Senator Eliot Shapleigh - El Paso, Texas

Before the dust had settled over reauthorization of the Children’s Health Insurance Program, some Republicans in Congress were grousing about messiness in its passage. But surely providing healthcare coverage to millions more uninsured children constitutes progress worth making.

The measure that President Barack Obama signed into law Wednesday had more in it than a version that President Bush had vetoed twice despite the bipartisan compromise that produced it. But the additions certainly weren’t enough to turn good legislation into bad law.

In fact, the law includes some key provisions that Republicans had insisted on.

More important, it’s a good-government investment that will improve kids’ health and save taxpayers money in the long run by encouraging timely and preventive medical care and less reliance on expensive emergency services.

What does the law provide?

Health insurance, through a state-federal partnership, for children whose families make too much to qualify for Medicaid but not enough to afford private coverage.

In Texas, Medicaid is available to families with annual income less than $17,600 for a family of three in 2008 (the limit goes up to $18,310 March 1) which is the federal poverty level.

The average cost of family health insurance is about $12,000 a year, which many low- and moderate-income workers can’t afford, even with employer subsidies, the Austin-based Center for Public Policy Priorities said.

CHIP covers about 6.6 million children nationwide, and the expansion would enable states to add 4 million, at a cost of about $32.8 billion over five years.

Texas’ 2009 allocation increases from $549.6 million to $945.6 million, which is based on state enrollment reports and projections, according to CPPP. But how much Texas actually receives depends on the amount the Legislature appropriates. Of every dollar spent on CHIP, 72 cents comes from the federal government and 28 from the state.

How will the federal share be paid for?

A 61-cent increase in the federal tobacco tax. That’s not an ideal funding mechanism, for sure. If it reduces smoking, there’s less money for CHIP — though if it reduces smoking, that’s not a bad thing for other reasons. When the law expires in five years, Congress will need to find a more reliable long-term funding source.

What are other details of the expansion?

It requires states to cover dental care. Mental health coverage is optional but, if provided, must be at the same level as medical benefits.

States that expanded to include parents and childless adults must transition them off CHIP; programs will no longer be allowed to cover adults except for pregnant women.

States have the option to enroll legal immigrants who have lived in the United States less than five years. This new provision created strenuous opposition. But the law specifically states that illegal immigrants aren’t eligible for CHIP.

Why were there objections?

Besides the provision on legal immigrants, some Republicans claim the program encourages families to sign up for government insurance when they could afford private coverage.

To discourage what is known as crowd-out, the law provides a lower federal match (equal to Medicaid) for states that cover families making more than 300 percent of the poverty limit ($54,930 for a family of three). However, New Jersey and New York are allowed to continue higher-income programs at CHIP matching levels.

The law does make it easier for states to help CHIP-eligible families pay their private-insurance premiums to keep them on those plans, an alternative that could cost taxpayers less than moving those children to CHIP.

Texas and 32 other states set eligibility limits between 200 percent and 250 percent of the poverty limit, according to the Kaiser Commission on Medicaid and the Uninsured. Texas’ limit is 200 percent ($36,620 for a family of three), and families on the upper end of that scale pay an annual premium of $35-$50, plus co-pays for prescriptions and services such as ER visits and hospital stays.

What should the Legislature do now?

Almost 451,000 Texas children are enrolled in CHIP, including more than 32,000 in Tarrant County, and CPPP estimates that more than 175,000 other uninsured children in the state qualify for coverage. Outreach groups have tried to rebuild participation that dropped during a period when Texas required re-enrollment every six months instead of annually. Expansion also is complicated because reimbursement rates discourage many physicians from accepting CHIP patients.

Texas should allocate enough money to take advantage of the federal expansion. The state Senate’s base budget would increase CHIP funding from $2 billion to $2.3 billion for the 2010-11 biennium (almost $756 million from the state, matched by almost $1.58 billion in federal money).

This state has too often left millions of federal money on the table by not putting up enough in state funds. Yes, the state budget is tight and many wishes will have to wait. But how can ensuring that more Texas children are healthy not make the top of the list?