It’s a $53 billion* question for Alabama, and that’s just the U.S. government dollars at play in a year in the state. There are also the personalities, policies and practices setting the direction of federal influence on everything from Alabama retirees’ Social Security checks to Boeing Company’s more than $900 million* in contracts. Today’s report on the Children’s Health Insurance Program is the first of BirminghamWatch’s looks at the Alabama-Washington connection.
If your child needed medicine for asthma or ADHD or treatment for an infection or injury, what would you do if you didn’t have insurance or the funds to pay?
That’s the scenario thousands of Alabama families face if Congress fails to reauthorize funding for the Children’s Health Insurance Program, known as CHIP. Despite bipartisan support, including professed support from the Trump White House, CHIP was not reauthorized in time for a Sept. 30 deadline. And now as the clock ticks, the funding for 160,000 children in Alabama hangs in the balance.
About 77,000 of those children have insurance paid for by the state’s Medicaid program, using CHIP funds. Medicaid could still choose to provide insurance for these children if Congress fails to act, but the state of Alabama would have to pick up the cost for covering them. Medicaid routinely faces yearly struggles for funding in the Alabama Legislature.
But 83,000 children whose insurance through Alabama’s ALL Kids program is subsidized by about $200 million from CHIP would find themselves without insurance that many of their parents can afford. If Congress doesn’t act soon, that’s what will happen early in 2018, said Cathy Caldwell, director of the ALL Kids program.
ALL Kids Program at Risk
“If CHIP funding is not continued, it’s very likely that the ALL Kids program would go away,” Caldwell said.
“Based on estimates from CMS (Centers for Medicare and Medicaid Services), we have sufficient funding to keep running the program until about February. So even though funding was not renewed by the end of September, states can continue spending any leftover ‘17 money they had … . But Alabama is estimated to run out of money in February. So it’s likely that the ALL Kids program would shut down. We currently have 83,000 children enrolled, so that would mean those 83,000 lose coverage.”
Take, for example, Hannah Johnson, a stay-at-home mom to two girls, 5-year-old Ella and 1-year-old Kendall. Hannah, whose children are among the more than 10,000 Jefferson County ALL Kids enrollees, also takes care of another child, 5-year-old Raimi, for a friend.
Ella has asthma, which has required an inhaler every day since she was 2½ and, because of her age, even more, Johnson said. “At that age they can’t do an inhaler by themselves. … For Ella to get the treatment she needs properly, she requires a mask and other equipment. “all of which costs money,” Johnson said. She wouldn’t be able to afford it without ALL Kids, she said.
She said she and her husband have worked in the restaurant business, which often doesn’t have good benefits.
“(ALL Kids) made a huge difference. Honestly, we probably wouldn’t have an asthma diagnosis for Ella because that requires going to a specialist and specialists are hard to get into, and more expensive. And there have been times when I’ve gone without health insurance because I didn’t have an affordable option for myself. But with ALL Kids, I’ve never had to make my kids go without it. I was always able to keep them insured.”
Program Helps Middle-Income Parents
ALL Kids, a program of the Alabama Department of Public Health, has been around since 1997, the same year Caldwell went to work for the program. She’s been the director for the past 11 years. ALL Kids has been a substantial benefit to middle income parents in the state, Caldwell said.
ALL Kids, like CHIP-funded insurance for children under Medicaid, provides comprehensive benefits “covering inpatient, outpatient, mental health, dental, vision,” Caldwell said. Whether kids are insurable under Medicaid or ALL Kids is determined by family income and household size, she said.
“For children, Medicaid goes up to 141 percent of the federal poverty level. So for a family of four, that’s about $35,000 a year – that’s the upper Medicaid income level for children,” Caldwell said. “ALL Kids starts where Medicaid ends and it goes up to 312 percent of the federal poverty level and that is about $77,000 (yearly) for a family of four.”
Parents pay an annual premium, which is significantly lower than private insurance. “For children in the lower-income segment of ALL Kids, it is $52 a year, and for children in the uppe- income tier of ALL Kids, it is $312 per year,” Caldwell said. “We do have copayments on non-preventive services. So a sick doctor visit for the ALL Kids low-fee group is $5. For the higher income group … it’s $12. So that’s higher, certainly, but less than one would pay in private insurance.”
Because ALL Kids is administered by Blue Cross and Blue Shield of Alabama, children enrolled in it have access to the entire network of the state’s largest health insurer.
“With the ALL Kids Blue Cross, Blue Shield, they get really good premium care,” said Janel Stringfellow of Clay. She and her husband, Jonathan, have two kids from his previous marriage.
“I don’t have to take them to a particular doctor,” she said. “I can take them to the dentist that I go to. I can take them to the doctors that I see, and I know that they’re getting really good care at a very good price and it just makes life so much easier.”
The Stringfellows signed up for ALL Kids in August, with their coverage beginning Sept. 1, after the children’s biological mother lost the insurance coverage that had taken care of health care costs for Megan, 10 and Laura, 15. They looked into ALL Kids because adding the children to either of their employer-sponsored health insurance plans would have been expensive – anywhere from $500 to $1,200 extra per month on their premiums, Jonathan Stringfellow said.
They applied for ALL Kids and found they qualified under the higher-income plan.
