Texas SCHIP cuts seen as harbinger

Support for public coverage for children remains strong, but state and federal governments are having difficulty keeping up the financing.

By Joel B. Finkelstein, AMNews staff. Aug. 23/30, 2004.

Washington -- Since it was created in 1997, the State Children's Health Insurance Program has been popular with patients, physicians and politicians alike. But for the first time, the program's future seems in doubt.

Some experts worry that program cutbacks in Texas offer a glimpse of what could happen in other states as they struggle to make ends meet during tough fiscal times. Texas launched its SCHIP plan in 1999 and quickly enrolled almost a half-million kids with the help of a streamlined application process and aggressive outreach. Despite that success, or perhaps because of it, the Texas Legislature passed sweeping changes to the program last year.

"It appears that the changes to SCHIP eligibility and enrollment in the Legislature were designed to reduce enrollment in SCHIP and thus the state budget," said Richard Wayne, MD, of Christus Santa Rosa Children's Hospital in San Antonio.

Those adjustments include switching from 12 months of continuous coverage to six months, higher premiums and co-pays, a 90-day waiting period, and a new asset test for families above 150% of the federal poverty level. Lawmakers also eliminated the program's dental and vision coverage and halved mental health benefits.

The state expects to save $1.6 billion in 2004 and 2005 from the combined cuts to Medicaid and SCHIP, and more than 100,000 children ultimately could be dropped from the SCHIP rolls, said Anne Dunkelberg, a senior policy analyst with the Center for Public Policy Priorities in Austin, Texas.