However, the new federal healthcare reform law requires states to continue funding healthcare programs at current levels or forfeit all future health funding aid, including Medicaid.
It's a dilemma because if the state's legislators cut the program, they risk losing up to $15 billion a year of matching federal Medicaid and CHIP funds, Stephanie Goodman, spokeswoman for the Texas Health and Human Services Commission, told DrBicuspid.com.
Lawmakers have already approved a 1% reduction in payments from the CHIP program to dentists, doctors, and pharmacists. Those cuts will save $2 million in state money next year while denying providers an additional $3.7 million in federal funds, Goodman said.
Under the CHIP program, state and federal governments subsidize insurance coverage for children whose parents make too much to qualify for Medicaid but too little to afford private health plans.
At its peak in 2003, nearly 530,000 children were enrolled in the program, Goodman said. In prior cutbacks, state leaders instituted new rules making parents submit paycheck stubs and reapply for benefits every year. There also are tight limits on how nice a car the parents can drive.
Texas has the highest rate of uninsured children in the U.S.
Legislators are also considering cuts to children's preventive dental services provided to 9,000 low-income Texas children each year, according to a story in the Dallas Morning News.
Other states are facing similar dilemmas as they cope with huge budget deficits.
Earlier this year, Arizona lawmakers, facing a $2.6 billion shortfall, opted to shut down the CHIP program -- known as KidsCare -- and end Medicaid benefits. The KidsCare program, which provides medical and dental coverage to 38,000 low-income children, was slated to end in June, and Medicaid benefits for some 310,000 adults were to be discontinued in September.
But in May, Gov. Jan Brewer signed a bill that restored funding to the Arizona Health Care Cost Containment System, the state's Medicaid program, and reauthorizes the KidsCare program. The bill directs $9 million to KidsCare and reinstates adult Medicaid services.
And last October, California's CHIP service, the Healthy Families Program, began denying dental services for some children and pregnant women.
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