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HHS Secretary Donna E. Shalala today announced approval of New Mexico's proposal to expand health insurance coverage to uninsured children through the Children's Health Insurance Program (CHIP).

New Mexico could receive as much as $57 million in FY 1998 funds under the federal CHIP program, the historic, bipartisan legislation signed in 1997 by President Clinton. New Mexico, like all states with CHIP plans, will receive federal matching funds only for actual expenditures to insure children. The CHIP law allocates $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.

State officials estimate they will enroll more than 5,000 children by Sept. 30, 2000. New Mexico's plan is the 49th CHIP plan to be approved since the program's inception. Together, these plans anticipate providing health insurance coverage for more than 2.5 million currently uninsured children within the next three years.

"It is gratifying to see so many states take 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 each state's plan before CHIP funds become available.

New Mexico will use its federal allotment to expand its existing Medicaid program to cover children up to age 18 in families with incomes up to 235 percent of the federal poverty level (the federal poverty level is $16,450 for a family of four).

The benefit package will be the same as the state's Medicaid program benefit plan. Families with incomes between 186-235 percent of poverty will be charged nominal copayments of $5 per visit to the doctor. However, cost-sharing cannot exceed 5 percent of a family's annual 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, which administers CHIP, Medicaid and Medicare. "It 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, 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. CHIP plans have been approved in 49 states and U.S. territories. In order of their approval, they are: 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, North Carolina, Minnesota, Maryland, Arkansas, Nebraska, Maine, Nevada, South Dakota, Iowa, Kansas, Delaware, Georgia, Montana, New Hampshire, West Virginia, Virgin Islands, the District of Columbia, Arizona, North Dakota, Louisiana, Virginia, Mississippi, Kentucky, Alaska, Vermont and New Mexico. HCFA is also reviewing plans from Tennessee, Hawaii, and Guam.

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