The sole purpose of the Children's Health Insurance Program (CHIP) is to provide health insurance coverage for children who cannot afford private health insurance and do not qualify for Medicaid. Lately, some have invented a crisis that does not exist. Claims have been made that the CHIP program is in danger of running out of money. Following are a few of the questions that have been raised in the media recently and the answers to those questions.

Is CHIP important to the Legislature?
The Texas Legislature's commitment to the continuing success of the Children's Health Insurance Program is undeniable. CHIP is a $1 billion a biennium program with recent enrollment figures reaching 530,000 children. The success of the CHIP program is extraordinary, and we will see to it that the program continues.

Is there a enough money to pay for the CHIP program today?
The short answer is YES. There is no reason that anyone who qualifies for the CHIP program should be turned down. There is enough money in the program to provide health insurance to children who need it.

Why has there been talk about a $20.4 million CHIP shortfall?
The shortfall figure is a projected dollar figure that will vary based on variables such as enrollment, utilization and costs. Since there are 18 months before the end of the biennium, it is too early to make an accurate determination as to whether a $1 billion dollar program will have a $20 million shortfall, which represents less than two percent of the program's budget. By the end of the biennium we will have had three and a half years of CHIP enrollment experience and also will have completed another legislative session. A number of things can happen in the next 18 months to ensure the CHIP program is healthy.

What are we doing in the meantime?
Since the Legislature adjourned in May, 2001, a number of actions have been taken to ensure the continued success of CHIP.

1. FUNDING INCREASE - CHIP providers received a $45 million boost, an average of a 17.7 percent increase.
2. ENCOURAGE APPROPRIATE UTILIZATION - Minimal co-pays were implemented to encourage CHIP members to visit their doctors, instead of emergency rooms, for non-emergency services. Also, CHIP members now can choose generic medication instead of more expensive brand names.
3. DRUG SAVINGS - The CHIP prescription drug benefit was moved from a traditional managed care model to the Vendor Drug Program. The possible savings and rebates from this are projected to be $19 million. If savings do result from this change, we will keep the funding available in the event that there is a shortfall in the program.
4. UNANTICIPATED ADDITIONAL FUNDS - CHIP Health Plans will share $22 million in one-time federal funds referred to as "bridge funding" as a supplemental reimbursement, above past appropriations, to offset higher than anticipated utilization during the program's start-up phase.

What if a shortfall does materialize?
The Texas Legislature will do what is necessary to keep the CHIP program and our Texas children healthy.

Now that you know that the CHIP program is here to stay, you can see if your child is eligible to enroll by calling 1-800-647-6558.

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