone CHIP programs and are therefore permitted to put holds on how many children they admit.

Some states said these cost-containment measures are better than simply scaling back services. For example, the Texas Legislature voted to eliminate mental health services for CHIP beneficiaries but restored partial benefits in late October after a federal agency probed how the elimination would affect children in the state, according to the Texas CHIP coalition Web site.

Though states receive a federal match for CHIP some states are having trouble coming up with their share.

That was the case in Alabama, which stopped new CHIP enrollment and started a waiting list Sept. 1. After Republican Gov. Bob Riley's tax referendum failed, the state came up more than $3 million short of what it needed to get the federal match, losing about $12 million in federal funds, said Mary Weidler, a policy analyst at Alabama Arise, an advocacy group made up of 150 religious and community organizations across the state.

"If we had gotten the tax referendum package we would have a health services budget that is adequate," Weidler told Stateline.org. The state slashed funding to state agencies on average this year by 18 percent, she said.

Gayle Sandlin, Alabama's CHIP director said starting the waiting list, which is more than 2,400 kids deep, was an "extremely difficult decision." The waiting list does not make exceptions or give priority to any child, regardless of prior CHIP status or medical conditions.

"We get daily requests from folks who have children who are having crises, who need medical care and don't know how they are going to wait until they come off the waiting list. They're very, very concerned," Sandlin told Stateline.org.

North Carolina was the first state to implement a waiting list in 2001 for its CHIP program, Health Choice. The state does not have a waiting list now, but it came close to another enrollment freeze twice in the last 18 months. State CHIP Director June Milby said that prospect haunts her.

"The pain that you feel for these people is indescribable and it just gets a little bit worse with each passing day," Milby told Stateline.org. "If I had to vote on freezing, I'd say no. The cost is so great, particularly when you're dealing with kids with chronic conditions."

Montana implemented a waiting list in 2001 that lasted until Nov. 1, when Gov. Judy Martz (R) granted an additional $609,000 in state funds to remove 13,034 children from the state's waiting list, said Mary Noel, the state's CHIP director. However, the money won't cover all new enrollees and a new waiting list has started. At this time there are only a few hundred children on it and Noel estimates waiting periods of one or two months.

"I know some states do it differently ... but because we have a smaller population I think the waiting list worked well for us," Noel told Stateline.org.

Florida imposed a waiting list at the end of this year's legislative session for the Florida KidCare program, and unofficial estimates have the waiting list hitting 50,000, said Melanie Nathanson, a senior health policy analyst at the Washington, D.C.-based Center on Budget and Policy Priorities.

Utah imposed an enrollment freeze, but does not keep a waiting list. Instead the state offers periodic open enrollment periods when every child who applies and is eligible during a certain window of time is enrolled, policy analysts said.

And Colorado's CHIP program stopped enrolling children Nov. 1 because the state could not afford to cover any more than the 56,000 children already signed up. Karen Reinertson, executive director of the state Department of Health Care Policy and Finance, told the Denver Post that capping enrollment is better than running out of funds and having to cut children off the rolls. "That would create more chaos down the road," she said.