Increased Enrollment Complicates Fiscal Situation for Texas’ CHIP Program

Increased enrollment in Texas' CHIP program over the past year has left the plan "strapped for cash," and some hospitals have indicated that unless the state addresses the situation, they no longer will be able to participate in the program, the Ft. Worth Star-Telegram reports. The program faces a "potential" $20.2 million budget deficit in the next fiscal year, in part because of its recent "enormous success" in enrolling children, the Star-Telegram reports. One year ago, the state "poured ... millions of dollars" into CHIP "outreach efforts," after critics said the program was reaching "less than half" of the children it was supposed to; at the time, officials estimated 450,000 children were eligible for the program. Now 510,000 are enrolled, a number that has "surprised everyone, including the Texas health and human services commissioner, advocacy groups, the governor's office and children's hospitals statewide." Anne Dunkelberg, of the Austin-based Center for Public Policy Priorities, said, "We all hoped and dreamed that [the CHIP program] would be enormously successful, and it exceeded all our expectations. ... Frankly, all of us -- everyone -- expected enrollment to slow down."

What to Do?
To keep the program viable, the state could cap or freeze enrollment or shorten the enrollment period from one year to six months, the Star-Telegram reports. Advocates also have suggested using more money from the state's share of the national tobacco settlement, which now funds the program. But state officials say they need to study the program more before implementing any such changes. Charles Stuart, spokesperson for the state's Health and Human Services Commission, which administers the program, said, "It's too early to say which options are valid. There have been no changes to the program and, at this point, we're not contemplating changes." But if the state fails to take action soon, some of the state's hospitals might end their participation in the program (Brooks, Ft. Worth Star-Telegram, 2/4). Many hospitals in Texas, including the Houston-based Texas Children's Hospital, operate health plans that cover CHIP beneficiaries. Last summer, Texas Children's Hospital officials told the state that the facility would have to end its participation in the program unless the state raised premium rates (Kaiser Daily Health Policy Report, 8/24/01). Other hospitals, such as the Ft. Worth-based Cook Children's Medical Center and the Corpus Christi-based Driscoll Children's Hospital, also have said that they are losing money by participating in the program (Brooks, Ft. Worth Star-Telegram, 2/4).