The Department of Health and Human Services has given approval to nine states to participate in the Children's Health Insurance Program. The program, part of the Balanced Budget Act of 1997, sets aside $24 billion over five years for states to expand health coverage for kids.
CHIP grants coverage to uninsured children whose families earn too much for Medicaid but too little to afford private coverage. More than 10 million American children — one in seven — are uninsured.
The program allows states three options: designing a new children's health insurance program, expanding current Medicaid programs or a combination of both. States may create new programs through one of three benchmark plans: the Blue Cross/Blue Shield preferred-provider organization offered by the Federal Employees Health Benefit Program, a health plan offered by the state to its employees or the HMO with the largest commercial enrollment in the state. Allocation of matching funds is based on each state's number of uninsured low-income children and regional cost differences.
As of last month, the department had approved plans in Alabama, California, Colorado, Florida, Illinois, Michigan, New York, Ohio and South Carolina. States must use this new money to cover uninsured children, not to replace existing coverage.
Fifteen other states and Puerto Rico have submitted plans to HHS. Those approved by Sept. 30 are eligible to receive some of the $4.3 billion allotted for this fiscal year.