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Lobbyist Money Help  

Missouri's child health insurance program to receive federal windfall

September 25, 2000
By: Suzanne Bessette
State Capital Bureau
Links: SB 632

JEFFERSON CITY - Missouri stands to gain millions of dollars in federal funding because other states have failed to spend enough of your federal tax dollars.

The money comes from a $40 billion, ten-year federal program adopted in 1997 for children's health insurance.

The money is divided each year among the nation's 50 states with the requirement that a state's intial year's allocation be spent within three years with a September 30, 2000 deadline. Unspent money will be redistributed to states that have met the spending requirement.

So far, just 10 states -- including Missouri -- have met that federal requirement. That leaves these 10 states waiting to split up the un-eaten financial pie that could be as high as $1.9 billion for the first year.

"As the law stands now, it looks like there will be a large sum of money for us," said Greg Vadner, Director of Missouri's Medical Services Division.

Congress created the Children's Health Insurance Program in 1997 to cover the health costs of children whose families have too much money to qualify for Medicaid but not enough to afford private health insurance. The program allocated $40 billion during 10 years for states' implementation of child health insurance reforms and programs, with $4.2 billion given in the first year.

The problem has therefore not been a lack of money, but a lack of spending. The states failing to spend their allotments cite slow planning or enrollment procedures, a lack of eligible children, and "inflexible" federal rules as obstacles to spending.

Missouri has succeeded where others states failed.

Legislation pushed by the governor and passed in 1998 despite strong objections from some state GOP senators, expanded Medicaid's existing coverage of children. This allowed the Medical Services Division to spend the initial year's allotment of almost $52 million.

"We were in a good position to get a fast start," Vadner said. "We were ready to go, and had been talking about starting a program for expanding child health insurance for some time."

The new legislation and federal funding have allowed Missouri to offer health insurance to children under the age of 19 whose family income is less the 300 percent of the poverty level. That means, for example, that a child or children in a three-person household earning under $42,450 per year is eligible for this insurance.

Missouri's program has enrolled more than 65,000 children since 1997, and has referred 20,000 more applicants to traditional Medicaid coverage. The Social Services Department estimated at the beginning of the program that 90,000 Missouri children would be eligible for coverage.

But Missouri's windfall is not yet set in stone. First of all, it's unclear exactly what portion of the $1.9 billion each of the 10 states would receive. Vadner said that New York and Pennsylvania, also on the list of recipient states, would get the lion's share of surplus funds.

Second, and more importantly, remains the question of whether the money is coming at all. "The states that stand to lose money are lobbying very hard to change this," Vadner said.