Feds may pay for All Kids
WASHINGTON – Alabama's All Kids health insurance program, which covers about 84,000 lower-income children, would be paid for entirely by the federal government under a little-known provision of the Affordable Care Act.
The 2010 health care law ordered a 23-percentage point increase in the federal matching rate for children's health insurance programs, or CHIP, in each state. So if Congress renews CHIP funding — which expires in the fall of 2015 — Alabama could save more than $45 million a year.
Alabama now pays for about 22 percent of the program, which is for children in families that earn too much to qualify for Medicaid but not enough to afford private insurance. In Alabama, about 84,000 children are enrolled in the program, although about 23,000 were moved to Medicaid earlier this year under a different provision of the Affordable Care Act.
Cathy Caldwell, director of All Kids, said Congress should act before federal funding for CHIP expires at the end of fiscal 2015.
"We need a timely extension of CHIP funding," she said. The looming expiration "is already causing anxiety in states and families."
The Alabama Legislature has allotted $47.6 million for the children's health insurance program in next year's state budget.
State Sen. Cam Ward, R-Alabaster, said All Kids is worthwhile, even with the state match.
"So if it costs my state no money, I'm all for that. That's a no-brainer," Ward said Tuesday. "There is a gap there that All Kids filled. And the overall expense, even when we pay our share, wasn't that great."
Nationally, 5.7 million children are enrolled in CHIP programs, which are widely credited with helping lower the uninsured rate among children from 14 percent in 1997 to 7 percent in 2012.
In Alabama, where All Kids was once a national leader in finding and enrolling eligible children, the number of children without health insurance dropped from more than 20 percent to 7 percent over the same period, Caldwell said. But Alabama's rate increased slightly, by less than one percent, since the state tightened its budget and stopped paying for aggressive enrollment outreach two years ago, Caldwell said.
"We have lost a little bit of ground, and I hate to say that," she said.
In order for children under 19 to qualify for All Kids, their families must earn less than 300 percent of the federal poverty level — about $75,000 for a family of four.
Renewing federal funding for CHIP likely will be controversial on Capitol Hill, in part because the health insurance landscape has changed so dramatically since it was last renewed in 2009. But even with the new online marketplaces created by the Affordable Care Act, which allow people to qualify for federal subsidies and comparison shop for private insurance, CHIP advocates say there is still a role for a separate government program for lower-income children.
A preliminary analysis by the Georgetown University Center for Children and Families says many children now on CHIP would become uninsured — including about 1.8 million in Texas, New York and Florida — if Congress doesn't renew funding.
Caldwell said the insurance plans offered on the marketplaces are designed for adults, not kids, and not all plans guarantee that children's hospitals and pediatric providers are included in the coverage. She also said the out-of-pocket costs to parents who buy plans through the marketplaces are greater than under All Kids.
The marketplaces may be a good option for children in the future, "but not now," she said.
Contact Mary Troyan at mtroyan@usatoday.com