About Health Insurance for Kids

    Federal Decisions Could Mean Big Changes

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    Are your children among the roughly 600,000 in Virginia who have health insurance through FAMIS or FAMIS Plus?* These are Virginia’s names for the federal Children’s Health Insurance Program (CHIP) and Medicaid, respectively. Or are you among the thousands of Virginia families who purchased a family health insurance plan through the Federal Marketplace created by the Affordable Care Act (ACA), also known as Obamacare? If so, changes could be on the way.

    The debate on whether and how to repeal and replace the ACA has received a great deal of media coverage because any change will have far-reaching consequences for the health insurance market.

    Two other federal policy decisions are receiving much less coverage, but they could have an even greater impact on children. The federal government is exploring a reduction in its spending on Medicaid. In the next few months, Congress must also decide whether to continue funding CHIP. Any changes to Medicaid or CHIP could result in a loss of health insurance for thousands of Virginia’s kids.

    Medicaid/FAMIS Plus

    Medicaid was created by the federal government more than fifty years ago to combat poverty by providing health insurance to the most low-income and vulnerable Americans, including children. Virginia and the federal government evenly split the costs of the program, which can be scaled up or down based on economic conditions or public health needs. States have some flexibility to determine who is eligible within the mandated categories
    and which benefits are covered.

    In Virginia, children are eligible for FAMIS Plus if their families have an income up to 143 percent of the federal poverty level. (The federal poverty level in 2017 is $24,300 for a family of four.) Through FAMIS Plus, well-child visits and medically necessary treatments for children are covered, which is of critical importance to children who have severe or chronic health conditions. Without health insurance, children miss more school, are less likely to get medical treatment, and are more likely to end up in emergency rooms.

    In Washington, DC, policymakers are discussing two options to reduce federal spending on Medicaid, both of which would convert Medicaid from being a program that can respond to economic and health challenges in the states to one with fixed funding. This fixed amount of federal funding would vary by state and would either come through a block grant (lump sum) or a “per capita cap” (fixed amount per individual). The amount of funding a state receives would likely be based on historical spending, a disadvantage to Virginians, as our state spends less per capita on its Medicaid program than forty-six other states.

    Though touted by proponents as a way of giving states more flexibility, the block grant would force Virginia’s lawmakers to choose between making up the loss of federal funds with state general funds – a challenge because states must balance their budgets – and making significant cuts to the program. Virginia’s likely cuts would include:

    • Reducing reimbursement rates to providers, which could cause waiting lists as fewer doctors might take FAMIS Plus

    • Cutting certain services (e.g. dental or mental health care) from being covered by FAMIS Plus

    • Reducing or eliminating coverage for certain categories of individuals (children, elderly, those with disabilities).

    CHIP/FAMIS

    CHIP, created with bipartisan support twenty years ago, is designed for working families who cannot afford or do not have access to employer-sponsored insurance, and it builds on the Medicaid program. In Virginia, children are eligible for FAMIS if the family income is between 144 percent and 200 percent of the federal poverty level. Many lower-income families experience fluctuating income due to seasonal or shift work. Families often move between these two health insurance programs, which are designed to provide a safety net to maximize children’s health and reduce costs to taxpayers.

    Federal funding for CHIP will end after September 2017 unless Congress takes action. The federal government currently pays 88 percent of the cost, and Virginia pays the balance. If Congress stops funding the program, states would be left to take on the costs of maintaining it, or would have to reduce eligibility. Thousands of Virginia kids could lose health insurance under this scenario, and their families would not have the ability to pay out-of-pocket for health care.

    Share Your Story

    If your children are enrolled in FAMIS or FAMIS Plus, or a plan you purchased through the ACA Marketplace, their health insurance could very well be at risk. The most effective way to let Congress know how important your child’s health insurance is to your family is to share your story. At Voices for Virginia’s Children, we are compiling stories to share with Virginia’s two U.S. senators and eleven representatives; you can share yours by emailing it to: margaret@vakids.org. You can also look up and then contact your representative and Virginia’s two senators directly at whosmy.virginiageneralassembly.gov.

    Even if these policy decisions don’t affect you personally, most of us want Virginia to continue to be a great place to live and work for future generations. To achieve that vision, we need to raise an educated, productive, and healthy workforce. Research has shown that children who have health insurance are more likely to succeed in school, and be healthier and have higher incomes in adulthood, than similarly situated children who do not have health insurance. Investments in children’s health today can reap rewards for all Virginians in the future.

    *If your kids are covered by FAMIS or FAMIS Plus and you live in Central Virginia, they are enrolled in one of the following managed care programs: Aetna Better Health, Anthem Healthkeepers Plus, Optima Family Care, and Virginia Premier.

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    Margaret Nimmo Holland
    Margaret Nimmo Holland is a mom and the executive director of Voices for Virginia’s Children, a nonprofit, non-partisan organization focused on informing lawmakers what kids need, based on data about child well-being and research showing what works to improve their lives.