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Low income children would lose health insurance coverage program.

February 26, 2003
By: Sara Bondioli
State Capital Bureau

JEFFERSON CITY - In an action the governor called "morally wrong," a House appropriations committe voted to eliminate the Children's Health Insurance Program (CHIP), which provides coverage to about 80,000 Missouri children. The House Health and Social Services Appropriations Committee approved the cut Wednesday.

CHIP was established in 1998 to provide health insurance coverage to children of families with incomes 186 to 300 percent above the poverty level. Last year the program was renewed for five years. Cutting CHIP would save the state $29 million of general revenue.

In a press conference Wednesday morning, Gov. Bob Holden and a number of Democrats said the cuts sacrifice children in the state.

"This is morally wrong. These children are not a line item in the budget," Holden said.

Rep. Chuck Purgason, R-Caulfield and chairman of the social services appropriations committee, responded to the governor's comment.

"If that's immoral, I think it's immoral that he gives us a budget that's not balanced and is only balanced on tax revenues that haven't passed yet," he said.

House Speaker Catherine Hanaway, R-St. Louis County, said the measure was necessary because of the budget shortfall.

"I'm not sure in very tough economic times that we can be the insurance company for all those people," she said.

The cut would place Missouri back at the federally required level for Medicaid coverage. Currently, Missouri families earning up to 300 percent of the poverty level -- $55,200 per year -- are eligible for coverage.

"Elimination of this program in Missouri makes no budgetary sense, makes no economic sense; it makes no moral sense," Holden said. "This simply will not pass on my watch as governor of the state of Missouri."

Holden didn't identify any alternative cuts he would make but stood by his plan of tax increases. He also did not answer questions about whether he would accept a decrease in the percentage over poverty level that qualifies a child for the program.

Purgason said CHIP offers state money to families that can afford insurance on their own. He said he would be eligible for the program six months from now if he dropped his state health insurance coverage today.

Rep. Vicky Riback Wilson, D-Columbia, said the program has provisions to ensure those who enter the program don't have any better options.

"If he has access to [state coverage] or can get private insurance more cheaply, he wouldn't be eligible," Wilson said of Purgason.

Wilson said premium costs for families in the upper level of the CHIP program are often higher than those available through state employee coverage, making the CHIP program a bad option for many eligible higher income families.

Chris Rackers, associate director for the Department of Social Services, said families must show evidence that they have looked at other insurance plans as an option before they can join CHIP.

Purgason said caseworkers from the Department of Social Services in his district told him of instances in which families with $191,000 of CDs in the bank were eligible for CHIP.

Mary Fallen, assistant deputy director for income maintenance at DFS, said a family's net worth of all available resources minus debts cannot exceed $250,000 for the child to be eligible for CHIP.

Wilson said the state has experienced benefits from the program in terms of prevented hospitalizations and emergency room visits.

"There are very concrete ways in which children and families and our economy are better off because of the relatively small investment," she said.

The committee will submit its budget proposal to the House Budget Committee, which will then send its full budget to the House.