Payback Time

Teddy Maki

Classes have already started, but staff at the New Family Center in Minneapolis are still busy registering children for school. In one corner of the cluttered room, a young mother is filling out health-insurance forms with the help of a Spanish interpreter. Near the front door, six Somali children are crowded around a wooden table giggling and playing with an assortment of Happy Meal toys. One of the nurses brought the toys in, hoping to keep kids' minds off the fact that they will soon have to get a few shots. Still, the giggling stops each time a nurse approaches to fetch the next wide-eyed child.

In a nearby cubicle, their father is registering the children for school. The center is a three-year-old joint effort of the school district, the Minneapolis Department of Health and the Children's Defense Fund. The idea is to reduce the number of uninsured children in the state by offering state-subsidized health insurance to families when parents show up to register their kids for school. Because all children entering Minneapolis schools must register here, last year nearly 10,000 families passed through the center, located in the same building as the Four Winds School at 2300 Chicago Ave. in Minneapolis.

By all accounts, says Tom Ehrlichmann, director of the St. Paul-based Covering Kids--a national health initiative aimed at helping low-income children get access to health insurance--the project has been quite successful at helping families get access to health care. Too successful, in fact. Unless Congress acts quickly to broaden the scope of the program, Minnesota will be forced to send back $28 million in federal funding.

When Congress created the $4.2 billion Children's Health Insurance Program (CHIP) in 1998, the aim was to cover children whose parents work but are still too poor to afford insurance without help. To that end, states that already served many uninsured children could only use the money to create new programs that would serve even larger numbers. When the program was created, Minnesota already offered subsidized health insurance, known as MinnesotaCare, for families earning up to 275 percent of the federal poverty level. Right now a family of four qualifies for coverage if it earns less than $47,000 a year. (The majority of people covered by MinnesotaCare earn about 200 percent of poverty or $34,104 for a family of four.)

The only way the state could legally spend the federal money was to change the already liberal program to make even more children eligible. And that's too bad, say child advocates and state officials. They would like to use the money to offset the high cost of premiums and to simplify the process of applying to the program. And they worry that the unspent money will make Minnesota ineligible for future federal funding.

"It's sort of like punishing good behavior to not let us use the CHIP money to make other needed improvements," says Ehrlichmann. "The federal government has so far been unwilling to consider compromises on how to use the CHIP money. They're afraid that if they set that kind of precedent other states will do the same thing and the money won't be used the way it was intended to be."

Before the federal program, millions of children nationwide were uninsured because their parents made too much money to be eligible for Medicaid but too little money to afford private insurance. CHIP dollars allowed states to create new insurance programs with higher eligibility levels. The program was a boon for states that had done little to make health care accessible to the uninsured. But at the time, Minnesota was already a national leader in providing health care to children.

Last week the New York Times reported that in 1999, the CHIP program reached only 2 million of the nation's 7.2 million uninsured children under age 19, and that 40 states were about to lose $2 billion in unspent funds. A map accompanying the story highlighted the supposed offenders, including Minnesota; some, like Texas and Arizona, have used their funding to provide health care to less than 15 percent of their uninsured children. Unlike Minnesota, those states and others failed to use their CHIP money because lawmakers stood in the way, opposing increased eligibility limits and initiatives, such as the New Family Center, that would have offered outreach in schools.

Kathleen Henry, director of Health Care Eligibility and Access for the state's Department of Human Services, is hopeful that some compromise will eventually be reached. "We are asking for a waiver on their federal guidelines because we think we've figured out a better way to help people in our state," she says. "The fact that Congress is even considering options now is a good sign."

Henry would like to see money used to reduce premiums paid by families covered under MinnesotaCare. "Even those with very low incomes must pay premiums under MinnesotaCare and that can be a real barrier for people." Those who are at the top of the plan's eligibility limit, she explains, can pay more than $500 per month to cover their families. "That's just too much for a lot of people and we'd like to be able to lower those costs for those who can't afford it."

There's no doubt, says Jim Koppel, director of the Minnesota chapter of the Children's Defense Fund, that the federal money would help the state insure more children. But, he adds, there are still ways in which Minnesota can move forward on its own. "We led and we got punished for it and that makes it difficult now to say, Let's charge forward," he says. "But that's what we need to do. Our system is still too complicated and expensive and it's leaving people out. If we combined our programs into one, we could lower costs and take advantage of the progress we've already made."

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