States Stop Expanding CHIP Enrollment

An increasing number of states are cutting back on their CHIP programs, as growing budget deficits combined with higher-than-expected enrollment have made expansions of the once politically popular program for low-income children less attractive, the Los Angeles Times reports. When CHIP was launched in 1997, then-President Clinton touted it as the "most significant expansion in public health insurance in more than three decades," and Congress pledged up to $24 billion in federal matching funds over five years. With healthy budgets in hand due to the economic boom of the late 1990s, states "stumbl[ed] over themselves to court youngsters" into their CHIP programs, the Times reports. Last year, enrollment nationwide reached 4.6 million children following a 38% increase from 2000, and the "biggest challenge was finding more [children] to take part." But now facing budget deficits, states have reduced or frozen enrollment, cut back on marketing and outreach and added restrictions and fees. In doing so, some states have forgone millions of dollars in federal contributions, whose matching rate reaches up to 85%, depending on a state's per capita income. Utah, Montana and North Carolina have all frozen or capped enrollment, though North Carolina later reopened it; Oklahoma and New Mexico have "come close to dropping children from the program; Idaho has stopped marketing its program; Kentucky has made its enrollment process more difficult for parents; and Rhode Island has introduced monthly premiums for the first time. "Unless we rein in this very generous program -- the Cadillac of all programs -- it's going to bust our budget and force a tax increase," Diane Kinderwater, a spokesperson for New Mexico Gov. Gary Johnson (R), said.

This sentiment stands in sharp contrast to CHIP's popularity among state politicians when the economy was flourishing, largely because of the high federal matching rate and the fact that the program targeted low-income families, not those on welfare. "States had been working so hard to make it easy for families to enroll," Rachel Klein, a health policy analyst for Families USA, said, adding, "They practically competed against one another in how fast they were enrolling kids." Many states are still recruiting new enrollees for their programs. But even though the federal government has continued its financial support for CHIP -- even encouraging states to expand the programs by offering them greater flexibility -- others states have concluded that they simply cannot afford to continue expanding. In some cases, the program has been a victim of its own success, as higher-than-expected enrollment has also increased the strain that CHIP places on state budgets. For instance, Utah based its $5.5 million CHIP budget on an anticipated enrollment of 21,000 children; by December, enrollment had reached 27,500, according to Stephen McDonald, a spokesperson for the state Department of Health. Utah's situation highlights the double-bind many states are currently in, according to Vickie Gates, director of State Coverage Initiatives, a program backed by the Robert Wood Johnson Foundation. "Just when their revenues are going down because of economic circumstances, they're faced with the greatest increase in need" for CHIP, she said. Whatever the reasons, many children's advocates are "furious at what they consider a betrayal" by states of low-income children, the Times reports. Michele Casey of the Idaho Community Action Network said, "We do agree that costs are rising, but they should not be turning to Idaho's low-income families to save costs" (Ornstein, Los Angeles Times, 2/25).