Children in Texas now qualify for the Children's Health Insurance Program if their families earn up to 200 percent of the federal poverty level. That's $42,400 for a family of four.

The federal legislation passed Wednesday by the U.S. House makes it clear that states can expand their programs to 300 percent of the poverty level, or $63,600 for a family of four, said Anne Dunkelberg, associate director of the Center for Public Policy Priorities, an advocacy group for low- and middle-income Texans.

In Texas, that could mean adding 160,000 children to CHIP's current roll of more than 450,000 at a cost of about $100 million in state money, according to an estimate by the Health and Human Services Commission. Such a change would require legislative action.

The federal legislation also gives states strong incentives for reaching children who are eligible for — but not enrolled in — CHIP or Medicaid, Dunkelberg said. There are about 700,000 to 800,000 such children in Texas — about half of the state's uninsured children — she said.

"If we knew who they were, we'd enroll them now," said Stephanie Goodman of the state's Health and Human Services Commission. She said the state is already trying to reach eligible families through media campaigns and by working with school districts but that it's "one of those areas where you can always do more with more resources."

Texas already covers legal permanent residents under CHIP using only state money, Goodman said. The state expects to cover about 20,000 of those legal immigrant children this year at a cost of $33.3 million, she said.

John Hawkins, senior vice president of the Texas Hospital Association, said his group supports expansion of the insurance program and that given the economic downturn, "any help we can get from D.C. is going to be good."