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Date: Tuesday, July 14, 1998                                
FOR IMMEDIATE RELEASE 
Contact: HCFA Press Office (202) 690-6145

HHS Secretary Donna E. Shalala today announced approval of North Carolina's plan to expand health coverage for thousands of uninsured children through the Children's Health Insurance Program (CHIP).

North Carolina could receive as much as $79 million in new funds under the federal CHIP program -- the historic, bipartisan legislation signed last year by President Clinton. The CHIP law allocates $24 billion over the next 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 Carolina officials project an enrollment of 35,000 the first year and estimate that 71,000 children would be eligible to receive health insurance coverage through the state's new title XXI program.

North Carolina is the twenty-fourth CHIP plan to be approved in the ten months since CHIP funds have been available. Together, these 23 states and Puerto Rico anticipate providing health insurance coverage for more than two million currently uninsured children within the next three years.

"Too many working parents can't afford health care for their children, and too many children are at risk," 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 each state's plan before CHIP funds become available.

North Carolina will use its CHIP allocation to create a separate state health insurance program to provide coverage to uninsured children whose family income does not exceed 200 percent of the federal poverty level (the federal poverty level for a family of four is $16,450). Families participating in CHIP whose incomes rise above 200 percent of poverty up to a maximum of 225 percent, will be able to buy into the program for one year.

The benefit package is equivalent to that offered to state employees, plus Medicaid-equivalent benefits for children with special health care needs. Dental, optical and hearing care will also be provided. Families between 150-200 percent of poverty will be required to pay a $50 enrollment fee for one child or $100 for two or more children. Families whose income is above 150 percent of poverty will also have copayments for services. As with all CHIP plans for families above 150 percent of poverty cannot exceed 5 percent of the family's income.

"The success of the CHIP program has shown an inspiring amount of cooperation between the federal government and the states," said Nancy-Ann DeParle, administrator of the Health Care Financing Administration (HCFA), which administers CHIP, Medicaid and Medicare. AIt is through those efforts 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 kids the same kind of high quality health care others take for granted," said Claude Earl Fox, M.D., M.P.H., administrator of the Health Resources and Services Administration (HRSA), the agency working with HCFA and states to implement CHIP. "Free or low-cost health insurance is what families need to ensure their kids can grow up strong and healthy."

For the first year of the program, allotments totaling $4.3 billion are available to states whose plans are approved by HHS by Sept. 30, 1999. In addition to the 24 plans which have been approved -- Alabama, Colorado, South Carolina, Florida, Ohio, California, Illinois, New York, Michigan, Missouri, New Jersey, Connecticut, Rhode Island, Oklahoma, Pennsylvania, Massachusetts, Wisconsin, Oregon, Texas, Idaho, Puerto Rico, Indiana, Utah and North Carolina -- these plans have been submitted: Tennessee, Nevada, Vermont, Minnesota, Montana, Maryland, the District of Columbia, Arkansas, Nebraska, New Mexico, Maine, New Hampshire, Georgia, Iowa, South Dakota, Kentucky, West Virginia, Virginia and the Virgin Islands.

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