06:45 AM CDT on Friday, April 27, 2007

This month, the Texas House passed by a landslide a bill that would reform the Children's Health Insurance Program. HB 109 would allow children to re-apply for CHIP only once a year instead of twice, eliminate a 90-day waiting period for coverage and let families deduct child care expenses when determining their eligibility.

This is a huge win for Texas children, taxpayers and business operators. But this win is still at risk in the Texas Senate.

The state's business community is suffering from dramatically escalating health care costs. A significant part of that is due to the rather backward, ineffective and costly way Texas approaches indigent health care and, in particular, our 1.4 million uninsured children.

As a businessman and taxpayer, I find it disconcerting to learn that Texas has returned more than $900 million in federal matching funds because the state did not utilize these funds for children's health care. The federal match was $2.64 for every $1 the state put up, but the state did not put up. Keep in mind that this $900 million was originally from Texas taxpayers, and the $900 million ended up subsidizing children's health care in other states to the benefit of our competitors.

When children lose CHIP and Medicaid coverage and end up in emergency rooms for care, health care costs increase for all of us. A preventive care visit for juvenile diabetes costs $42 compared with an inpatient stay of $6,700. Chronic asthma can be managed in a doctor's office for $100, but a three-day hospitalization for a serious attack costs $7,300.

Crisis care also puts additional strain on overcrowded emergency rooms, already on divert status more than 30 percent of the time. On the flip side, Texas Children's Hospital notes a 40 percent reduction in health care costs after 12 months of continuous preventive coverage.

Beyond that, Texas businesses must address the impact of the uninsured on economic development. We must be competitive. Access to affordable health coverage is critical in recruiting businesses and talent to Texas. Why would an employer relocate to Texas and face higher health care costs, excessive emergency room use and burdensome property taxes?

It doesn't have to be this way. Simply put, CHIP makes good business sense. It provides low-cost, preventive health coverage to uninsured children of the working poor. These families cannot afford private health insurance – which costs $900 a month, according to the Texas Department of Insurance – but they can afford CHIP. CHIP costs just $40 a month in state funds per child. Texas needs to expand the program.

At the same time, Texas owes business operators and taxpayers a more cost-effective administration. The state recently terminated a $899 million deal with a private-sector contractor because it could not keep up with the paperwork involved in the disastrous six-month CHIP renewal process.

Tens of thousands of qualified kids were denied coverage because of excessive administrative errors and omissions. Tens of millions in federal matching funds were subsequently lost. It would be far more cost-effective to cut the paperwork in half and return to the successful 12-month policy that is now employed by our competitors in 40 other states.

Over the past six months, the chambers of commerce of the eight largest cities (the Metro 8) came together to address these issues. They made a unanimous recommendation: Let's fully restore CHIP and maximize the use of federal matching funds. Let's avoid false economy and get cost-effective. Let's use preventive care instead of crisis care. And let's make Texas businesses more competitive.

The House bill was a great first step. Now the bill is on to the Senate for approval.

Let's hope that the Senate does the right thing and fully restores CHIP. It's the right thing to do for Texas children, businesses and taxpayers.

Lan Bensten [sic] is co-founder of a Texas-based international oil and gas company and a member of the Children's Defense Fund Texas Advisory Board. His e-mail address is txboard@childrensdefense.org.