You asked about the feasibility of the state providing health care coverage, such as HUSKY, to staff working in state-funded child care centers.

SUMMARY

Without surveying the 112 state-funded child care centers, it is impossible to say whether it is feasible for the state to offer HUSKY-type health insurance to people working in them. A survey would be needed to determine (1) a point-in-time number of staff; (2) how many of them already have coverage, either through their employer or a covered spouse; and (3) how many of them would qualify based on income.

Although the Department of Social Services (DSS) estimates that between 1,400 and 1,600 individuals work in these centers, we do not know how many of them currently have health care coverage. In the meantime, we have anecdotal evidence that some employees of state-funded child care centers receive health coverage through the towns that control the center's funding.

In other such centers, the employees may receive coverage through the state's community action agencies (CAPs). (State law allows CAP agencies to tap into the state employee health insurance program. )

A report by the Child Care Legislative Collaborative claims that in 2000, the average child care employee working 40 hours per week made $ 17,317 a year. This salary is just under 200% of the federal poverty level (FPL) for a single person and 115% of the FPL for a family of three.

If this salary represents what state-funded child care staff are earning, it would appear that most staff would qualify for the state's existing subsidized adult health care program. (Childless people are not eligible for this assistance. ) To cover parents or caretaker relatives with higher incomes, the state could raise the program's income limits by applying for a federal State Children's Health Insurance Program (SCHIP) waiver and be eligible for higher federal matching funds for program expenditures.

For childless adults, the state could create a new HUSKY coverage group. In order to claim federal funds for this expansion, the state would need to seek a different federal waiver authorized by the federal Health Insurance Flexibility and Accountability (HIFA) waiver program.

The governor's Mid-Term Budget Adjustments propose a premium assistance program, which could offer limited assistance to uninsured child care workers, with or without children, with incomes up to 185% of the FPL. This alternative approach might also qualify for a HIFA waiver.

Kim Rinehart, a state child care advocate, reports that at least three states subsidize the health insurance costs for their child care center staff.

ADULT COVERAGE

Because HUSKY (both A and B) is primarily designed to cover children, and their low-income parents and caretaker relatives, the state's child care workers must presently have children to qualify for HUSKY-related coverage. State law offers adult Medicaid (also known as Section 1931) coverage to working parents and caretaker relatives of children enrolled in HUSKY A if their income is no more than 150% of the FPL (this is $ 22,530 for a three-person household). (Children are covered as long as family income does not exceed 300% of the FPL. )

Adult Coverage Expansion Proposals

To provide coverage to adults with children at higher income levels, the state could expand Section 1931 coverage by seeking an SCHIP waiver. This would allow more adults to be covered (up to 300% of the FPL) and would provide the state with a 65% federal match for program expenditures (the state would be able to tap into its unclaimed SCHIP funds). (Section 1931 expenditures are currently matched at 50%. ) To cover all adults, the state could create a new HUSKY-related coverage group but would need to apply for a separate HIFA waiver to use the unspent SCHIP funds.

HB 5023, the governor's DSS budget implementation bill, envisions the state providing limited coverage through premium assistance to childless adults and adult caretaker relatives of children under age 19 in families with incomes up to 185% of the FPL who have access to employer- sponsored coverage.

Presumably, some child care center staff would qualify for any of these options.

Federal HIFA Waiver Demonstrations. To offer the expanded coverage to childless adults, the state could apply for a relatively new federal waiver program, HIFA. In August 2001, the Centers for Medicare and Medicaid Services (CMS), the federal agency that administers Medicaid and SCHIP, offered guidance on using HIFA waivers to expand coverage for their uninsured populations. The guidance divides these uninsured people into three groups:

1. mandatory (i. e. , people for whom states must offer Medicaid coverage, such as children under age six and pregnant women with family incomes less than 133% of the FPL, and, in most states, elderly and disabled people receiving SSI;

2. optional (i. e. , people whom states can include in their Medicaid programs without a federal waiver, such as the "medically needy"; and

3. expansion (i. e. , people whom states cannot cover in either Medicaid or SCHIP without a waiver, such as childless, non-disabled adults under age 65.

The initiative does not include any new federal funds for these expansions. Rather, it allows states to reduce spending on existing Medicaid and SCHIP programs by limiting benefits; charging co-payments, deductibles and premiums; and capping the number of people who can enroll in such programs. It also allows states to use unspent SCHIP funds. Although states may not alter their benefit packages for people in the mandatory group, HIFA allows them to be less generous with their optional and expansion groups.

In general, CMS suggests that states focus their HIFA initiatives on the uninsured with incomes below 200% of the FPL. It likewise "strongly encourages" state proposals that integrate Medicaid and SCHIP funding with "private health insurance options. " One of the more appealing features of HIFA is that CMS promises a simple application and expedited review of these new waivers. With other 1115 demonstration waivers, the application process can drag on for months, if not longer.

To the best of our knowledge, only Arizona has an approved HIFA waiver, which permits it to use SCHIP funds to cover childless adults with incomes up to 100% of the FPL. The waiver covers parents of children enrolled in the state's Medicaid and SCHIP programs with incomes between 100% and 200% of the FPL. A CMS fact sheet about Arizona's plan indicates that the state's first and second coverage priorities are children and their parents, respectively. Childless adults rank third.

OTHER STATES THAT SUBSIDIZE THEIR CHILD CARE CENTER WORKERS' HEALTH INSURANCE

Kim Rinehart of All Our Kin, Inc. testified at the Human Services Committee's March 7, 2002, public hearing about Rhode Island's five-year old program, which offers RiteCare (state's subsidized health insurance program) benefits to family child care providers who receive at least $ 1,800 over a six month period in state child care subsidies. The legislature extended the program in 1999 to include employees of licensed child care centers in which the center pays a portion of the employees' health insurance costs and makes a commitment to serve low-income children (40% of enrolled children must be getting state child care subsidies). The state pays the lesser of 50% of the premium costs or $ 85 per month. (We are attempting to determine the percentage of that state's "eligible" child care center staff who have enrolled in the program. )

Rinehart also testified that Michigan provides "baseline HMO-like health care coverage" to child care center employees, while North Carolina reimburses up to one third of the cost of individual health insurance coverage for people "working in the child care field. "

RC: ts