WHEN AARON GARCIA was fifteen years old, in the summer of 2002, he caught a cold that he couldn’t seem to shake. Then came the fevers at night that soared past 103 degrees and left his sheets soaked with sweat by morning. A football player and champion wrestler at Monterey High School in Lubbock, Aaron was a sturdy, athletic kid who had rarely missed a day of school. But that fall he grew sicker. He developed a stubborn cough and swollen glands, which did not respond to antibiotics. A rash spread from his waist down to his ankles. His joints swelled, and sometimes he became so weak that he had to lean on his mother, Sandra, just to walk. Diagnostic tests—for leukemia, lupus, and HIV, to name a few—came back negative, but Aaron’s health continued to deteriorate. One night that winter, when his elbows and knees ballooned to twice their normal size, Sandra rushed him to the emergency room. “Please help him,” she begged the attending physician, as she had done with others before, to little effect. “I’m hoping you’re the doctor who can tell us what’s wrong.”

A biopsy of three of Aaron’s lymph nodes later revealed that he had Rosai-Dorfman disease, a rare disorder of the immune system that would require multiple rounds of chemotherapy. Left untreated, he risked kidney failure. For an affluent family, the diagnosis would have been daunting enough; for Sandra and her husband, Elias, who had lost their health insurance a year and a half earlier, it raised fears that Aaron might not receive the medical care he desperately needed and the specter of financial ruin. Elias had lost his job as a welder during the economic downturn in 2001 and, with it, the family’s health care coverage. After six weeks of unemployment, he had taken the only welding job he could find, earning $8.50 an hour for work that he had previously done for $12. At his old job, he had paid a $100 monthly premium for health insurance that covered Sandra and their three children. At his new job, adding just the kids to his health care plan would have required him to come up with $380 a month, more than his weekly paycheck. His wife made $47 a day as a teacher’s aide and received no health benefits.

Sandra and Elias found themselves stuck in the middle: too strapped to buy private health insurance for their children but not poor enough that their kids could qualify for Medicaid. “We were working all the time, and we could barely pay our bills and put food on the table,” Sandra told me late this summer as we sat in her living room, where the air conditioner was shut off despite the oppressive heat. But because of the Children’s Health Insurance Program, Aaron was able to get coverage. Under CHIP, the state, with the help of matching funds from the federal government, pays for private health insurance for eligible children of the working poor under an HMO plan. The Garcias paid a $15 annual premium, a $10 co-payment every time Aaron saw his pediatrician or oncologist, and $5 for each prescription. Without CHIP, the cost of his myriad doctor’s appointments, chemotherapy, medications, and hospitalizations—he has had pneumonia five times in the past two years—would have left them with medical bills totaling upward of $100,000. “We would have had to choose between not getting Aaron all of the medical treatment he needed or going bankrupt or both,” Sandra said.

Which is why it might seem puzzling that, at the same time CHIP was allowing families like the Garcias to access affordable medical care last spring, the Texas Legislature was gutting the program. In April 2003 the Legislature passed a bill that severely restricted CHIP’s eligibility rules, ratcheted up the price of its premiums and co-pays, diminished mental health coverage, and eliminated basic provisions like vision and dental benefits. The cuts took effect in September 2003, and since then, net enrollment has dropped by 159,114 children. So dramatic was the falloff in Texas that while the number of kids covered by CHIP increased in 37 states across the country during the second half of 2003, the overall rolls dropped for the first time in the program’s six-year history, plummeting by more than 50 percent. Texas alone accounted for more than half of the decline. The state’s decreased CHIP enrollment could not have come at a worse time. Then, as now, Texas ranks fiftieth out of fifty states when it comes to kids and health insurance, with the highest percentage of uninsured children in the nation. Twenty-two percent of Texas children (nearly one in four) are currently without health insurance, as compared with just 12 percent of children nationally.

