HHS call for more insured children clashes with state budget troubles

A budget deficit prompted a freeze on CHIP enrollment in California, while Texas isn't expected to increase Medicaid or CHIP funding.

By — Posted Sept. 20, 2010

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Federal health officials are challenging states and others to enroll nearly 5 million uninsured children who are eligible for Medicaid or the Children's Health Insurance Program.

Dept. of Health and Human Services Secretary Kathleen Sebelius issued the call during a Sept. 3 event highlighting the Connecting Kids to Coverage Challenge, a national campaign to enroll the 4.7 million uninsured children eligible for Medicaid or CHIP. She said no children should go without health care because their families can't afford it.

"I'm challenging everyone, from my state and federal counterparts, to local governments and community-based organizations, to health centers and school districts, to faith-based groups and Indian tribes to ... find and enroll those 5 million kids," she said.

However, those enrollment efforts are being hurt by the financial reality of state budgets.

HHS is allocating $120 million in Medicaid and CHIP outreach grants to states under the 2009 CHIP reauthorization and the national health reform law. But Sebelius said some states are facing multibillion-dollar budget deficits and might not have the funds to expand or improve their Medicaid and CHIP programs significantly.

"For some states, they just don't have [the money]," she said.

Medicaid or CHIP coverage is available in almost every state for children in families who earn up to $45,000, which is about twice the federal poverty level for a family of four. Sebelius said the number of uninsured children could be reduced significantly if California, Florida and Texas sign up the 1.8 million uninsured children in those three states.

California had about 700,000 program-eligible children in 2008, the largest number in any state, according to a study published online Sept. 3 in Health Affairs. But the state's multibillion-dollar budget deficit led the state to freeze CHIP enrollment between July 17 and Sept. 16, 2009.

Enrollment has not rebounded since the freeze took effect, said Kelly Hardy, health policy director for Children Now, a health care advocacy organization in Oakland, Calif. "When there is an enrollment freeze, there's just a chilling effect."

Children's enrollment in California's Medicaid program declined in recent months to 3.4 million on Sept. 1, down from a two-year high of 3.7 million on May 1, according to the state's Medicaid agency.

Health care in California -- especially at community health centers and clinics -- is being squeezed by a budget stalemate between Gov. Arnold Schwarzenegger and state lawmakers. The standoff forced the state's Medicaid agency to begin sending IOUs to community health centers in late August in lieu of their state and federal Medicaid pay.

The state also has cut back on Medicaid support staff, said Thomas C. Bent, MD, immediate past president of the California Academy of Family Physicians. For example, the state used to provide a Medicaid worker at Laguna Beach Community Clinic, where Dr. Bent is medical director, to help patients with questions. But the worker was promoted to a higher position a few years ago and has not been replaced.

Ensuring coverage in Texas

Texas' Medicaid enrollment increased by more than 400,000 children the past two years to reach 2.3 million. Improved processing of Medicaid applications and the Legislature's approval of an additional 1,800 Medicaid workers may have played a role in the increase.

But some simple changes could lead to insuring more children in Texas, health officials said.

Requiring Medicaid renewals annually instead of every six months would significantly decrease the number of uninsured children, said Laura Guerra-Cardus, MD, policy director of the Children's Defense Fund of Texas. However, the state would have to spend at least $440 million more on Medicaid, according to a 2008 estimate by the state's Medicaid agency.

Also, only about 42% of Texas physicians see Medicaid patients, in part because the payments for the program have not kept up with physicians' expenses, according to Texas Medical Assn. surveys.

"Bringing another 400,000 or 500,000 kids in the state onto the Medicaid rolls doesn't mean they're going to have a doctor," said John Holcomb, MD, chair of the TMA's select committee on Medicaid.

Texas lawmakers are unlikely to increase Medicaid and CHIP spending, said Jane Rider, MD, former president of the Texas Pediatric Society, a chapter of the American Academy of Pediatrics. "Our legislators are looking at how they're going to balance the budget."

Forecast for Florida

In Florida, the state's CHIP program began as a national model but became an embarrassment when state budget cuts in 2003 and administrative changes led to waiting lists, said Linda Merrell, RN, who ran a pilot program in Volusia County that served as a model for CHIP. "We've never maximized the use of available federal dollars," she said.

However, the Legislature eased CHIP enrollment restrictions in 2008. The state allows children to enroll 60 days after voluntarily canceling private coverage instead of six months and also verifies income electronically, said Shelisha C. Durden, spokeswoman for the state's Medicaid agency.

Florida CHIP and Medicaid enrollment increased by about 400,000 children between June 2008 to June 2010 to reach 1.8 million, Durden said.

But like other states, Florida has not increased its Medicaid pay to keep up with physicians' costs, said Louis St. Petery, MD, a pediatric cardiologist and executive vice president of the Florida Pediatric Society, an AAP chapter. Florida Medicaid and CHIP pay is about 56% of Medicare rates on average, he said.

Most pediatricians in the state can't pay their bills if they have a patient mix of 30% or more Medicaid enrollees. Most Florida pediatricians try to limit their Medicaid patient mix to 10% or 20%, Dr. St. Petery said.

He is skeptical that the Republican-led Legislature will try to enroll the 430,000 uninsured children who are eligible for Medicaid or CHIP in Florida. Lawmakers have talked about getting uninsured children the coverage they need, but they have not provided the necessary funding, Dr. St. Petery added.

Florida could see a $2.5 billion deficit on its fiscal year 2011 budget of $27.7 billion, according to state budget researchers.

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Help for low-income children

Of the roughly 7.3 million uninsured children in the U.S. in 2008, 4.7 million were eligible for Medicaid or the Children's Health Insurance Program. Among eligible children, most are in the lowest family income group or not far above it.

Eligibility of uninsured children by family income level, 2008

Ineligible for Medicaid/CHIP2.5 million35.2%
Eligible for Medicaid/CHIP, income below 133% of poverty3.0 million41.1%
Eligible for Medicaid/CHIP, income 133% to 200% of poverty1.2 million16.7%
Eligible for Medicaid/CHIP, income more than 200% of poverty0.5 million7.0%

Source: "Who and Where Are the Children Yet to Enroll in Medicaid and the Children's Health Insurance Program?" Health Affairs, September (link)

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Uninsured children

California, Florida and Texas have more than a third of the 4.7 million uninsured children who are eligible for Medicaid or the Children's Health Insurance Program. Here are 10 states with the most uninsured eligible children.

Eligible uninsured children in 2008

Top 10 statesNumber% of total
New York164,0003.5%
North Carolina125,0002.7%

Source: "Who and Where Are the Children Yet to Enroll in Medicaid and the Children's Health Insurance Program?" Health Affairs, September (link)

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