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Over the next ten years, states get roughly $4 billion a year in federal grants. (During the first five years, the budget bill allocates $24 billion to child health, but nearly $4 billion of that amount goes, not for the new grant program, but for increased Medicaid spending on several groups of children.)
Each state chooses whether to participate in the new grant program. Funding is available beginning October 1, 1997. A state may spend each year's allotment either in that year or in the two following years.
States can use this money to expand Medicaid, create a new state program for children's health insurance, or both.
Up to 10 percent of a state's allocation can be spent on a combination of administrative costs, outreach, direct health services for children and other health services initiatives for children. The rest must be spent on health insurance, either through Medicaid or a new state program.
Who's eligible: As a general rule, federal grants can help only children ineligible for Medicaid with family income at or below 200 percent of the federal poverty level ($32,100 a year for a family of four in 1997). However, the bill makes an exception for states that, in June 1997, provided Medicaid to children with family incomes above 150% of poverty ($24,075 for a family of four). In such states, new child health funds can cover children with family incomes higher than 200% of poverty, up to 50 percentage points above the state's previous Medicaid eligibility level.
Benefits: A state running a child health insurance program must provide at least the benefits covered by certain specified, commercial insurance plans (Blue Cross/Blue Shield for federal employees, a state employee health plan, or the largest HMO in the state). It can also provide a different combination of services, so long as the total value of all services is the same as under one of these benchmark plans.
Cost-sharing: In a state child health insurance program, children with family incomes at or below 150 percent of poverty can be charged no more than the same small amounts for premiums, deductibles, co-payments and co-insurance that are permitted for adults under Medicaid. Children with family incomes over 150 percent of poverty can be charged on a sliding scale, but total payments may not exceed 5 percent of family income. For all children, well-baby care, well-child care and immunizations are exempt from any cost-sharing.
State match: To receive federal funds, a state must pay matching amounts. The state's matching percentage is 70% of its matching rate under Medicaid. For example, a state that pays 50% of general Medicaid costs would pay only 35% of costs for new children, whether they are covered through Medicaid expansion or a new child health insurance program. Each state must pay at least 15% of such costs.
Medicaid: To receive grants, a state must maintain Medicaid eligibility for children that was in effect in June 1997. A state that creates a new child health program must screen applicants for possible Medicaid coverage and enroll Medicaid-eligible children into Medicaid.
The actual bill language is available at http://speakernews.house.gov/child.htm.
A comprehensive, detailed summary will soon be available on Children's Defense Fund's Web site -- http://www.childrensdefense.org. For more information, contact: cdfhealth@childrensdefense.org. Our thanks to Families USA for the basic format of this summary.
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