Dallas Morning News
State expects flat growth for Children's Health Insurance Program
By: Robert Garrett

August 11, 2008

AUSTIN — Officials haven’t requested much new money in the upcoming state budget for the program that insures children from working-poor families because they predict it will barely grow, even as the economy sours and the state population swells.

Advocates for low-income families, though, are skeptical that there will be little or no enrollment growth in the Children’s Health Insurance Program.

“I’m surprised they think it’s going to slow down that much,” said Anne Dunkelberg, associate director of the Center for Public Policy Priorities, a progressive think tank.

Though the biggest effects of last year’s CHIP expansion bill already have been felt, Ms. Dunkelberg, a former state Medicaid official, said, “You would expect continued, slow growth. You would not expect a flat plateau.”

CHIP has been a focal point of recent state and national debates over how much government should try to expand health coverage, with Democrats saying children should have first claim on available resources and Republicans warning that an expanded CHIP could be a giant step toward government-run health care.

Last year, President Bush twice vetoed bills to add 4 million children to the program, which now covers 6.6 million nationwide. He called it “a step toward federalization of health care.”

But fights over how much to spend are sure to erupt next year as an extension of federal authorization expires and the Texas Legislature comes back into session.

Though enrollment in Texas soared to nearly 477,000 this month, from 300,000 a year ago, the state Health and Human Services Commission says it believes growth will slow to a crawl.

Commission researchers expect it to average between 480,000 and 486,000 in each of the next three years, said commission spokeswoman Stephanie Goodman.

They project enrollment, from this month’s level, to grow by less than 1 percent next year; and 0.7 percent and 1.4 percent, respectively, in fiscal 2010 and 2011.

“We’ll see a settling out,” Ms. Goodman said.

The news is painful for advocates for low-income families, doctors and hospital executives, who have spent four years arguing that CHIP rolls should again exceed 500,000, as they did before state budget cuts in 2003.

And if Texas feels the national economic slowdown, there is reason to believe that demand for CHIP could exceed official projections.

In California, reeling from a real estate slump, CHIP enrollment has jumped by 4 percent, to 877,000, from January to June. Applications in the past six months are up 6 percent, said Jean Ross, who heads the California Budget Project, a liberal policy analysis group.

Ms. Goodman defended the Texas forecast, saying the state’s economy is better than those in many other states, with unemployment relatively low.

She said the CHIP rolls quickly grow when the state economy cools. They are such a good indicator of changing times that commission researchers no longer look at other economic statistics, Ms. Goodman said.
The other data, she said, tends “to insert error, not stability, into the forecast.”

CHIP shed more than 180,000 youngsters after the budget cuts five years ago, then sloughed off some 35,000 more because of problems with an outsourcing of eligibility screening in late 2005 and early 2006.

Last year, a coalition of Democrats and Republicans in the Legislature passed an expansion bill. Waiting periods and asset limits were eased and an income deduction for child-care expenses was restored. The big change, though, was returning to the program’s original 12-month terms of coverage. The coverage terms had been only six months since early 2004.

Ms. Goodman said the biggest effects of the return to 12-month coverage were felt in March, when enrollment jumped by 24,000 and this month, when the rolls increased by nearly 13,000 youngsters.
The commission’s researchers believe that next month, “we may even see a decline,” she said.

Though Gov. Rick Perry and the Legislative Budget Board, a group of 10 influential lawmakers who track the budget, have asked agencies to aim at little growth in their budgets, Ms. Goodman said there had been no attempt to make CHIP enrollment forecasts fit available dollars.

“We have no motivation to low ball because we’d just end up in a budget mess,” she said.

CHIP spent $921 million in the last two-year budget cycle and is on target to cost $2.1 billion in the current cycle, which ends next August. Part of the increase was caused by the addition of some pregnant women and their infants in early 2007.

Ms. Goodman said costs would rise to $2.5 billion in the next two-year cycle. Of that, state funds would make up about $700 million — up from $600 million in the current cycle, she said.

Ms. Dunkelberg said there are plenty of eligible but unenrolled children, even if the economy doesn’t head south.

The commission, she said, has estimated “there are 200,000 to 300,000 uninsured kids out there — uninsured but in the CHIP income range,” though not enrolled. A family of four earning less than $42,400 is eligible.

“We’re going to be looking for some assurances that if [enrollment] doesn’t slow down that much, the program will still be funded and kids will still be able to enroll,” she said.