For Most Part, CHIP Dodges Budget Ax

Though the State Children's Health Insurance Program managed to avoid cuts in fiscal year 2002, strains are beginning to show that may mean beneficiaries will face copayments for medications.

An Urban Institute report indicates that CHIP did remarkably well in fiscal year 2002, despite state budget deficits and growing enrollment.

That report, aptly titled "SCHIP Dodges the First Budget Ax," looks at the ups and downs of programs in 13 states that account for 64 percent of total CHIP enrollment, and finds that none cut benefits packages this year, though five are either considering or have already imposed increased cost sharing.

In Texas, for instance, the lowest-income families (those below the poverty level) are now charged $3 for an ER visit and $3 for each brand-name prescription.

"Copayments rise by income level to the point where the highest income families (186–200 percent of poverty) now pay $50 per ER visit and $20 per brand-name prescription, in contrast to previous levels of $35 and $10" respectively, the report notes.

Alabama, Massachusetts, New Jersey, and Washington are considering imposing higher copayments. (The report also tracks programs in California, Colorado, Florida, Michigan, Minnesota, Mississippi, New York, and Wisconsin.)

Despite some problems, CHIP fared well. Some reasons being cited are that the program is widely viewed as successfully addressing a vital need; is not seen as overly costly, especially compared to Medicaid; and draws a large amount of matching federal funds, making it difficult to justify program cuts.

Still, whether CHIP can continue to hold its own is questionable. The report notes: "No governor or legislator wants to cut a program that explicitly serves children, especially during an election year." That will be a moot point after this month.

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