State earns bonus for child insurance

A $17.6 million windfall from the federal government could prevent thousands of children in Washington from losing their health insurance in March if the state decides to spend the money on the Apple Health for Kids program, which has been targeted for cuts.

Washington was one of 15 states to receive performance bonuses for enrolling more children in health insurance, the U.S. Department of Health and Human Services announced Monday.

However, the announcement comes two weeks after Gov. Chris Gregoire reluctantly proposed eliminating coverage for about 27,000 children whose citizenship has not been documented.

The federal bonus comes without strings attached, and it will be up to lawmakers to decide whether to apply it to Apple Health for Kids to retain those 27,000 on the state’s health insurance program for children, according to the Children’s Alliance, a nonprofit advocacy group.

“We think this performance bonus is a sensible way to continue providing health care for kids,” said Jon Gould, deputy director of the Children’s Alliance.

State offices were closed Monday as part of budget-cutting furloughs, and the governor’s office could not be reached for comment on whether Gregoire intends to propose using the bonus to avert cuts in children’s health.

Funding for the annual bonuses to the states was included in the Children’s Health Insurance Program Reauthorization legislation signed into law by President Barack Obama in February 2009. They are contingent on states showing progress on covering uninsured children.

Washington created Apple Health for Kids in 2007 with the goal of insuring all children in the state. Though that goal has not been reached, the program insures 718,000 children through a combination of federal, state and family contributions.

The 27,000 children who will be eliminated from coverage as a result of proposed budget cuts do not qualify for Medicaid or the federal Children’s Health Insurance Program because of their citizenship status. Cutting them will save the state about $9 million through June and $59 million in the next two years.

However, eliminating these children from coverage is expected to have long-term consequences for communities and the state’s hospital system, advocates say.

The Children’s Alliance would like to see the federal bonus applied to children’s health to avert the cuts through June, and find a way to sustain the program in the coming biennium.