Articles

State must fund PeachCare gap:
Worthy insurance program for children
requires state, federal financial solution

Editorial by Mike King
Atlanta Journal-Constitution
February 11, 2007

In Georgia, 273,000 children -- virtually all in families earning less than $48,000 a year -- depend on PeachCare for their health insurance. But they are now at risk of losing their health care because of the political brinkmanship between Congress and lawmakers under the Gold Dome.

This issue demands more leadership and less gamesmanship.

The state has already threatened to stop enrolling children in the program as of March 11 because state officials have exhausted the federal money set aside for it. Georgia's hesitancy to cover the shortfall for a few months is unfortunately indicative of the weak support for the program shown by the administration of Gov. Sonny Perdue.

This "crisis" over PeachCare has been manufactured; Congress is months away from re-authorizing the 10-year-old program, called State Children's Health Insurance Program, or SCHIP. With Congress and governors widely praising it for helping reduce the ranks of the uninsured, there's little doubt it will be renewed. When Congress passed the initiative in 1997, all 50 states jumped at the chance to launch their plans, which provide affordable health insurance to children in working families. The federal government put up $40 billion in matching funds in its first 10 years -- enough to pay at least 70 percent of the cost in most states, including Georgia.

While Perdue and state legislators have spent the last few weeks doing their Chicken Little best to persuade voters that federal inaction has put the PeachCare program in jeopardy, state officials have known the shortfall was coming for months. And they have options to temporarily fund the program with state money while it awaits federal action.

The Legislature could approve a one-time $60 million to $80 million appropriation in the supplemental budget for this year and another $50 million to $70 million in the fiscal 2008 budget. Or, the state could cover the anticipated loss by switching many of the PeachCare enrollees to Medicaid, which has a nearly identical benefit plan for children in very low-income families. This might be the better solution; it would help prevent similar shortfalls in the future.

The state's unwillingness to take either of these steps is troubling. It illustrates the indifference Perdue's administration has shown to the program, and it belies claims that, by pushing Congress to act, the state is looking out for the working class families.

Two years ago, the Perdue administration decided to lock children out of PeachCare if their parents missed a single premium payment, refusing to let their children re-enroll for three months -- a policy that at one point put 91,000 children at risk. State health officials eventually reversed the policy, but the failed effort seemed designed to cull enrollment. The same year, the state eliminated oral surgery benefits under PeachCare in an effort to save $1.8 million.

Taken together, those decisions leave many child-health advocates wondering how committed the state is to PeachCare, especially if Congress insists on states picking up a larger share of the costs. That's the genuine sticking point -- whether the federal government's subsidy will continue to be so generous in the future. The Bush administration and some Republicans in Congress, including members of the Georgia delegation, apparently feel more of the burden should fall on the states since they get to set their own eligibility standards.

Perdue and the state Legislature should consider PeachCare an excellent investment. More than 50,000 kids have been enrolled in the program over the last two years alone -- their families coming to rely on its good benefits and relatively low costs. The state now has the fourth largest children's health plan in the country.

That means that some 273,000 Georgia children are no longer included among the 17 percent of the state's residents who are classified as "uninsured." They no longer show up at hospital emergency rooms seeking routine care for childhood infections or chronic care for asthma or diabetes. That, in turn, relieves hospitals of having to shift some of the cost of their care over to private insurers, which helps holds down premium increases for those of us lucky enough to be covered by employer-sponsored plans.

Congress and the state Legislature should quit playing games with an initiative that is working to make American children healthier. Georgia should put up the money for whatever gap is created by the temporary loss of federal funds, and Congress should move quickly to reauthorize the program on a permanent basis.

-- Mike King, for the editorial board (mking@ajc.com)

By the numbers

273,000: Georgia children 18 years of age and younger enrolled

73%-27%: The federal-state split that finances the health plan

$48,000: Maximum yearly income for a family of four to qualify

$30,000: About 70 percent of families with two or more children covered by PeachCare earn this much or less

$70: Maximum monthly premium for two or more children

$0: Co-payments and deductibles for most benefits

(Source: Kaiser Family Foundation)

Copyright 2007 The Atlanta Journal-Constitution. More information: www.ajc.com.

To learn more about the PeachCare funding crisis, click here.

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