THE UNINSURED: Texas’ Healthy Kids Program Faces Financial Woes
Thousands of children enrolled in Texas Healthy Kids Corp., a joint public-private effort launched three years ago to provide coverage for the uninsured, will have to find a new insurer next month due to a shortfall in program funding, the Wall Street Journal reports. The Texas Legislature authorized state funding for Healthy Kids in 1997 with the expectation that private donations would subsidize the remaining costs, but the program managed to raise only about $400,000 in private contributions during its first two years -- "far below" its goal of $8 million. Also, enrollment turned out to be much lower than organizers of the privately run not-for-profit agency had anticipated. Consequently, Healthy Kids officials say they do not have enough private funds to pay for "sharp" rate increases set to take effect July 1 and, thus, will have to drop many of the program's 11,233 enrollees who will not be able to afford higher premiums. To address the situation, Texas Insurance Commissioner Jose Montemayor plans to survey the state's insurance companies to determine "what coverage is available for children in the program." He will present his findings at a meeting on June 27. Most Healthy Kids enrollees should be able to secure coverage through the Children's Health Insurance Program, but about 550 do not qualify for the state-federal health coverage. Several insurers that offer child-oriented plans may be able to cover former Healthy Kids members. Still, the Wall Street Journal reports that those options do not "do anything for many of the children without insurance that Healthy Kids was supposed to help but never enrolled." About 350,000 families with children earn too much to qualify for CHIP.
Officials attribute the fundraising troubles and low enrollment to competition from the "larger and better-financed" CHIP, which was established in Texas shortly after the launch of Healthy Kids. While Healthy Kids has no income limit and charges $58 to $113 a month for coverage, low-income CHIP beneficiaries pay only $15 per year and higher income families pay only $18 per month plus co-payments. CHIP also offers "slightly more expansive benefits" than Healthy Kids (Elder, 6/14).
Meanwhile, some health advocates want the state to expand eligibility for CHIP and to allow parents of eligible children to enroll as well. Currently, children in a family of four earning up to 200% of the federal poverty level, or $34,100 annually, qualify for coverage, but advocates are pushing lawmakers to raise income limits to 250% of poverty guidelines, or $42,624. The increase would render an additional 160,000 to 180,000 children eligible. Analyst Lisa McGiffert of the Consumer's Union said, "This is a really smart way to cover more people without creating a new program." The proposal is just one of several under consideration by the state's Blue Ribbon Task Force on the Uninsured, which will make recommendations this summer on how to provide coverage to uninsured Texas, who make up 25% of the state's population. Other proposed plans include: expanding Medicaid coverage to more adults and providing access to prescription drugs for HIV/AIDS patients and the mentally ill; requiring proof of health insurance at the time of car registration and mandating coverage for all college students. The uninsured are a "difficult problem in a state as big and diverse as Texas," state Sen. Chris Harris (R), chair of the task force, said, adding, "I hope to make some real headway in this problem" (Merle, Wall Street Journal, 6/14).