State follows Alabama in kids’ plan switch

Print Friendly and PDF By: Andy Miller Published: Sep 29, 2011

Georgia will soon join a handful of other states in a voluntary switch of thousands of children now covered by a state employee health plan into a federally funded insurance program for kids in lower-income families.

A spokesman for the federal Centers for Medicare and Medicaid Services said this week that the agency has approved Montana, Alabama, Texas, Kentucky and Pennsylvania to open up their Children’s Health Insurance Program (CHIP) to kids of state employees. Georgia officials say they expect to get similar approval shortly.

Alabama allowed eligible children to make the transition beginning in January, and about 6,000 children have made the switch to its CHIP program, known in the state as ALL Kids.

The Georgia transition of children will be launched with open enrollment in October for the State Health Benefit Plan, which covers about 700,000 people, including state employees, teachers, state retirees, and school personnel, as well as dependents.

The state anticipates that about 40,000 children will move to PeachCare. The movement of children is expected to save millions of dollars for the state’s already stressed budget because PeachCare, like other CHIP programs, gets federal matching dollars.

The switch will also reduce costs for the parents whose income qualifies their children to enter PeachCare.

But medical provider groups have expressed concerns about the move. Their central objection is the lower pay that providers receive under PeachCare than under the state employee plan.

The states have taken advantage of a provision in the 2010 health care reform law that ended a prohibition against children of state employees joining CHIP. “I personally think this was an unfair prohibition,’’ Cathy Caldwell, director of the Alabama ALL Kids plan, said Thursday.

Yet Georgia, along with 25 other states, is fighting the 2010 law, known as the Affordable Care Act, in the courts. Alabama, Texas and Pennsylvania are also challenging the constitutionality of the legislation.

When asked whether the state government’s pursuit of financial help through a law it opposes in court shows inconsistency, Brian Robinson, a spokesman for Gov. Nathan Deal, said the state is upholding its legal obligations while at the same time looking out for Georgians’ interests.

In an email statement to GHN, Robinson said: “The state will follow the law and it will take federal funds for current programs. Our taxpayers in Georgia shouldn’t be funding programs that aid everyone but us. If we’re successful in our suit against Obamacare, federal law will change and our policies will change accordingly. …For now, though, it’s the law of the land. We will abide by it while also working within the system to fight the law.”
Caldwell said she hasn’t heard any talk of inconsistency in Alabama. “We’re fighting [health reform] on one level and moving forward on another level,’’ she said.

Single parents who qualify to move their children have saved on premiums and co-pays, she said. “It’s a good thing for the employees and a good thing for the state.’’

Pennsylvania allows state employees to access CHIP for children only if those workers can demonstrate that more than 5 percent of their income goes toward health care expenses. “That is the case for less than 1 percent of state employees,’’ said a spokeswoman for the Pennsylvania Insurance Department.

About 300 children have made the switch from the state employee plan to CHIP in Montana, and that number is expected to increase with outreach this year, said Jon Ebelt, a spokesman for the Montana Department of Public Health and Human Services.

Georgia’s Department of Community Health board recently gave approval to the children’s transition, which is projected to save Georgia more than $32 million this fiscal year.

Parents would have to qualify based on their income. It’s expected to draw children of lower-paid school personnel and state employees, such as bus drivers, administrative assistants and cafeteria workers.

The move, though, has caused some unease among hospitals and physicians. They are paid at a much lower rate under PeachCare than under the state employee plan. The pay differential amounts to about 12 percent, DCH said recently.

The state says it is considering options to offset that pay reduction to doctors, dentists, hospitals and other providers.

Alabama’s Caldwell said there’s no pay differential for services delivered under its employee program and under CHIP. Montana does have a pay gap, but Ebelt said the transition has not caused problems with medical providers.

A second issue that has been raised in Georgia is whether the current network of doctors and other medical providers can handle the new load of patients. PeachCare currently covers about 200,000 Georgia children.

The Georgia Hospital Association has raised concerns about the child health plan transition in a letter to DCH Commissioner David Cook. The move of thousands of children “will exacerbate the current access problem,’’ Kevin Bloye, a GHA vice president, said Thursday.

PeachCare pays significantly less than the state employee plan, he noted.

Many doctors have opted to not take any new Medicaid and PeachCare patients because of low pay, Bloye added.

 

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