COD E R E D

dollar spent. 237 Texas spent almost $330 million on SCHIP in FY 2004, including both federaland state funds. 238 As of March 1, 2005, there were 328,350 children enrolled in SCHIP. 239This represents a steep decline from September 2003, right before cost-saving changes wereimplemented, when enrollment stood at 507,259. 240 To qualify for SCHIP, children must beyounger than 19, U.S. citizens or legal residents, not eligible for Medicaid or state employeecoverage, not have private insurance, and have a family income below 200 percent of thefederal poverty level. 241 Families must also have assets within allowable limits (liquid assetssuch as cash and bank accounts, as well as some vehicle values, count toward the assets test,while real estate, retirement accounts, and certain other types of accounts are exempt). 242Families pay premiums, deductibles and co-payments that vary according to their income levels.The services that SCHIP beneficiaries can receive in Texas are the following:• Doctor, hospital, X-ray and lab services;• Well-baby and well-child visits;• Immunizations;• Prescription drugs;• Durable medical equipment and prosthetic devices ($10,000 limit per enrollment period);• Case coordination and enhanced services for children with special health care needsand children with disabilities;• Physical, speech and occupational therapy;• Home health care;• Transplants;• Limited mental health services;• Services that cover pre-existing conditions. 243Private Insurance Regulation and High-Risk PoolTexas has an 11.3 percent HMO penetration rate. Regarding small-group market reforms(applies to groups of 2 to 50), Texas does not apply community rating, limits pre-existingcondition exclusions (to 12 months exclusion and 6 months look-back time), and mandatesguaranteed issue and guaranteed renewability. Regarding individual insurance market reforms,Texas does not apply community rating, does not limit pre-existing condition exclusions, doesnot mandate guaranteed issue, and does mandate guaranteed renewability. The statemandates that patients have access to an external review board for filing complaints againsttheir health plans, and mandates mental health parity of benefits (for “biologically-based mentalillness”). Texas has a state COBRA expansion program of six months for small firms that arenot covered by the federal COBRA law. 244For people who have been denied health coverage or could not afford the coverage they wereoffered, Texas has a high-risk pool started in 1997 and funded by enrollee premiums andassessments on insurers. The pool is led by a nine-member board of directors and selects athird-party administrator to run the program. The number of people who can afford the high-riskpool, however, is limited since the premiums are higher than average. The premiums in thepool cannot exceed 200 percent of the standard rate for commercial individual health insurancefor the person’s gender, age and geographic area, and although rates were initially set lower,premiums are now at their legal maximum. Premiums do not cover all claims costs since theenrollees are high-risk and often need costly medical care, so losses beyond what are coveredby premiums are paid though annual and interim assessments on HMOs and other healthC-10