Vol. 6, No. 3 May/June 1998	Previous Issues Subscribe to AT Messenger Download PDF Viewer
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Financing Assistive Technology

New Public Health Insurance Program for Uninsured Children

Ron Sibert, DATI Funding Specialist

Health insurance remains far and away the most frequently tapped source of assistive technology (AT) funding. However, for thousands of Delaware’s children who remain uninsured, options may be quite limited. According to the U.S. Census Bureau, approximately 10 million children in the nation are without health insurance. The same agency estimates that 24,000 of those children reside in Delaware. Local estimates suggest that the number is closer to 10,500. In any case, it’s safe to assume that a significant number of children in Delaware are without health insurance.

The Balanced Budget Act of 1997 [P.L. 105-33, Subtitle J] created a new children’s health insurance program under Title XXI of the Social Security Act. This new amendment enables states to initiate and expand health insurance coverage for uninsured, low-income children. Following the Governor’s lead, Delaware’s Medicaid administrators and Health Care Commission are currently exploring our State’s participation in this program. The State’s proposal must be filed with the Health Care Financing Administration (HCFA) by July 1, 1998. If HCFA approves the plan, Delaware will have a new public health insurance program for its low-income uninsured children before year-end.

The law gives states several choices when defining their new programs. First, as with Medicaid, the State must choose whether to participate in the Title XXI program at all and, if so, it must submit a State Child Health Plan to the Federal Government for approval by the Secretary of Health and Social Services. The plan must include eligibility standards, descriptions of outreach activities, and methods of assuring quality and appropriateness of care as well as access to covered services. Also note that eligibility may not be denied on the basis of a child having a pre-existing condition.[1]

States are permitted to expand coverage for uninsured children in one of three ways:

1. States may expand coverage through the existing Medicaid program. This new option for States would be available for children who would not have qualified for Medicaid under State rules in effect as of April 15, 1997.
2. States may use their available Title XXI funds to establish or expand a separate child health insurance program. Delaware Medicaid is exploring this option currently. Under this option, states must establish enrollment systems that are coordinated with Medicaid and other sources of health coverage for children and also must screen children during the application process to determine if they are eligible for Medicaid. If they are, these children must be enrolled promptly in Medicaid.
3. States may use a combination of the above two options. For example, a State may cover children whose family incomes are at or below 133% of the federal poverty level through Medicaid and a targeted group of children above that level through a separate program. For the children the State chooses to cover under Medicaid, the description provided under “Option to Expand Medicaid” would apply. Similarly, for children the State chooses to cover under a separate program, the provisions outlined above in “Option to Create or Expand a Separate Program” would apply.[2]

As is true of the Medicaid program, a federal match is offered to states as an incentive for participation in the Title XXI program. For qualifying expenditures, states will receive an “enhanced” federal matching rate that is equal to its the current federal medical assistance (Medicaid) match plus 30 percent of the difference between its regular matching rate and 100 percent. However, the maximum enhanced federal match is 85 percent. For example, in Delaware, the difference between our regular match (50%) and 100% is 50%. Thirty percent of that difference is 15%. So, the enhanced federal match for Delaware is 50% + 15%, or 65%. Therefore, the Federal Government will give back to Delaware 65 cents for every dollar it spends on this program once it is established. The federal grant to states is $24 billion, and Delaware’s allotment would be about $41 million. The State Health Care Commission’s projections say that Delaware would receive $8.5 million annually from 1998 - 2001, and $6.7 million for the year 2002; they expect the State match to be about $3 million annually.

While Title XXI and Medicaid (Title XIX) share similarities (like match funding), they are also quite different. Medicaid is an entitlement to individuals; Title XXI is not. It is a block grant—sort of an entitlement to states—to establish a special program. Under Title XXI, states are free to charge premiums to recover costs and to determine how, for whom and when to implement the program. In addition, Title XXI funds may not be used for children who are: a) eligible for Medicaid or other health insurance coverage; b) inmates of a public institution; c) patients in an institution for mental diseases; or d) in families who are eligible for coverage under a state health benefits plan because of a family member’s employment with a public agency in the state.

In conjunction with the new State child health insurance program, the Balanced Budget Act included three new provisions designed to increase children’s health care coverage through the Medicaid program:

1. Presumptive eligibility for children: Under this provision, states now have the option of establishing a presumptive Medicaid eligibility procedure to facilitate the enrollment of children. Certain qualified entities may enroll children in Medicaid on a temporary basis, relying on information supplied by the family on income levels. This can be a particularly useful tool for reaching children who are not receiving welfare and whose parents are employed at low-wage jobs that do not offer health insurance coverage.
2. Coverage of SSI Children: States also are now required to continue Medicaid coverage for all disabled children who were receiving SSI on August 22, 1996 but who lost their Medicaid eligibility as a result of last year’s law restricting the SSI child disability standards. (See Daniel Atkins’ description of the Community Legal Aid Society’s Children’s SSI Project in the March/April ‘98 edition of The AT Messenger, pgs. 6 & 7.)
3. 12 Month Continuous Eligibility: States now have the option to guarantee 12 months of coverage to children enrolled in Medicaid regardless of whether the child experiences changes in family income or other circumstances that would render him/her ineligible for Medicaid during that 12 month period.[3]

A very encouraging component of Title XXI is the crucial role the public can and should play in defining, shaping and even modifying the plan after it has been established. The law requires that State Plans describe the process used to involve the public in their design and implementation—and the method for insuring ongoing public involvement. In Delaware, public hearings to discuss plan development are already being conducted by the office of the Insurance Commissioner. Watch for additional opportunities and let your voice be heard.

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[1] Bergman, Allan I., Memo to UCP Affiliate Executive Directors, Statewide Advocacy Needed for Implementation of the New State Children’s Health Insurance Program, August 8, 1997.

[2] Website of the Health Care Financing Administration at the following URL: http://www.hcfa.gov/init/schiplt3.htm

[3] Ibid - HCFA website