Now, as a result of the policy change, families of lower-income state workers who have struggled to pay for family coverage can qualify for the program. CHIP, which is jointly financed by the states and the federal government, provides coverage to the uninsured children of families who earn too much to qualify for Medicaid but cannot afford private insurance.
The federal government had closed that option to most states when CHIP was established in 1997, because of concerns that it might be an easy way for financially strapped states to shift the costs of some public-employee health benefits to the federal government. Federal employees were allowed to enroll their children.
“State employees shouldn’t be the only people in the country who cannot access the program,” said Steven Kreisberg, director of collective bargaining and health-care policy at the American Federation of State, County and Municipal Employees. In an era of frozen wages, pay cuts and furloughs for state employees, the ability to participate in CHIP is critical for families, he said.
States must show that they have not cut their share of employee health insurance costs in an effort to push their workers’ children to CHIP and that the cost of the coverage available to employees is a financial hardship for families.
Tricia Brooks, a senior fellow at the Georgetown University Center for Children and Families, said the federal matching funds that will flow to the states are a plus but are not the primary reason states pursued the policy change.
“I think the intent was much more motivated by the fact that there were children who were being discriminated against,” she said.
Georgia, which is awaiting final federal approval for the program, is the latest state to offer its lower-income workers the CHIP option — known as PeachCare for Kids. The Centers for Medicare and Medicaid Services has given the nod to plans in Alabama, Kentucky, Montana, Pennsylvania and Texas.
Georgia’s open enrollment period began last month, and officials expect 42,000 children to switch to PeachCare, for a total state savings of $32 million in fiscal 2012. That would give Georgia, out of the six states, the highest number of state employees’ children enrolled in CHIP.
Leigha Basini, a program manager at the National Academy for State Health Policy who works with state CHIP directors, said states are enthusiastic about the option because of the potential savings and the chance to expand coverage to more kids.
“It potentially is a win-win for the states and the employees,” she said.
In each state, the number of employees eligible for the coverage will be affected by the income ceiling the state sets — in Georgia, it is $52,500 for a family of four — and how much workers are paid.