HHS Secretary Donna E. Shalala announced today that Alabama is the first state in the nation to receive approval of its program to provide health insurance coverage for thousands of uninsured children under the historic Children's Health Insurance Program (CHIP) agreed to last year by the President and the Congress.

Alabama will have access to a preliminary allotment of $86 million for fiscal 1998, and will expand coverage to some 20,000 uninsured children by expanding its existing Medicaid program to children up to age 19 whose family incomes are at or below the federal poverty rate ($16,050 per year for a family of four). Currently, Alabama's Medicaid program covers children from birth to age 5 with incomes up to 133 percent of poverty and children up to age 14 with family incomes up to 100 percent of poverty.

"The Children's Health Insurance Program gives hope to millions of American families who work hard and play by the rules, but don't make enough money to give their children the health care they need," Secretary Shalala said. "I'm pleased to announce that Alabama is ready to start investing in thousands of those families. Meanwhile, we're working with 15 additional states on their applications so that we can help millions more."

CHIP is a $24 billion, five-year partnership between states and the federal government to provide health insurance coverage to children whose income is too high for traditional Medicaid, but whose families don't earn enough to pay for private insurance. The program supports President Clinton's goal of helping many of the nation's estimated 10.6 million children who do not have health care coverage. Approximately $4.2 billion in allotments based on Census Bureau estimates of uninsured children is available in Fiscal 1998 for all 50 states.

The program allows states three options: designing a new children's health insurance program; expanding their current Medicaid programs; or a combination of both strategies. While Alabama's plan expands Medicaid, all three approaches are reflected in the plans submitted by Colorado, Missouri, Pennsylvania, New York, California, Florida, South Carolina, Ohio, Michigan, Tennessee, Illinois, Rhode Island, Massachusetts, Connecticut, and Oklahoma.

CHIP gives states flexibility to design programs to cover children whose family incomes are higher than traditional Medicaid limits. Medicaid family income limits for children vary from state to state and can range from the federal poverty level to as high as 300 percent of poverty. Under CHIP, states may choose to cover children whose family income is above the Medicaid threshold but less than 200 percent of poverty, or raise their current limit for children as much as 50 percentage points.

"Securing access to decent health care for children is among the highest priorities of the President, the First Lady and myself. It's the best investment we can make toward guaranteeing a healthy future for America's children," Secretary Shalala said.

Note: HHS press releases are available on the World Wide Web at: http://www.dhhs.gov.

CHIP FACT SHEET ALABAMA FIRST STATE WITH APPROVED CHILDREN'S HEALTH INSURANCE PROGRAM

Overview: An estimated 10.6 million American children currently have no health insurance. Many of these children live in working families whose employers don't provide insurance for dependents, or for whom that insurance is too expensive. To help address this problem, at President Clinton's urging a comprehensive children's health initiative was included in the Balanced Budget Act of 1997. This new program--the Children's Health Insurance Program (CHIP)--sets aside $24 billion over five years to help states provide insurance coverage for millions of children. This new program is the largest expansion of health insurance for low-income children since the creation of Medicaid in 1965. Under the program, states can use their portion of the funds to expand their existing Medicaid program, create new insurance plans, or a combination of both. The program is targeted to children whose family incomes are too high for traditional Medicaid but not high enough to afford private insurance. Allotments of approximately $4.2 billion are available to states whose plans are approved by the Department of Health and Human Services by September 30, 1998. HHS has just announced that Alabama is the first state to receive approval of its plan to expand health insurance to thousands of uninsured children. A brief summary of Alabama's plan follows:

Alabama

• State Allotment. Alabama will have access to a preliminary allotment of $86 million in CHIP funds for fiscal 1998. The state allotments are based on Census Bureau estimates of the number of low-income children without health insurance.
  
  
• Plan Design. Alabama will expand its Medicaid program to include approximately 20,000 new children.
  
  
• Benefit Package. The standard, comprehensive Medicaid benefit package will be extended to the newly eligible children.
  
  
• Cost Sharing. Medicaid rules for minimal cost-sharing will apply.
  
  
• Eligibility. The state's plan will expand eligibility to children up to age 19 who were born on or before September 30, 1983, with family income levels at or below 100 percent of the federal poverty level ($16,050 for a family of four). The Omnibus Budget Reconciliation Act of 1991 required states to phase-in Medicaid coverage for these children by 2002. Alabama will use the additional money available under the CHIP program to accelerate the addition of these kids to its Medicaid program. The program currently covers children from birth to age five at 133 percent of poverty and from age six to 14 up to 100 percent of poverty.
  
  
• Outreach. The state will hire extra outreach workers to increase the number of children located and enrolled in Medicaid. Information on the new program will be advertised through newspapers, a press conference, public service announcements and through the school system.

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