CHIP Fact Sheet - Children's Health Insurance Program

• According to 2003 U.S. Census data, Texas has the highest rate of uninsured children in the country, with 21.6% of children lacking healthcare coverage.
• Nearly 90% of uninsured Texas children have at least one working parent.
• As a result of cuts approved by the Texas Legislature, CHIP enrollment has dropped by 167,158 children since cuts took effect on September 1, 2003, decreasing from 507,259 children enrolled in September, 2003 to 340,101 children enrolled as of November, 2004.
• All 340,101 children still enrolled in CHIP have lost dental, vision and hospice services.
• As a result of cuts to CHIP, Texas will miss out on more than $500 million in federal matching dollars that could go to local communities to pay for healthcare services for children.

LOCAL IMPACT:

• Costs will be shifted to local property tax payers. For every $1 invested in CHIP, Texas receives $2.59 in federal matching funds. For every $1 invested in Medicaid, Texas receives $1.50 in federal matching funds. If working families lose CHIP and Medicaid coverage and return to local city and county health clinics for care, local taxpayers absorb 100% of the costs. Property taxes and rents may increase as county residents assume the full costs of the cuts.
• Cuts to preventive care will place additional strain on already overcrowded emergency rooms. Uninsured children are five times more likely than insured children to use the emergency room as their primary source of medical care, which can create overcrowding in the ER for care that could be delivered in a doctor's office instead. When emergency rooms are overcrowded, new trauma cases may be diverted to other facilities, delaying emergency care. For example, emergency rooms in Houston/Harris County are on "divert status" up to 30% of the time.
• Emergency room treatment is far more costly than preventive investment. According to the Harris County Hospital District, the cost of preventive treatment for an established patient's mild asthma attack in a doctor's office is $94 to $103 using oxygen or a nebulizer and medicines. In comparison, the cost is $9,209 to treat that patient who comes to the Harris County Hospital District's emergency room with full symptoms and has to be hospitalized for three days, which is the average stay.

BACKGROUND:

What is the Children's Health Insurance Program?

• The Children's Health Insurance Program (CHIP) is a publicly funded health insurance program for children, authorized and funded by Congress in 1997 and requiring a state funding match. CHIP is administered by states through private insurance companies.
• Texas CHIP was created during the 1999 legislative session and began in April 2000. CHIP is designed for uninsured children in families that earn too much to qualify for Medicaid but cannot afford their own health insurance.
• The top limit of eligibility is 200% of federal poverty level - or an annual income of $31,340 for a family of three, for example.
• The Texas CHIP rollout was among the most effective in the nation, with peak enrollment of more than 500,000 children before cuts were made to the program beginning in September 2003.

Summary of cuts to CHIP:

• Facing a $10-16 billion budget shortfall for the 2004-05 biennium, the 78th Texas Legislature reduced funding for CHIP which resulted in unprecedented changes to the Children's Health Insurance Program, including the following:


• The elimination of dental, vision and hospice benefits for all children still enrolled in CHIP.
• Children declared eligible must wait for 90 days for CHIP coverage to begin, including newborns.
• Childcare, child support and work-related expenses are no longer considered in determining a child's eligibility for coverage.
• CHIP co-pays and premiums have increased.
• Coverage has been reduced from 12 to 6 months of eligibility.
• A new CHIP assets test was implemented in August, 2004 for families earning above 150% of the federal poverty line ($23,505 a year for a family of three). Families with assets of more than $5,000 will no longer be eligible for CHIP. Countable assets include: cash, checking and savings accounts, money remaining from the sale of a homestead and the cash value of stocks, bonds and savings certificates. Vehicle values are also counted towards the asset test, including values exceeding $15,000 on the first vehicle and values exceeding $4,650 on each additional vehicle.

For more information, contact , 512-480-0990
or , 713-664-4080
www.cdftexas.org