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Life Health > Health Insurance > Life Insurance Strategies

Pa. Law Expands Child Health Coverage Subsidies

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Pennsylvania Gov. Edward Rendell has signed H.B. 2699, a bill that will increase eligibility limits for subsidized coverage from the state’s Children’s Health Insurance Program.

Families of 4 may be eligible for subsidized CHIP coverage even if they earn as much as $60,000, and families that have a hard time finding affordable private coverage for their children may be able to buy into the CHIP even if they earn far more than the limit for subsidized coverage, according to the text of the new law.

The state Senate approved H.B. 2699 by a unanimous vote, and the state House approved it 176-19.

Rendell is hoping to put CHIP expansion into action in January 2007.

Critics of the program at the Pennsylvania Association of Health Underwriters, Pittsburgh, have conceded that the CHIP expansion bill was politically unstoppable, but they argued that CHIP expansion could backfire by decreasing employers’ and insurers’ incentive to offer private dependent coverage.

The Pennsylvania CHIP now is free for children from families with annual incomes under 200% of the federal poverty level, or about $40,000 for a family of 4. The program offers subsidized coverage for families with annual income up to 235% of the federal poverty level, or about $47,000 for a family of 4, according to Rendell administration officials.

H.B. 2699 will make subsidized CHIP coverage available for families earning up to 300% of the federal poverty level, or $60,000 per year for a family of 4, officials say.

The monthly cost would range from $36 per child for a family with an annual income of $40,001 to $57 per child for a family with an annual income of $60,000.

Families that “cannot find or afford private health insurance for their children who are earning above 300% of the FPL ($60,000 a month for a family of 4)” can pay the full price for CHIP coverage if they can show that coverage was denied due to a pre-existing condition, or the cost of private coverage would cost more than 10% of the family’s annual income, or the cost of private insurance would be 150% more than the cost of CHIP coverage, officials say.

If employer-sponsored coverage is available but the parents cannot afford the premiums, the state may help the family pay for the employer-sponsored coverage, officials say.

To discourage parents from dropping private coverage, the program will require many families to “go bare” for at least 6 months before enrolling in the expanded children’s insurance program, officials say.

Lawmakers have budgeted only $4.5 million for the program, but the state hopes to use that cash to draw down additional federal funds, officials say.


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