Legislators who voted for the CHIP cutbacks, as well as Governor Rick Perry, who backed the plan, argue that they had little alternative. Facing a $10 billion budget shortfall at the start of the 2003 session, they had to make hard choices that required paring down the state’s social services. But opportunities during the session to create alternative sources of revenue without increasing broad-based taxes, which could have prevented cuts to CHIP, were squandered. Ultimately, the decision to downsize the program has proven to be fiscally shortsighted. Every dollar that a state spends on CHIP is matched by $2.59 from the federal government, money that the State of Texas, by scaling back the program, left on the table. Because of the dramatic drop in CHIP enrollment since the last legislative session, by 2005 Texas will have missed out on more than $500 million in federal matching dollars. State comptroller Carole Keeton Strayhorn has made clear that it would take only $98 million in state funds (matched by more than twice that amount in federal funds) to restore full CHIP benefits for 2005 and that there is ample money available to do so. But the Legislative Budget Board, which controls the purse strings when lawmakers are not in session, has declined to take action, as has the governor, who did not give the Legislature the opportunity to consider the issue during the four special sessions he has called since last summer.

While state lawmakers can boast of balancing the budget without raising taxes, in fact they have done no such thing. They have simply pushed the tax burden for health care onto local communities, at a much greater expense. Children who lose their health insurance still get sick and often end up in county hospitals’ emergency rooms, where medical care is the most expensive and where the taxpayers pick up the bill without the benefit of CHIP’s federal matching dollars to offset the cost.

The unresolved question that hangs over the upcoming legislative session is whether the political will exists to reverse the trend of Texas’s ranking dead last in the nation in the percentage of kids covered by health insurance. CHIP alone cannot solve the problem, but it is one of the few resources available to the Legislature right now that can have a direct, and immediate, impact on the lives of children in need. Dr. Kenneth McClain, a pediatric oncologist at Texas Children’s Cancer Center, in Houston, who would eventually oversee Aaron Garcia’s case, laments that Texas has not made more of a good-faith effort to reduce the number of uninsured children. “It’s a cruel trick that the Legislature plays when it says Texas is a low-tax state, because we still pay in the end,” he says. “But we pay once kids’ illnesses have progressed, and we pay at the county level. Money isn’t the only issue; there’s an ethical dimension to this as well. Kids without health insurance are more likely to have delayed or interrupted medical care. They suffer more. If we can find the money to pave our roads, why can’t we make these kids a priority?”

NO ONE WOULD HAVE PREDICTED when CHIP was written into state law five years ago—with overwhelming bipartisan support—that it would become one of the biggest bones of contention in Texas politics. It has split the state’s Republican leadership, with Governor Perry and House Speaker Tom Craddick backing the cuts and Lieutenant Governor David Dewhurst and Comptroller Strayhorn looking for ways to restore funding, and it has given Democrats an issue to capitalize on at a time when their influence has grown increasingly anemic. Yet the program itself is still not well understood, largely because any examination of health care issues often strays into arcane jargon and number-crunching that only a policy wonk could love. But at its heart the debate over CHIP really comes down to two simple questions: Should the state subsidize the cost of health insurance for the children of the working poor, as it does for the children of the poorest of the poor through Medicaid? If the answer is no, then the next question is, What will be the consequences for the state’s taxpayers, and for the 1.4 million children in Texas who do not have health insurance?

The best way to grasp the problem of uninsured children is to visit any emergency room in Texas, especially one that specializes in pediatric medicine. The scene isn’t as dramatic as something you might see on ER—a few kids who are having difficulty breathing because of asthma, a diabetic teenager whose blood sugar has plunged precariously low, and lots of kids with ordinary ailments who  have nowhere else to go since their parents can’t afford health insurance. Here you will hear stories like the one Dr. Cynthia Beamer tells about the fifteen-year-old boy with the ruptured appendix. A pediatric ER physician at Christus Santa Rosa Children’s Hospital, in San Antonio, Beamer often sees children with appendicitis whose families have waited until the eleventh hour to bring them to the emergency room. Sometimes these patients’ appendixes have already burst; she once saw nine such children in one week. In the case of the fifteen-year-old boy with the ruptured appendix, he had tried, in vain, to treat his symptoms at home with Alka-Seltzer and Pepto-Bismol. He had waited for four days before telling his father that he needed to go to the emergency room. “This child was in terrible pain, but he was trying to be stoic,” Beamer says. “I asked his father why he hadn’t sought out medical attention earlier, and the boy told me, ‘It’s just me and my dad, and we don’t have any money.’ He was very frank about the fact that he had been trying to spare his father the expense of hospitalization.”

