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Bush Program Suffering Setbacks

August 26, 2000

AUSTIN, Texas (AP) _ A children’s health insurance program created by the state and promoted by Gov. George W. Bush as a successful public-private partnership is getting out of the insurance business.

Texas Healthy Kids Corp., cited as a positive example by the Bush campaign as recently as Sunday, will stop insuring children on Sept. 15, said Durquia Guillen, director of operations.

Campaigning for ``prosperity with a purpose,″ Bush, the Republican presidential nominee, proposes more reliance on charities and private institutions to pick up where government leaves off. As president, Bush has said, he would dedicate $8 billion in tax incentives to encourage volunteerism and charity.

Vice President Al Gore’s campaign accused Bush of not truly addressing children’s health issues in Texas.

``Children’s health insurance is a perfect example where Bush has been negligent but is telling the nation that he’s wonderful,″ said Gore spokesman Doug Hattaway. ``It certainly raises questions as to whether Governor Bush even knows or cares what’s going on with children’s health insurance in his own state.″

Faced with a lack of state and private money, increasing insurance rates and competition from a new government program, Texas Healthy Kids will start referring needy children to private health insurance companies or other public programs, Guillen said.

``We’re in transition,″ Guillen said. ``I don’t know what’s going to happen as we keep evaluating, but what we do know that there are a lot of affordable choices out there for families that were not always out there.″

One of those choices is CHIP, the Children’s Health Insurance Program, which Bush signed into law for Texas in 1999. It’s a larger and cheaper program funded by federal and state money that came into existence after Texas Healthy Kids Corp. was formed in 1997.

About 8,000 children will be affected by Texas Healthy Kids getting out of the insurance business. Those youngsters will be transferred to CHIP or referred to non-subsidized private insurance carriers, Guillen said, stressing that the organization will keep working with needy families to help find health coverage.

``We’re not closing our doors. We’re not going to be shutting people off so that they’ll wake up one day and not have health insurance for their children,″ Guillen said.

Bush’s campaign on Sunday referred to the Healthy Kids Corp. in countering criticism about Texas’ high rate of uninsured children. Texas has the nation’s second-highest rate of uninsured children, accounting for some 1.4 million of the nearly 11 million nationwide who lack health insurance. Only Arizona has a worse rate.

``Uninsured children from families with incomes too high to qualify for the CHIP program can purchase low cost coverage through the Texas Healthy Kids Corporation. The corporation was created in 1997 through legislation signed by Governor Bush,″ a Bush campaign news release said.

A Bush campaign spokesman referred questions to Bush’s state spokesman Mike Jones.

``Is it fair to tout it? Yes, Texas Healthy Kids obviously was created before the state got an opportunity to implement a CHIP program and during that time frame it served a useful purpose,″ Jones said Thursday.

Jones said there are several successful public-private partnerships working in Texas, including drug rehabilitation and adoption programs.

Since 1997, Healthy Kids Corp. has been awarded $15.4 million in public money and has used $10 million in private funds to subsidize premiums for uninsured children.

While the government-funded CHIP program covers children whose parents earn up to 200 percent of the federal poverty level, Texas Healthy Kids did not have income limits.

Under CHIP, parents pay a $15 annual fee and monthly premiums as low as $18. Healthy Kids premiums ranged from $58 to more than $100 a month.

Texas Insurance Commissioner Jose Montemayor said he is attempting to get private insurers to offer coverage to the children who could end up uninsured with the phasing out of Healthy Kids insurance.

So far, about three companies have agreed to work with the insurance department, Montemayor said.

``It’s really going to be a matter of the department directly stepping into the shoes of where Healthy Kids was,″ Montemayor said.

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