Bush Administration ‘Poised’ To Approve California’s Waiver To Insure Parents of Children in CHIP

The Bush administration is set to approve a California plan that would extend health coverage to 300,000 low-income parents through Healthy Families, the state's CHIP program, the Los Angeles Times reports. Administration sources said that HHS Secretary Tommy Thompson plans to announce the approval formally during a Jan. 25 trip to Southern California. Through Healthy Families and Medi-Cal, the state's Medicaid program, California currently provides coverage for about one million children in families with annual incomes of up to 250% of the federal poverty level, or $44,125 a year for a family of four. The federal waiver would allow the state to cover parents with annual incomes of up to 200% of the poverty level, or $35,300 for a family of four. Enrolled parents would receive benefits similar to those offered to children in Healthy Families, with monthly premiums ranging from $10 to $20 (Garvey/Ornstein, Los Angeles Times, 1/24). Premiums for children of enrolled parents would range from $14 to $18 per month (Russell/Salladay, San Francisco Chronicle, 1/24). Advocates have said that extending coverage to parents will make them more likely to enroll their children as well. California has 1.85 million uninsured children. If approved, the plan would represent the largest coverage expansion to adults through CHIP in the nation. "If [the approval] is true, it is very good news," Sen. Dianne Feinstein (D-Ca.) said.

Between a Budget Deficit and Federal Dollars
The expected approval comes more than one year after California applied for the waiver in December 2000, an interval during which the state has gone from running a budget surplus to having a projected $12.4 billion shortfall. Hoping to ease that deficit, Gov. Gray Davis (D) proposed delaying the expansion until 2003, in an effort to save the state a $54.3 million in the current fiscal year and $160.5 million in the following one. However, because Healthy Families is funded through state funds matched by the federal government at a two-to-one rate, the implementation delay would cost the state $430 million in matching funds over two years. The Times reports that the waiver's approval would place Davis in a "tough spot," because as recently as Jan. 23, many lawmakers and advocates urged him to implement the expansion this year. "The Davis administration can't say that the feds are presenting any barrier," Amy Dominguez-Arms, vice president of Children Now, said, referring to frequent complaints by Davis officials about HHS' delay in approving the waiver. "We would be able to do this now but for the fact the governor is saying, 'Let's delay it,'" she added (Los Angeles Times, 1/24). State Senate President Pro Tem John Burton (D), said, "I think it's good. Now, we have to figure out ... how we pay for it" (San Francisco Chronicle, 1/24). Still, Davis spokesperson Hilary McLean indicated that the governor will continue to support delaying the expansion until next year. Davis' "proposal is not to walk away from this (expansion), but it's certainly to follow through on the commitment to expand Healthy Families when we have the resources to do so," she said (Los Angeles Times, 1/24).