Follow-up Report

Virginia wins CHIP approval; limited abortion benefit

If your state is having problems getting your programs through regulatory channels, you might want to tap available congressional support. That seems to have worked in one recent case.

Virginia will begin covering the health care costs of up to 63,000 children because of a high-level political compromise that ended a six-week standoff between state and federal officials that ultimately hinged on payment for some teen abortions. (See "Land mines," State Health Watch, October 1998, p. 2.)

Virginia says the Health Care Financing Administration’s (HCFA’s) approval of the state’s new child health insurance program (CHIP) will allow the state to draw almost $88 million in federal funds to help pay for the coverage over the next four years. Federal estimates are lower—$68 million in federal aid to help cover more than 54,000 children by 2000.

Federal and state officials were in agreement that Virginia’s children’s health insurance plan would cover abortion in cases in which a woman’s life was threatened, but disagreed on extending such coverage in the event of rape or incest. Virginia had proposed a benefit package that was a Medicaid lookalike and argued that it did not need to cover abortion in the event of rape or incest because such services are provided to Medicaid recipients through a separate state-only fund.

HCFA’s main argument was that the federal Hyde Amendment required the extended coverage for abortions, and thus for any CHIP plan that purported to be a Medicaid "look-alike." The argument became moot when, instead of a Medicaid look-alike, Virginia officials proposed a CHIP benefit plan that was actuarially equivalent to the plan offered to state employees.

The program was set to begin enrollment immediately after the compromise was announced.

The Wall Street Journal said the federal approval was part of the Clinton administration’s efforts to win Senate approval for the nomination of Jane Henney, M.D., to lead the Food and Drug Administration.

Conservatives trade concessions

State and federal officials don’t agree on how it happened, but the impasse was broken after high-ranking conservatives in Congress, including Virginia Rep. Thomas J. Bliley Jr., R-7th, traded concessions with the Clinton administration on the abortion issue.

Federal regulators also had questioned Virginia’s use of health insurance premium taxes to help pay for the program. The state’s strategy was approved as presented, a spokesperson in the Virginia Department of Medical Assistance Services said.

Richmond Times-Dispatch, Oct. 23, and staff reports