CHIP: Congress May Extend Deadline to Spend Funds

      While 40 states stand to lose an estimated $1.9 billion in unspent CHIP funds, legislation unanimously approved by the House Commerce Committee on Tuesday might grant the states a two-year reprieve, the AP/Ft. Worth Star-Telegram reports. In 1997, Congress provided states with $40 billion over 10 years to implement and administer a CHIP, giving them three years, beginning Oct. 1, 1997, to use the first installment of $4.2 billion (Gamboa, AP/Ft. Worth Star-Telegram, 9/27). Forty states were expected to lose a total of $1.9 billion in federal CHIP funding by the end of September because they would not spend the entire first installment, the New York Times reported Sept. 24. Ten states were expected to have spent their 1998 allocations (American Health Line, 9/25). The Commerce-approved provision, sponsored by Rep. Brian Bilbray (R-Calif.), would allow the 40 states to recoup about $1.2 billion of the 1998 funds and give them until 2002 to use the money, while the 10 states that spent their full allocation would receive the remaining $750 million. The measure would also extend the deadline for using 1999 funds from October 2001 to 2003 (AP/Ft. Worth Star-Telegram, 9/27). If Congress does not approve the legislation, the 10 states -- Alaska, Indiana, Kentucky, Maine, Massachusetts, Missouri, New York, North Carolina, Pennsylvania and South Carolina -- would receive the entire $1.9 billion, a potentially "huge windfall" for their public assistance programs (McAllister, Denver Post, 9/28). However, supporters remain "confident" that Congress will pass the measure, because it is part of a larger bill, H.R. 5291, that would raise Medicare reimbursement rates for health care providers -- legislation Congress will likely approve (AP/Ft. Worth Star-Telegram, 9/28).

Why the CHIPs Are Down
      According to a New York Times report, the reasons few states successfully used their share of federal CHIP funds or enrolled enough children often "defie[d] convenient leaps of logic and ... the expectations of experts." Geography played a minimal role in some states' success, and although successful states shared a few "crucial" factors -- such as energized groups "obsessed with getting the plan rolled out" and simpler application forms -- "odd legislative twist[s] of fate" often determined some states' success. "All of this just shows how weird policy can be," Rhea Williams-Bishop, a Children's Defense Fund coordinator, said, adding, "Putting it in place and implementing it are really two different things, and one quirky event can really change the situation." Leaders in many states said that they could not "find enough children to enroll" or placed them in Medicaid instead. Still, some states "made a much more concerted effort" to enroll children into the program. Alaska, for example, hired a marketing expert to develop a "snappy" advertising campaign for its "private insurance-sounding" CHIP, called Denali KidCare. The state has enrolled 38,980 children -- 20,000 more than expected. "We wanted to create a program that didn't feel like government," Karen Pearson, deputy director of the division of public health in the state's health department, said. In Arizona, however, "a few powerful state legislators" opposed CHIP and prevented the state from advertising it in public schools, leading to "low" enrollment. "That had a chilling effect. School districts were hesitant to do anything in our outreach efforts," Frank Lopez, a spokesperson for the Arizona Health Care Cost Containment System, said. While New York's CHIP, which often recruits in schools, became a "model for other states," Texas' CHIP suffered because the Legislature, which meets every two years, had adjourned after Congress passed CHIP in 1997. In addition, Texas, California and other states "were dogged by fears among legal immigrants that their status would be challenged" if they accepted the program (Steinhauer, New York Times, 9/28).

Trouble in New York?
      Some of the 539,469 children in New York's CHIP, Child Health Plus, will have to transfer into the state's Medicaid program beginning this Sunday, leaving state officials and health insurers "scrambling" to ensure that they do not lose coverage, the Binghamton Press & Sun-Bulletin reports. The move comes days after the New York Times reported that New York was one of ten states to spend its entire 1998 federal CHIP allotment. The federal government, which covers 65% of the cost of CHIP but only 50% of Medicaid, mandated the change. While Child Health Plus was designed to assist families "with modest incomes" secure health coverage for their children, "poorer people who are eligible for Medicaid" enrolled in Child Health Plus instead of Medicaid "in part because the stigma some attach to Medicaid." Elie Ward of the Statewide Youth Advocacy said that Medicaid provides more coverage than Child Health Plus, but added that most doctors who accept Child Health Plus patients also care for Medicaid patients. Ward added, "We have to learn to market Medicaid as effectively as we've marketed Child Health Plus." While the state Health Department did not know exactly how many children the change would affect, Geoffrey Taylor of the state Blue Cross and Blue Shield Plans said New York would transfer about half the children now in Child Health Plus to Medicaid. "We are concerned that the unintended consequences of the regulatory changes could be that children will lose their insurance coverage," Taylor added, noting that the state has earmarked $6 million to ease the transition. "It's possible it's not going to work as smoothly as we would hope, but there's a strong commitment by the state Health Department to make sure we don't lose kids," Ward said (Gallagher, Binghamton Press & Sun-Bulletin, 9/28).