HHS APPROVES NORTH DAKOTA PLAN TO FURTHER BROADEN
CHILDREN'S HEALTH INSURANCE

HHS Secretary Donna E. Shalala approved today a proposal by North Dakota to expand Healthy Steps, its Children's Health Insurance Program (CHIP), to insure children who would otherwise not have coverage.

North Dakota estimates that this second phase of its CHIP program will enroll 1,900 children by June 2001, adding to the 500 children that the state estimated would be covered under its original plan. The original plan was approved in September 1998.

North Dakota is eligible to receive as much as $5 million in new funds for fiscal year 1999. CHIP is historic, bipartisan legislation signed in 1997 by President Clinton. The CHIP law appropriates $24 billion over five years to help states expand health insurance to children whose families earn too much for traditional Medicaid, yet not enough to afford private health insurance. North Dakota, like all states with CHIP plans, will receive federal matching funds only for actual expenditures to insure children.

Together, the 56 state and U.S. territorial CHIP plans anticipate providing health insurance coverage for more than 2.6 million currently uninsured children over three years.

"It is gratifying to see North Dakota and so many states taking advantage of this wonderful new program to help working parents obtain health insurance for their children," Secretary Shalala said. "The Clinton Administration and the states are working together to give children the health care they need to live longer, healthier lives. That's good for all of us."

CHIP gives states three options for devising a plan to cover uninsured children: designing a new children's health insurance program; expanding current Medicaid programs; or a combination of both strategies. HHS must approve any expansion of a state's original CHIP plan before CHIP funds for such an expansion can become available.

The first phase of the North Dakota CHIP plan extended Medicaid coverage to 18-year-old children in families with incomes below 100 percent of the federal poverty level (FPL). The federal poverty level is $16,700 for a family of four.

The second phase of the CHIP plan will create a separate children's insurance program for children through age 18 in families with incomes below 140 percent FPL who are not otherwise eligible for Medicaid.

The benefit package for the second phase is equivalent to the package available to North Dakota state employees. The package will be enhanced by the addition of a basic preventive dental and vision package. Cost sharing will be limited to emergency services delivered at a hospital and prescription drugs. No cost sharing will be imposed on American Indian/Alaska Native children.

"The North Dakota amendment is a positive demonstration that CHIP is working and that states are enthusiastic about this program," said Nancy-Ann DeParle, administrator of the Health Care Financing Administration (HCFA), which administers CHIP, Medicaid and Medicare. "It is through efforts like the expansion of North Dakota's CHIP plan that we will realize the administration's goal of providing health insurance to those who need it."

"We're pulling together to help hard-working, low-income parents give their children the same kind of high quality health care that others take for granted," said Claude Earl Fox, M.D., M.P.H., administrator of the Health Resources and Services Administration, the agency working with HCFA and states to implement CHIP. "Free or low-cost health insurance is what families need to ensure their children can grow up strong and healthy."

Federal allotments for federal fiscal years 1998 and 1999 totaling $8.5 billion are available to states whose plans were approved by HHS by Sept. 30, 1999. To date, CHIP plans have now been approved in all states, U.S. territories and the District of Columbia. Today's approval of the state of North Dakota's expansion is the 30th CHIP amendment that has been approved by HHS.

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