By John McInerney, Health Policy Director, The Commonwealth Institute for Fiscal Analysis
Families in Virginia can breathe a bit easier these days, as efforts by Governor Bob McDonnell and the House of Delegates to tighten eligibility in the states’ CHIP program have failed.
Virginia’s program is called Family Access to Medical Insurance Security (FAMIS), and it covers children and pregnant women up to 200 percent of the federal poverty level (FPL). While the eligibility standard is among the lowest in the nation (Virginia has a gross income standard, with no deductions), the program has still been able to enroll a lot of low-income kids. Over 155,000 received FAMIS coverage at some point in the 2009 federal fiscal year. For the past several years, FAMIS has enjoyed overwhelming support from lawmakers and the public as a cost-effective and efficient way to cover low-income children and pregnant women.
This year, however, Virginia faced a two-year budget shortfall of over $4 billion. Instead of taking a balanced approach, the Governor targeted education and health care for cuts (the Governor and the General Assembly rejected options to preserve these important priorities by raising additional revenue). Health care is the second largest share of Virginia’s budget, although we are less generous than most other states. In fact, Virginia is one of the 10 wealthiest states in the country, but ranks 48th in per-capita Medicaid expenditures. The state only covers children up to the federal minimum of 133 percent of FPL. Parents fare even worse, with eligibility only extending up to 29 percent of FPL, just over $6,000 a year for a family of three.
With very few optional Medicaid spending programs to cut, Governor McDonnell proposed in February to freeze enrollment in FAMIS, a change that would result in a reduced enrollment of over 28,000 kids and pregnant women within two years. A few days later, the House of Delegates released their budget proposal, rejecting the Governor’s proposed freeze and instead proposing to lower income eligibility from 200 percent to 175 percent of FPL. This proposal would kick about 30,000 children and pregnant women from FAMIS and would reduce state spending by over $37 million over two years. If enacted, Virginia (again, one of the 10 wealthiest states) would be competing with North Dakota for the most restrictive income eligibility in the nation for our CHIP program.
Fortunately for supporters of the program, the Virginia Senate did not seek to reduce FAMIS eligibility in their version of the state budget (In fact the Senate passed, but did not fund, legislation to increase FAMIS eligibility to 225% FPL.). Thus, in a compromise, the final budget deal reached on March 14 postponed the cuts to FAMIS until July 1, 2011 and stated that the reduction would be completely reversed if Congress passed a six-month extension in enhanced federal Medicaid assistance that could provide Virginia approximately $370 million in additional federal funding for the overall program.
The news improved even more on March 23 when President Obama signed the Patient Protection and Affordable Care Act (ACA). The maintenance-of-effort requirement in the new law will protect state Medicaid and CHIP programs from eligibility and benefit cuts until the ACA’s coverage expansions begin in 2014.
Yet, although a significant reduction was averted in 2010, challenges still remain. Virginia’s Attorney General and Governor are pursuing questionable lawsuits and challenges to the ACA, and a new law was enacted that seeks to prevent any federal mandates to purchase health insurance. Certainly, attempts to circumvent the maintenance-of-effort are possible in our state. So, while our modest FAMIS and Medicaid coverage for kids and families remain protected for now, we will still need to stay vigilant against efforts to weaken them in the coming years.
(* Jill Hanken with the Virginia Poverty Law Center contributed to this post.)
The views expressed by Guest Bloggers do not necessarily reflect the views of the Center for Children and Families.
