CHIP and Children with Special Health Care Needs

To order a full copy, send e-mail to books@ncsl.org, call Rita Morris, NCSL Marketing Department, (303) 830-2054, or fax (303) 863-8003.

CHIP and Children with Special Health Care Needs

Executive Summary

Enactment of the State Children's Health Insurance Program (CHIP) gives state legislators a unique opportunity to effect change for low-income, uninsured children with special health care needs. With a five-year, $24 billion allotment from the federal block grant, state legislators now have the flexibility to create separate programs or to change their state Medicaid programs to better address the needs of children with disabling conditions.

Who are children with special health care needs and how do they differ from other children? "Special needs" may be determined in a number of ways, including the child's specific diagnoses, functional limitations, need for particular services or eligibility for certain federal programs. Across the U.S., approximately 15 percent to 20 percent of children from birth to age 19 have special health care needs as defined by more than 200 conditions, from complex physical health problems to developmental delays and disabilities to mental health conditions. The key for state policymakers when considering children with special health care needs under CHIP is whether their needs can be met under a standard CHIP plan or whether supplemental services will be needed.

In the two years since CHIP was enacted as Title XXI of the Social Security Act, states have primarily focused their efforts on establishing the basic outline and operating mechanisms of their programs. As of July 1999, 25 states had chosen to expand Medicaid; 14 had established state-designed programs; and 13 had elected to do a combination of the two, expanding Medicaid for some children and enrolling others in a state-designed plan.In their initial CHIP plans, most states did not focus specifically on children with special health care needs. In effect, most are "mainstreaming" children with special health care needs into their CHIP programs with all other children without providing additional services. In states that have expanded Medicaid as their CHIP option, that approach may work fairly well because Medicaid has an extensive benefits package, covering most services needed by special needs children.

Three states, however, have specifically addressed the needs of the vulnerable population.

Connecticut's HUSKY Plus program provides children with chronic physical or behavioral conditions with wrap-around benefits to augment its basic benefit package, with services provided by an approved network of specialty providers.

Florida's KidCare program will enroll children with chronic physical, developmental or serious behavioral conditions in a special capitated managed care plan with Medicaid benefits to be delivered by an approved network of pediatric primary and specialty care providers.

North Carolina's Health Choice has a wrap-around benefit package that resembles Medicaid for children with physical or developmental problems.

States can use the flexibility of Title XXI to grapple with design issues to improve services for children with special health care needs. Among the strategies they may wish to explore and employ: providing supplemental benefits, arranging for specialists to be included under the CHIP plan, expanding eligibility criteria to assist additional families, defining "medical necessity" more broadly, modifying cost-sharing requirements and addressing quality assurance issues.

To order a full copy, send e-mail to books@ncsl.org; call Rita Morris, NCSL Marketing Department, (303) 830-2054, or fax (303) 863-8003.