Treated early, a child needing an appendectomy will spend one or two nights in the hospital. But if the child’s appendix has already ruptured, he or she faces a minimum of five nights, and longer if complications develop. Preventive care, which CHIP provides, costs far less than treating health problems that have reached a more critical state. Take, for instance, the expense of treating asthma, which is one of the most common reasons children end up in the emergency room. A recent study by the Harris County Hospital District showed that the cost of inhaled corticosteroids, which can prevent asthma attacks if taken daily, ranges from $94 to $103 per month. But treating a full-blown asthma attack, including a visit to the emergency room and an average three-day hospital stay, runs $9,209. If the patient’s family does not have health insurance and cannot afford to pay, the hospital has to absorb some—or all—of the cost. If the hospital happens to be a public facility supported by local taxes (which is where low-income families usually end up), the cost is passed on to the taxpayers. Not quantifiable are the other benefits of treating asthma early: A child is less likely to miss school, to develop bronchitis or pneumonia, and to suffer from lifelong lung disease. Still, for families who are struggling to get by without health insurance, the combined cost of asthma medication and regular doctor’s appointments is often prohibitive, which is one reason why, if you glance around an ER, you will likely see so many children wheezing in the waiting room.

Many of the chronic illnesses ER pediatricians encounter, like asthma and diabetes, could be better managed if parents had health insurance that enabled them to afford regular checkups and prescriptions for their children. Instead, too many kids have to be treated episodically. “If they’re having an asthma attack, I can stabilize them,” says Dr. Christine Koerner, the chief of pediatric emergency medicine at Lyndon B. Johnson General Hospital, in Houston. “But I’m just treating the superficial problem, not the underlying cause.”

After being discharged from the emergency room, kids are often sent home with prescriptions that need to be filled. For parents of the uninsured, who must pay the full price at the pharmacy, there are hard choices to make. If money is tight, do they opt to fill only the least expensive of their child’s prescriptions? Or do they stretch out the intervals between dosages or try to make do with home remedies instead? What if their child is diabetic but they can’t afford enough syringes or vials of insulin? “Sometimes they’re having to decide whether to buy medicine for their kids when it means they might not have enough money left over to buy groceries and pay the rent,” says Dr. Joan Shook, the medical director of the emergency department at Texas Children’s Hospital, in Houston.

The problems doctors see among uninsured children are not limited to chronic diseases. “Kids will have fractures that are five days old by the time they get here,” says Shook. “If a fracture isn’t set promptly, a child can incur a permanent disability.” Other complications arise when kids lack access to routine medical care. Texas currently ranks forty-fifth in the nation for its rate of immunization, one reason the incidence of whooping cough has doubled here in the past two years. If children do not have regular checkups, even controllable health problems may worsen: Uncorrected vision can impair a child’s performance in the classroom; untreated ear infections can lead to hearing loss; unfilled cavities can lead to abscesses and the loss of teeth. “We see these beautiful young people who are trying so hard to look well groomed—girls who have taken so much care to apply their makeup and to do their hair—who won’t smile or who cover up their mouths with their hands,” says Dr. Celia Neavel, the director of adolescent health services at the People’s Community Clinic, in Austin. “It’s only when you examine them that you see the holes in the backs of their mouths where they’ve lost permanent teeth. It’s heartbreaking.”

The evidence that children who have health insurance lead healthier lives than children who lack it is overwhelming. Insured kids require fewer emergency room visits than the uninsured, need fewer hospitalizations, and miss fewer days of school. They see doctors more frequently, have more checkups and preventive medical care, and are more up-to-date on their immunizations. A 2002 study by the Children’s Defense Fund found that uninsured kids are twice as likely to go without needed prescription medication and eyeglasses, three times as likely to go without necessary dental care, and four times as likely to have essential medical care delayed because of its cost. Community health clinics, where the uninsured can receive care on a sliding scale, are in short supply around Texas and are often so swamped with patients that they must turn new ones away. Waiting lists can be months long. Emergency rooms continue to absorb the overflow; in the Houston area, the number of ER patients has more than doubled in the past decade. Public hospitals like Lyndon B. Johnson General Hospital, where more than half of the patients are uninsured, have been hit the hardest. “It’s very common to have waits of fifteen or sixteen hours in our emergency center,” says Dr. Margo Hilliard, LBJ’s senior vice president. “That happens two or three times a week.”

