INSURANCE DEPARTMENT

    The budget provides $15.5 million in state funds, $80.3 million in federal funds and $33.0 million in existing cigarette tax revenue to implement changes to the Children=s Health Insurance Program (CHIP). The changes include increasing the age eligibility limit for the free component of CHIP and to increase the income eligibility limits. With these two eligibility changes, approximately 100,000 additional children would receive free health care insurance coverage. The cost to the state per child for the Free Program is $620.

    In addition, the age eligibility limit for the subsidized component of CHIP will increase, allowing an additional 21,800 children to receive subsidized health insurance coverage. Through the subsidized program component of CHIP, the state pays 50% of the insurance premium for eligible children while the family is responsible for the remaining 50%. The cost to the state per child for the Subsidized Program is $310. Implementing legislation will be required to implement all these eligibility changes.

 

	CURRENT PROGRAM	NEW PROGRAM
# Children Served
Free Program	52,747	152,747
Subsidized Program	2,525	24,325
Age Limits
Free Program	0 - 16	0 - 18
Subsidized Program	0 - 5	0 - 18
Maximum Family Income*
Free Program	$29,693	$32,100
Subsidized Program	$37,718	$37,718

                                    *(family of 4)

    To identify and enroll children eligible for CHIP, the budget includes $2.3 million in state funds and $4.7 million in federal funds for an extensive outreach and enrollment effort. When the Governor capped enrollment for the program two years ago, the department discontinued its outreach programs since no new children would be allowed in the program. Additionally, $450,000 in state funds will be used to support the expanded CHIP administrative structure in the Insurance Department.

    As a result of recently enacted federal legislation, Pennsylvania is eligible to receive $600 million during the next five years for childrens= health programs. Starting October 1, 1997, Pennsylvania was eligible to receive $120 million a year on a two-to-one matching basis for existing programs. It is anticipated that the state will only be able to draw-down $50.2 million in federal funds based on its ability to spend this money in 1997-98 and $80.3 million in 1998-99. The state would have to appropriate an additional $18 million in state funds to draw down the entire amount of federal money available for 1998-99. Beginning in 1999-00, the Department anticipates allocating enough state funds in order to draw down the entire $120 million available per year from the federal government.