LEGISLATIVE BULLETIN: Preserving Health Choice: The Right Choice For Kids in North Carolina

By Adam Linker, Health Access Coalition
June 2, 2009

Executive Summary

 

  • If North Carolina freezes enrollment in North Carolina Health Choice for Children the state will surrender $15 million in federal funds over two years. For every state dollar North Carolina spends on health insurance for children, the federal government spends three dollars to help fund our state’s program.
  • When the state temporarily capped Health Choice enrollment in 2001, the number of children in the program declined rapidly and continued to drop even when Health Choice was reopened.
  • From 2007 to 2009 the number of uninsured in North Carolina increased 22.5 percent – the largest percentage increase in the nation. Health Choice is a vital safety net program that protects our state’s most vulnerable citizens – children.

 

Cindy Mann, the recently appointed director of the Centers for Medicaid and State Operations at the U.S. Department of Health and Human Services, told a task force of the North Carolina Institute of Medicine in October: “While the problems of the uninsured seem to be in so many ways intractable, that’s not been the case with kids … over the past ten years since the CHIP [children’s health insurance program] program was started nationwide we’ve seen the percentage of uninsured, low-income children in the country drop by one-third.”

 

These national gains are reflected in the enormous success of North Carolina Health Choice for Children, our state’s safety net for uninsured children in families whose incomes fall below 200 percent of federal poverty guidelines. Now, that success is threatened by a House proposal to freeze Health Choice enrollment in its biennial budget. Such a freeze would surrender desperately needed federal stimulus money and profoundly hurt the health of our state’s children for many years.

 

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

 

During the current economic recession these public programs are critical as parents in our state are losing employer-sponsored insurance at twice the national rate. From 2007 to 2009 the number of uninsured in North Carolina increased by 22.5 percent, the largest percentage increase in the nation, according to the NC Institute of Medicine. The number of uninsured in the state now stands at an estimated 1.8 million. Approximately 14 percent of the uninsured are children in families with incomes below 200 percent of federal poverty guidelines, which means that they qualify for Medicaid or Health Choice.

 

For every state dollar North Carolina spends on health insurance for children, the federal government spends three dollars to help fund our state’s program. The House wants to freeze Health Choice enrollment at 129,694 children for the 2009-2010 fiscal year to save $5 million in state money over two years. This means that state budget writers will surrender $15 million in federal money meant for North Carolina. If we keep the children’s health insurance program open, then $20 million in combined state and federal spending will flow to local economies across the state. At a time when our state needs every bit of funding it can find, leaving more than $15 million in Washington makes little sense.

 

We know what will happen if Health Choice is capped in the current budget. North Carolina instituted a similar enrollment freeze from January 2001 to October 2001. 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 CecilG.ShepsCenter for Health Services Research at UNC – Chapel Hill to conduct focus groups of parents who were frustrated in attempts to obtain insurance by the Health Choice cap. Almost all of the children affected by the freeze, according to the NC Institute of Medicine, needed medical care while they were stuck on the waiting list. 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 a 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 for Children 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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