LEGISLATIVE BULLETIN: Health Choice: Keep This Essential Program Open

The General Assembly Should Aid Struggling Families and Boost North Carolina’s Economy
By Adam Linker, NC Health Access Coalition
June 1, 2010

In just the last four months, 3,334 kids enrolled in affordable health coverage through North Carolina Health Choice, our state’s safety net program for uninsured children in families whose incomes fall below 200 percent of federal poverty guidelines, or $36,620 for a family of three.

The federal government covers 75 percent of the cost of insuring these children. Unfortunately, the North Carolina House budget adds only $3.25 million to Health Choice’s funding, which is not even enough to serve the children currently enrolled in the program.

Under optimistic assumptions, the North Carolina Senate’s budget would enroll 2,750 additional children in Health Choice with a $6.5 million increase in funding. It’s unlikely that amount would keep the program open in 2010-2011 given that 3,000 children have enrolled in the last three months alone. Now the House cuts that additional funding in half, which is even less workable.

Gov. Beverly Perdue’s budget included $8.5 million in expansion funding to cover at least 8,000 more kids. This is a more realistic appraisal of how to keep the program open. The House and Senate should look to the governor’s recommendations for guidance.

From 2002 to 2007 the percentage of uninsured children in North Carolina increased nearly 13 percent, much of which was due to parents losing employer-sponsored insurance. Over that same period, the percentage of children enrolled in Medicaid or Health Choice increased 33.8 percent. Medicaid and Health Choice save many children who would go uninsured without strong public programs.

We know what will happen if Health Choice is closed to new enrollments in the current budget. North Carolina instituted a similar enrollment freeze from January 2001 to October 2001, and the results of that brief, nine-month cap were devastating.

In six months, enrollment in Health Choice dropped from 72,024 in January 2001 to 59,472 in June 2001, according to the NC Institute of Medicine. Because of the steep enrollment declines Health Choice partially reopened in July 2001, but participation in the program continued to drop for another four months until it reached a low of 51,294 in October 2001. North Carolina and health advocates across the state have spent considerable time and resources on outreach to parents who qualify for Health Choice.

Once the program is capped this work is undermined. Word travels fast that the program is not accepting new applicants and enrollment plummets.
 
After the 2001 freeze the Kaiser Commission on Medicaid and the Uninsured worked with the Cecil G. Sheps Center for Health Services Research at UNC – Chapel Hill to conduct focus groups of parents who attempted to obtain insurance for their children but were frustrated by the Health Choice cap. Almost all of the children affected by the freeze needed medical care while they were stuck on the waiting list, according to a report on the focus-group results by the NC Institute of Medicine.

Parents reported that their children suffered everything from bronchitis and influenza to asthma and life-threatening infections. Parents able to obtain care often incurred large medical bills and encountered significant delays. According to an NC Institute of Medicine report: “Many families tried to obtain other health insurance coverage for their children during the enrollment freeze, but most were unable to afford the monthly premium costs, even when it was available through their or their spouse’s employer.”
 
NC Health Choice is an essential program providing an important safety net for children. Health Choice uses generous federal matching funds to stimulate local economies. And we know that even a temporary freeze in enrollment will hurt access to medical care for thousands of children. We also know that enrollment will plunge even after Health Choice is reopened.

When our state needs all of the money it can find, and when North Carolina is leading the nation in the growth of the uninsured, it makes little sense to cap Health Choice. The tremendous economic and human costs of such a freeze far outweigh any small and temporary savings for state coffers.
 

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