“The out-of-pocket premium for the year that we have to pay, I believe, is $180 per year, per child, which was a huge difference in what we would have to pay out of pocket for premiums under our employer-backed health insurance plans,” Jonathan Stringfellow said.
Help in Health Crises
More than saving money on routine medical care, ALL Kids insurance has been a critical factor in serious cases such as the situation a mother named Deborah went through with her adopted son, Tyler. Because of privacy concerns, she asked that only first names be used.
“When my son was 3, his head (started) hurting bad when he would cough, sneeze, laugh or cry,” Deborah said. “The pain became excruciating, and our pediatrician sent us for an MRI. That was on a Tuesday morning, and that night the doctor called me and said we had an appointment with a neurosurgeon at Children’s (hospital) on Thursday.
“They found that Tyler has a condition called Chiari Malformation Type 1. The cerebellum – the bottom part of the brain closest to the spine – did not have enough room to grow, so it grew in the place of least resistance, the spinal column. This caused spinal fluid to build up in his spinal cord because it could not flow properly with the brain blocking the path. The neurosurgeon said he would need surgery ASAP.
“Following his surgery on November 1, 2013, we were under the care of a neurosurgeon for three more years. The cost of the surgeries, follow-up appointments, annual MRI’s would have been more than I could have afforded.”
Tyler, now 8, still could face medical issues in the future, which makes the future of ALL Kids a matter of concern for Deborah. “I do not know what I would have done with medical bills if it were not for ALL Kids,” she said.
In her case, an expected bump in her salary could make her ineligible, no matter what Congress ends up doing.
“While I expect Tyler to lose ALL Kids coverage in 2018, anyway, if Congress does not reauthorize CHIP and fund ALL Kids, then families, parents, single moms like myself will be in a financial predicament when it comes to medical costs for children,” she said.
Impact on Health, Family Well-Being
Besides the individual value of ALL Kids to families in the program, the CHIP program funding has had an undeniable impact on the overall health of Alabama – as it has in other states, Caldwell said.
Statistics show why, she said. “Prior to ALL Kids, Alabama’s uninsurance rate for children was 20 percent. So one in every five children in our state were uninsured,” Caldwell noted. “It is now 2.4 percent. Big difference. Think about the difference between a child having comprehensive health insurance and a child being uninsured. Certainly the insured child is much more likely to get needed preventive care, dental care, vision care.”
ALL Kids’ positive impact has extended beyond health care, as well, Caldwell said, recounting an experience she heard about while standing in line a few years ago. A woman in line learned that Caldwell was the director of ALL Kids and began to praise the program.
“She said that when her children were younger, she went back to school and got a degree in education,” Caldwell said. “And she said if it had not been for ALL Kids, there’s no way she would have been able to go back to school. She was saying she’s now a teacher and her children are insured via her coverage.”
Having ALL Kids put her in a position to improve her family’s financial condition and “just made such a difference in their life,” Caldwell said.
Health care advocates representing the nearly 9 million kids nationwide who get their insurance through CHIP hope Congress will soon reauthorize the program. Earlier this month, a contingency pool was provided by the Centers for Medicare and Medicaid Services to tide the program over while more permanent CHIP funding remains up in the air.
“Absent additional appropriations from Congress, we project that every state will exhaust federal funding at various points throughout federal fiscal year 2018, with the first state projected to exhaust all available federal CHIP funding, including carryover funding and redistribution payments, in November 2017 and the majority of states projected to exhaust funding by March 2018. These projections are subject to change,” according to the Nov. 9 Center for Medicaid and Chip Services bulletin.
Meanwhile, states have to begin determining what to do if CHIP is not funded.
“States with separate CHIPs have the option to phase out coverage, transition children ages 0-18 and pregnant women to the Medicaid state plan, or a combination of these options under a state-developed approach,” CMCS said. “If a state chooses to phase out coverage, the state should redetermine eligibility for children prior to termination of coverage to see if the children are eligible for Medicaid. If a child is not eligible for Medicaid, the state should transfer the electronic accounts to the Exchange and notify the family that they should apply for coverage through the Federally Facilitated Marketplace.”
That means the Marketplaces available under the Affordable Care Act, also known as Obamacare. For some parents, though, whether the ACA is an option is unclear. Christine Prichard, a self-employed photographer who is enrolled in the ACA, said she’s not sure about healthcare for her kids, Avery, 13, and Marley, 15, if CHIP goes away.
The cost of, say, an accident involving her children, if they wind up uninsured, could bankrupt a small business like hers, Prichard said. “I could lose everything I own because someone’s playing games with our insurance. It’s pathetic.”
So far, she said, efforts to get answers from her congressman, Rep. Gary Palmer, have not exactly been comforting. A staffer in Palmer’s office simply told her, “Oh, it’ll be funded,” she said.
In Alabama, the end of CHIP funding is expected to mean no coverage for thousands of children, as Caldwell noted, and she’s afraid many may be caught by surprise.
“I do fear that, if in fact Congress does not continue funding, that many families are going to be caught off guard,” Caldwell said. “I think most families don’t fully understand what’s at risk right now. If Congress hasn’t acted before then we will likely send notices out to families in December … letting them know that we might have to shut the program down. And we’ll likely be looking at dis-enrolling children, probably in February.”
* 2017 figures are from USASpending.gov, a report of the U.S. Department of Treasury.