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HHS APPROVES WEST VIRGINIA EXPANSION
OF CHILDREN'S HEALTH INSURANCE PLAN

This is the second phase of West Virginia's CHIP plan. The first phase, a Medicaid expansion, was approved by Secretary Shalala on Sept. 15, 1998. State officials expect the second phase of the program- -a separate state CHIP program--to enroll more than 10,000 children by the end of fiscal year 2000.

West Virginia is eligible to receive as much as $23 million in new funds for fiscal year 1998 under the federal CHIP program, the historic, bipartisan legislation signed last year by President Clinton. 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. The state will also be eligible for an additional $23 million in funds for fiscal year 1999.

West Virginia, like all states with CHIP plans, will receive federal matching funds only for actual expenditures to insure children. Together, the 50 state and U.S. territorial plans approved to date anticipate providing health insurance coverage for more than 2.5 million currently uninsured children within the next three years.

"The Clinton Administration and the states are working together to give children the health care they need to live longer, healthier lives," said Secretary Shalala. "It's a pleasure to approve this amendment and I look forward to more states expanding their CHIP programs in the future."

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.

The second phase of West Virginia's CHIP plan will create a new insurance program for children ages 6-18 whose families have incomes of 150 percent of the federal poverty level or less (the federal poverty level is $16,700 for a family of four). The first phase extended Medicaid coverage to children ages 1-5 with family incomes up to 150 percent of poverty.

The benefit package will be modeled on that offered to state employees and will provide a comprehensive range of in- and out-patient medical services and will include prescription medications, mental health, substance abuse treatment and home and community-based care. Care will be delivered in a fee-for-service system. There will be no cost to families in the program.

"The West Virginia 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, which administers CHIP, Medicaid and Medicare. "It is through efforts like West Virginia's 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 50 U.S. states and 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, New Mexico and Hawaii.

HCFA is also reviewing plans from Tennessee, Guam and American Samoa. West Virginia is the twelfth state to have an expansion approved.

Note: HHS press releases are available on the World Wide Web at: www.dhhs.gov.