Texas Legislature reinstates important CHIP benefits

The Texas Legislature restored several important benefits to the Children's Health Insurance Program (CHIP), but fell short in fully funding the program for the 2006-2007 biennium.

Dental, vision, hospice and mental health services were restored to the CHIP benefits package, monthly premiums have been replaced with more affordable and convenient enrollment fees, and lawmakers added funds to increase enrollment. An important provision also requires that the Texas Health and Human Services Commission request additional funding from the Legislature if there is a CHIP shortfall before imposing a wait list, enrollment cap, or cuts to eligibility or benefits.

"These restorations are significant victories for uninsured children and represent the hard work and commitment of hundreds of organizations across the State that worked to restore the Texas CHIP program," said Barbara Best, Texas Executive Director of the Children's Defense Fund.

The Campaign to Restore CHIP also thanks the lawmakers who supported CHIP restoration, particularly Senator Kip Averitt (R-Waco), who filed legislation to fully restore CHIP and championed an unsuccessful effort to restore 12 months continuous eligibility for children; and Senator Judith Zaffirini (D-Laredo) who developed the rider language to seek additional funds before creating a wait list or enrollment cap.

"Without such strong leadership for children's health, these restorations would not have been achieved," said Anne Dunkelberg, Assistant Director of the Center for Public Policy Priorities. "We thank the legislators who worked tirelessly for restoration and achieved these successes despite many competing demands. Their commitment has made important progress for children."

Renewed investment in outreach efforts to inform Texas families about the improved coverage and more family-friendly cost sharing will be essential to rebuilding the Texas CHIP program. If enrollment does not recover, Texas will miss out on an estimated $370 million in federal matching funds for the 2006-2007 biennium. Texas receives $2.65 in federal matching funds for every $1 of State funds invested in CHIP.

In addition, the Legislature did not allocate enough revenue to allow CHIP to grow back to 2003 levels. The Legislature provided funding for only about 24,000 additional children to be covered, yet CHIP enrollment declined by over 180,000 children since cuts took effect on September 1, 2003. It will be critically important to ensure that this provision is implemented and that CHIP eligible children are enrolled without a waiting list or benefit reductions throughout the 2006-2007 biennium.

According to 2003 U.S. Census data, Texas currently has the highest rate of uninsured children in the nation, with 21.6% of children lacking coverage. Nearly 90% of uninsured children have at least one working parent.

Restorations that were not achieved include:

· A final push for 12 months continuous eligibility, led by Senator Kip Averitt and passed by the Texas Senate, did not succeed, and 6 month coverage was made permanent in SB 1863.

· A 90-day wait for coverage remains in place for children who enroll in CHIP, including newborns.

· Income offsets for work-related expenses were not removed.

· A CHIP asset test remains in place, preventing families with more than $5,000 in assets from qualifying for CHIP. Assets include cash, checking and savings accounts and certain vehicle values.

· Provider rate cuts remain in place, making it more difficult for CHIP health plans to recruit and retain providers.

· Funding is not adequate to restore CHIP enrollment to pre-September 1, 2003 levels.

New CHIP Perinatal


A last-minute addition to the budget creates new CHIP coverage of prenatal care and maternity services for women whose children, when born, would be under 200% of poverty and qualify for CHIP or Medicaid. HHSC estimates that coverage of these "perinates" will increase the CHIP rolls in FY 2007 by almost 48,000, most of whom under current rules would have been eligible for Medicaid as newborns.

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