Where The SCHIP Falls, It May Hurt Some

March 28, 2008
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As congressional Democrats and President George Bush prepare to square off again on how many federal dollars should be allocated to the State Children’s Health Insurance Program, Michigan has a concern about the program that goes beyond the funding level.

After the President vetoed an attempt last year to raise SCHIP funding from $5 billion to $7 billion annually for the next five years, Congress extended the program’s existing funding level through the end of March 2008.

When lawmakers did that, they also agreed to keep some of the SCHIP waivers intact, but the White House said last fall that it didn’t want these dollars to be spent on any other group than uninsured children in low-income households. And if Bush is able to sway enough members of Congress over to his side on the waivers issue, then some low-income adults in Michigan will lose their health insurance coverage.

Michigan is one of a handful of states that has been given what is called an Adult Benefits Waiver from the federal government as part of its SCHIP funding. The waiver lets the state use any unexpended SCHIP dollars to provide these adults with limited coverage.

Department of Community Health spokesman James McCurtis told HQ that the state’s Adult Benefits Waiver will expire next January unless it’s reauthorized this year. Community Health, in turn, authorizes county health plans to provide basic coverage to poor adults with the state’s Adult Benefits Waiver dollars from Michigan’s excess share of the SCHIP funding.

Those are the dollars the Kent Health Plan Corp. uses to fund a program it calls Plan A, which serves childless adults whose annual income is roughly at 35 percent of the poverty level. For a single individual enrolled in Plan A, that income level is about $3,600. In certain cases, the income cap can rise to $6,000 per annum.

Plan A covers office visits, labs, radiology and generic medications, especially prescriptions that treat chronic and acute conditions that, if left untreated, would result in trips to the emergency room and inpatient hospital stays.

“Plan A does not provide any reimbursement for inpatient hospital services. At the Plan A income level, people typically qualify for hospital-charity care should they end up in an inpatient situation,” said Lynda Zeller, Kent Health Plan president.

“KHPC provides a ‘primary care physician’ assignment for the member and encourages that member to seek care at the physician’s office rather than the emergency room. KHPC also provides a ‘member services’ and a ‘provider services’ call system to support members and providers who serve this often-marginalized population,” she added.

Zeller said a trio of the plan’s benefits — access to a primary physician, the support system and preventive medications — make a strong contribution to managing chronic conditions for people who have little other assistance or the means to get help.

Zeller also said that Plan A should have about twice the number of members it normally has, meaning there are more childless low-income adults in the county who could qualify for the program. But the total membership isn’t nearly as high as it could be because the SCHIP funding the state receives and distributes for the coverage isn’t large enough to completely meet the need.

“Our Plan A membership should be at about 4,000 to 6,000 persons here in Kent County. However, our membership got as low as 1,100 people before the state reopened that program,” said Zeller.

The state closed new enrollment in Plan A for 11 months last year and reopened it for the first two months of this year before closing it again on Feb. 29. Around the closing deadline, Zeller said she hoped membership would reach 3,500, which has been an average number for the plan.

But Zeller also pointed out that had the additional funding for SCHIP become part of the federal budget last October, the state would likely have been able to keep the enrollment period open until the end of September — seven months longer than it was able to this year. And all the Congressional debates about reforming SCHIP that were made last fall indicated that the waivers would become a thing of the past in a new funding bill.

“None of the reforms that had bipartisan support last fall would have allowed the continuation of funding of childless adults with SCHIP money, no matter how good a job the state does covering children,” she said.

So if Michigan loses the Adult Benefits Waiver in the next round of SCHIP funding, state officials will have to come up with a new source of funds to maintain coverage of poor, childless adults. Some believe these adults will automatically qualify for coverage under Medicaid if the waiver goes away, but Zeller counters that isn’t exactly accurate.

“There is a myth in Michigan that anyone who is poor can get Medicaid. Not true,” she said.

“If you are an adult with no children in your home, and one who is not blind or disabled, you do not qualify for Medicaid. Most Michiganders would be shocked to realize this is true.” HQX

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