Texas to lose over $760 million

Over 169,000 children across Texas will no longer be eligible for health insurance coverage by 2005 as a result of changes to the Childrens Health Insurance Program (CHIP) made by the 78th Texas Legislature. These enrollment cuts will mean a loss of over $760 million in state and federal funds. In addition, more than 500,000 Texas children in CHIP lost dental, vision, hospice and most mental health services as of Sept. 1, 2003. Local officials and health care providers are concerned about the impact of the cuts and that the cost of health care will be shifted to cities and counties already facing severe budget shortfalls. Counties in Texas, regardless of size, will lose state and federal funding. McCulloch County will lose $507,414 and Mason will lose $185,199. “By changing the eligibility criteria, the state will lose $550 million in federal matching funds alone for CHIP over the next two years,” said Bexar County Judge Nelson Wolff. “These cuts to CHIP and Medicaid will throw our hospital district into a projected $25 million deficit. That’s not good for our kids or our hospitals.” Pattie Everitt, Executive Director of the Children’s Defense Fund of Texas, stated that the changes are unprecedented. “One- third of the children currently enrolled in CHIP will lose their coverage by 2005. No other state has made such drastic changes to its CHIP program or provides such a limited benefit to children receiving CHIP,” she said. “Removing 169,000 children from coverage and eliminating critical benefits will set Texas even further behind other states.” Local community organizations will struggle to meet the needs of working families who lose benefits through CHIP. Of particular concern are cuts to children’s mental health services. All but the most minimal mental health benefits have been eliminated from the Texas CHIP plan. All 500,000 children enrolled will no longer receive evaluation, treatment and therapy after a crisis, or counseling and early intervention to prevent serious illness. Mental health organizations and providers, also struggling with significant budget cuts, will have difficulty absorbing the children who lose counseling and therapy services under CHIP. Although 57,000 children used the CHIP mental health benefit from May, 2001 to December, 2002, the Mental Health and Mental Retardation Authority’Texas’ primary mental health provider’currently only serves 38,000 children and cannot handle increased case loads. “Children who are not able to access mental health services through CHIP will likely surface in less appropriate, more costly places such as the juvenile justice system and emergency rooms,” said Lynn Lasky, president and CEO of Mental Health Association of Texas. Cuts scheduled to take effect over the next several months, are as follows: ‘ Effective August 31, dental, vision, hospice and most mental health benefits were eliminated from the CHIP benefits package. ‘ Effective Sept. 1, CHIP coverage was reduced from 12 to six months of eligibility. ‘ Effective Oct. 1, children will have to have 90 days after being declared eligible for CHIP in order to receive coverage. ‘ Effective Nov. 1, CHIP co-pays and premiums will increase. ‘ Effective Nov. 1, the following costs will no longer be considered in determining a child’s eligibility for coverage: $120 deduction for work-related expenses, childcare and disabled adult care expenses, child support and alimony payments. ‘ A new CHIP assets test will also be implemented for individuals earning above 150% of poverty, preventing individuals with more than $5,000 in assets in qualifying for CHIP, and a vehicle assets test that is more restrictive than that of Children’s Medicaid. As a result of these changes, an estimated 169,000 children’more than a third of the current caseload’will no longer be eligible for CHIP coverage by 2005. Health advocates point out that despite the cuts, CHIP coverage is still critical to thousands of Texas children and will continue to cover doctor visits, immunizations, prescriptions, hospital care and most needed medical services at an affordable rate. For more information, visit the Children’s Defense Fund of Texas website at www.cdftexas.org.

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