Kids' healthcare: Band-Aids still available

Sandy Prisk has peace of mind when her 7-year-old takes off on his bike speeding through their East Hartford neighborhood.

That's because if anything happens to him, he's still covered by Husky, Connecticut's health-insurance program for low-income children.

A year ago, she wasn't so confident that would be the case. Persistently large budget deficits prompted legislators from Connecticut to California to finally take the budget ax to the popular health-insurance program, known nationally as SCHIP, the State Children's Health Insurance Program. It was mostly spared in the first few rounds of belt-tightening, in part because of its popularity - few want to be accused of cutting health insurance for children - and also because of the federal match that brings in much-needed revenues.

But this year, even SCHIP was put on the budget block. Every state has either cut significantly or ended outreach to enroll more eligible children. Nearly half of the states have increased premiums or copayments, and a handful have even capped enrollment. Others like Connecticut, where the Prisks live, have ended coverage for low-income working parents. As a result, Sandy and her husband, Rob, will lose their insurance this fall.

But that said, most experts are surprised the damage was not worse. Indeed, some states even made the program easier to enroll in, despite budget woes. And at least one study shows the program fared much better than many others, like higher education and financial aid to cities and towns.

"It's indisputable that SCHIP experienced some serious cuts in the past year," says Ian Hill, a senior researcher at the Urban Institute, a nonpartisan think tank in Washington. "But so is the fact that the federal and state capacity to insure poor and near-poor children remains strong, and certainly stronger than it was in 1997 before SCHIP was created."

Last year, the number of children enrolled in SCHIP went up 7 percent, a rate far slower than in past years. Still, that brought the total number of children covered to more than 5 million, at least during some period of the year.

It's estimated there are as many as 4 million more children eligible but still uncovered. All their parents have to do is sign up.

But some analysts believe that could continue to become more difficult. While state budgets are expected to be in better shape next year, 18 are still projecting deficits, and 23 expect to spend more money on Medicaid than they have available, according to the National Conference of State Legislatures (NCSL). That could prompt even more SCHIP cuts.

"The picture is by no means as bleak as before, but I don't think we're entirely out of the woods yet," says Shelly Gehshan, a health-policy analyst at the NCSL. "We won't be until we're seeing happy days are here again in budgets all over the country."

For people like the Prisks, further cuts could strain already-tight family budgets. Sandy works part time as an outreach worker and a nurse's assistant, and Rob is a self-employed carpet layer. Together, they barely make ends meet each month.

The health coverage they all received under Husky allowed them to go to the doctor whenever it was needed, without worrying about how they would pay for it.

But with the changes Connecticut made to Husky, that's again becoming an issue. Right now, the family qualifies for Husky A, which gives them all free care. But because the state lowered income requirements, they may have to start paying a $50-a-month premium for the children. "If they lower the guideline again, I could fall into the category where I'd have to pay $75 a month, and that would be difficult," says Mrs. Prisk.

And in October, both she and her husband will rejoin the ranks of the uninsured. "I do feel the parents should be kept on it, for the kids sake," she says. "When you're really sick, try taking care of them."

That raises another issue about SCHIP. The program was originally designed to provide coverage for children. But because so much flexibility is built into it - which is one reason states like it so much - many expanded it to include the working parents of eligible children. It was seen as a way to provide insurance to the growing number of uninsured adults. That troubles some conservatives, who see this as a backdoor way to the ultimate provision of some kind of national health insurance. They'd rather see the SCHIP funds spent in the private market.

"These funds could be better utilized if you had SCHIP-enrolled children combing policies with the parents in a private-sector option," says Nina Owcharenko, a senior policy analyst at the Heritage Foundation in Washington. "It would be much more efficient."

Supporters of expanding government programs to cover the uninsured contend that even with government subsidies, the spiraling cost of health insurance would still price the working poor out of the private insurance market.

Either way, Sandy Prisk is just hopeful her children will continue to be eligible for Husky, and that the services it provides don't get cut back too drastically.

"On a personal level," she says, "I just think it's a great program."