Texas Cutting Back on Poor Children’s Health

This state, which already has the nation’s highest proportion of residents without health insurance, is about to acquire a new distinction.

With its Legislature on the verge of approving a budget that closes a $9.9-billion deficit without raising taxes, Texas soon will also lead the nation in the number of low-income children dropped from publicly financed health insurance.

Destynn Hatcher -- who at 19 months old has a list of medical conditions, specialists and prescriptions as long as he is tall -- could be one of them.

He was born with a hole in his heart. At six weeks, he nearly died from a lung infection. He has battled pulmonary stenosis, pneumonia, apnea, severe dysphagia, pituitary dwarfism and a “failure to thrive.”

Yet thanks to a federal-state health insurance program for the children of the working poor -- which pays for his surgeries, feeding tube, daily growth hormone injections, expensive medical equipment and regular visits to specialists -- Destynn recently gained a pound and grew 2 inches.

Half-standing, half-sitting in his baby walker, Destynn is alert and smiling. Blond hair is beginning to cover his misshapen head. If it weren’t for the Child Health Insurance Program, Destynn’s mother says, “he wouldn’t be here.”

But both houses of the state Legislature, as well as a budget conference committee, have approved a plan to impose stricter income limits and a stripped-down benefits package on CHIP, as the program is known.

Even if Brandy Hatcher’s family still qualifies, CHIP will no longer cover much of the treatment and medical supplies Destynn and his four siblings depend on.

Nine-year-old Jessica, who has bipolar and attention-deficit disorders, will lose access to psychiatric care. Treynor, 3, who suffers from pervasive developmental disorder, will no longer get the leg braces and physical therapy he needs to walk properly. And Destynn will not receive expensive medical equipment or the nursing help that his mother -- whose nerve injury confines her to a wheelchair -- needs to learn how to use it.

Texas is one of more than 40 cash-strapped states, including California, that are cutting benefits and eligibility for Medicaid, the federal-state health program that covers 47 million poor Americans. Rising costs and a weak economy have made health care the fastest-growing item in most state budgets.

Far fewer states are cutting CHIP, the widely praised program created by Congress in 1997 that gives states matching funds to insure children whose parents earn too much to qualify for Medicaid but too little to afford private coverage.

But in Texas, the health-care ax is falling most heavily on children of the working poor.

The state’s new two-year budget will keep about 170,000 Texas children off the CHIP rolls -- fewer than the 220,000 considered likely just a week ago but still a full third of those now in the program. And the parents of children still eligible for CHIP will face increases in their premiums and co-payments and a dramatic decline in the range of covered benefits.

While Texas and other states are cutting their health-care spending, Congress is considering a Bush administration proposal that would dramatically alter the states’ Medicaid relationship with Washington.

The current structure gives states a strong financial incentive to spend their own money on Medicaid and CHIP, by putting up matching money. Texas, for example, gets $3 from CHIP and about $1.60 from Medicaid for each dollar it spends on its own.

Under the Bush proposal, Washington would give each state a lump-sum Medicaid payment unrelated to the size of the state’s impoverished population or the level of its own spending.

Advocates of government spending on health care worry that that could lead to deeper cuts -- and growing numbers of Americans left without health insurance. Supporters of the Bush plan, however, argue that Medicaid spending is inefficient and out of control. They say the reforms will encourage states to tailor their programs to meet the most basic health needs of their poorest residents.

“The process was not easy, and the decisions were difficult,” Texas Gov. Rick Perry said last week. “But Texas has produced a budget in the same way millions of families and businesses all across our state do -- by establishing priorities and living within our means.”

Early in the budget process, a state House subcommittee proposed eliminating CHIP. In Texas, families earning up to $36,800 for a family of four -- double the federal poverty level -- qualify. And so the state’s 513,000 CHIP kids are not all the poorest of the poor. Better to save the $428 million the state spends annually on CHIP, the lawmakers reasoned, and avoid deeper cuts in Medicaid services for the poorest elderly.

The Legislature ultimately decided to shrink CHIP by making it more difficult for families to qualify. New asset tests, stricter definitions of income, and a 90-day waiting period to join will leave many currently eligible families out of the program.

The new state budget also reduces home-health services for 100,000 low-income elderly and disabled Texans, eliminates temporary catastrophic health coverage for about 10,000 families and denies prenatal care to 8,300 low-income pregnant women per month.

The share of Texans who were uninsured averaged 23.2% in 2001 and 2002, according to the most recent information from the Census Bureau. New Mexico was next at 22.4%, followed by California at 19%.

Bobby and Sharon Kolodziejczyk don’t need lessons in setting priorities. They know what it means to sacrifice for their children’s health.

“When they need supplies, it’s a matter of selling something,” said Bobby, a 47-year-old mechanic who makes $23,400 a year -- before taxes.

“Or not eating as much,” added Sharon, 51, who earns $8 an hour at a temporary job.

The couple have sold houses, changed jobs and moved all over South Texas in search of the right mix of income, health care and living costs needed to support their family and maintain the health of Kasia, 16, and Robert, 14, who have Type 1 diabetes.

They seem to have found it in the small town of Victoria, where their wood-frame house sits on concrete blocks backed up against the railroad tracks.

“When your blood sugar does this,” said Kasia, moving her right hand up and down, “your emotions do this,” again making the W shape with her hand. “With the [insulin] pump, it’s more like a normal person. You can think, you can study easier.”

Bobby Kolodziejczyk marvels at how well his children are doing now. But even with two insulin pumps, which cost $5,000 each and were donated by a nonprofit group, the Kolodziejczyks’ lives require constant balancing.

Bobby gets subsidized health insurance from his employer, but can’t afford premiums for the rest of the family.

With CHIP, Kasia and Robert are insured for a small enrollment fee, a $15 monthly premium, $10 or $20 co-pays for doctors visits, prescriptions and tests, and $50 for an emergency room visit or hospital stay.

Without CHIP, the monthly medical bill for each child would total at least $800.

Under the new state budget, the family will remain eligible if Sharon quits her job. But some of the kids’ supplies and tests will no longer be covered, and their co-pays will go up.

Sitting in their unfinished living room on a hot spring afternoon, the family tried to make the best of it.

“We’re kind of semiprepared,” Bobby said, “but there are going to be a lot of other children who are going to suffer -- big time.”

That is the concern of Dr. Mary Dale Peterson, a pediatric anesthesiologist and medical director of Driscoll Children’s Health Plan, an HMO affiliated with South Texas’ only children’s hospital.

“What do we do,” she wondered, when a child needs surgery, but the postoperative physical therapy is no longer covered? “What do we do with a child who’s attempted suicide” when CHIP no longer covers mental health services?

County officials across Texas, who were among the strongest opponents of the cuts, are bracing for the additional costs they will be forced to absorb as children once covered by CHIP begin flooding emergency rooms and public hospitals.

“Every dollar we don’t spend in preventive care will later cost us $20 in acute [emergency room] care,” said Rick Merrill, president and CEO of Driscoll Children’s Hospital.

But a high-ranking state official, who asked not to be named, said that given the state’s finances, “it’s all the more impressive that the outcome was not as drastic as people had feared.” The “pain to come in implementing these kinds of changes,” the official said, “will depend on how humanely we do it.”