FAMILYCARE ACT OF 2001

Enrolling Parents in Medicaid and the Children’s Health Insurance Program (CHIP)

The FamilyCare Act gives states the option to provide health insurance coverage to the parents of children enrolled in Medicaid and CHIP. In order to be eligible for new federal money under the FamilyCare Act, states must first expand eligibility to all children whose parents’ income is less than 200% of the federal poverty level ($29,260 for a family of three) and eliminate any waiting lists or eligibility restrictions for children in CHIP.

	Beginning in FY 2002, states will receive an enhanced match for parents covered beyond the state’s January 2000 eligibility level for parents. Parents may be covered up to the same eligibility levels as children.
	Beginning in FY 2005, all states will be required to cover parents up to at least 100% of poverty, so that all parents and children below poverty will be guaranteed Medicaid coverage. At this time, states will receive an enhanced federal match for covering all children, pregnant women, and parents above the mandatory minimum Medicaid levels.

Health Insurance for Families Moving from Welfare to Work

The FamilyCare bill allows individuals leaving welfare for work to keep their Medicaid health insurance coverage for up to one year by making the Transitional Medicaid Assistance (TMA) program permanent. States also have the option to provide TMA to more families.

Grant Program to Expand Health Insurance Coverage

The FamilyCare bill creates a grant program of $100 million per year over five years for state demonstrations that expand health insurance coverage to the uninsured through market innovations. Possible demonstrations include alternative group purchasing or pooling arrangements, individual or small group market reforms, and subsidies to individuals, employers, or both for obtaining health insurance.

Additional Coverage Options

The FamilyCare bill provides states with new incentives and options to extend coverage to 19- and 20-year-olds, first-time pregnant women, and restore or create health benefits for legal immigrant children, pregnant women, and parents through CHIP and Medicaid.

Outreach and Enrollment Improvements

The FamilyCare bill allows additional organizations, including schools, homeless shelters, and WIC agencies, to determine whether children (or entire families) are presumptively eligible for Medicaid or CHIP. To ensure that families do not fall through the cracks, states are required to check if children and parents who lose coverage under Medicaid are eligible for CHIP, and vice versa.

Simplified Application Requirements

States must use a single, simplified application for children enrolling in either Medicaid or CHIP and make the application and enrollment procedures the same for both programs.

Total Cost:The bill provides $50 billion of new federal money over 10 years for coverage expansions. Funding will be allotted to states under the same formula as CHIP. There will be additional costs as a result of finding and enrolling more children who are already eligible for Medicaid or CHIP, as well as some of the other provisions in the bill.