The recent cuts in CHIP have only made the problem of uninsured children worse. “When flu season hits and kids are lined up and down the halls of our emergency center,” Hilliard says, “we will have a greater number of patients to care for and decreased funds to work with.” The Center for Public Policy Priorities, a progressive think tank based in Austin, estimates that Harris County alone has lost $136,452,782 in combined state and federal CHIP dollars. That deficit, along with additional costs that rise when the number of uninsured patients increases—like charity care and bad debts—will be passed on to Harris County homeowners through their property taxes next year. None of these problems are unique to Houston; across Texas, property owners are feeling the pinch. “Whether we pay up front or on the back end, we’re still going to pay,” Hilliard observes. “It’s naive to think that if we make cuts to CHIP, kids will stop getting sick.”

SONIA AND ARMANDO Botello live on a leafy street in a working-class neighborhood on the northern edge of Houston, where the hum of lawn mowers competes with the thumping beat of hip-hop bass lines. Here, the Botellos and their four children are caught in the netherworld between poverty and just getting by, a place where one illness, or one big car repair bill, can cause you to lose your foothold. Sonia is a slight, cheerful woman in her early forties who works as a custodian for a local charitable organization. Armando, her husband of 21 years, loads precooked meals onto airplanes at nearby George H. W. Bush Intercontinental Airport. Sonia used to believe in upward mobility and the idea that hard work could earn her family a better life. Now she can barely remember what it feels like just to run in place, because she and Armando always seem to be falling behind. They have no credit cards and no savings to speak of. They spend all of Sonia’s take-home pay—$500 every two weeks—on rent alone. They have two assets to their name: a 1983 Mustang that runs erratically and a three-year-old pickup that they struggle to make payments on. If it’s not the electricity that is in danger of being cut off, it’s the gas or the phone. Every month they budget down to the penny, and every month they come up short.

The Botellos both work full-time, and still, they are barely making it. Sonia, who spends the better part of her workdays mopping floors and scrubbing bathrooms, started to feel that they were losing ground three years ago, when Armando lost his job. Throughout most of the nineties, her husband had been employed at a Houston sandpaper company, where he had worked his way up to the title of branch manager and its relatively generous $15-an-hour pay. Then came September 11, 2001. The business faltered, and despite Armando’s nine years of service, he was laid off several weeks later. The family lived off Sonia’s salary and Armando’s unemployment benefits for as long as they could. But as 2002 wore on without any job offers, they gradually exhausted their life savings. After a year out of work, Armando found the catering job that he holds now, which pays him $9.75 an hour, $840 less per month than he made before. He and Sonia now catch glimpses of each other when one is rising for work or easing into bed. (Because they can’t afford child care, Sonia leaves the house before dawn and returns before school lets out. Armando’s shift starts as hers is ending.) “Sometimes we both get so frustrated,” Sonia said as she sat in the fading afternoon light of her kitchen this fall. “We never planned on working this hard and having nothing to show for it.”

Until Armando lost his job, in 2001, their children had health insurance. Each month, Armando had paid his employer $500 for a plan that covered him, Sonia, and the kids: Armando Junior, who was seventeen at the time; Vanessa, fourteen; Ashley, eight; and Alex, five. The cost of the policy had been a major sacrifice; besides the rent, it was the Botellos’ biggest expense. But as Sonia and Armando saw it, health insurance was a necessity, since the odds were that even healthy children were bound to have their share of cavities, sore throats, and visits to the emergency room. That necessity became harder for Armando to obtain for his family at his new job, where his employer provided him with fewer benefits on a reduced salary. Just covering the kids would cost him and Sonia $400 a month for a plan that had a $500 deductible. With Armando making little more than two thirds of his former salary, he and Sonia did the best they could, opting to pay an $80 premium that provided minimal health insurance coverage for just the two of them. (As the family’s wage earners, they reasoned, they were the ones who could least afford to get sick.) For their children, the price of private health insurance was no longer in reach. Nor was Medicaid an option. The Botellos’ combined annual income of $33,000 was well above the federal poverty line that is the cutoff for Medicaid eligibility, defined as $25,210 for a family of six.

The Botellos are hardly unique. Nine out of ten uninsured children in Texas have a parent who works, and a majority of them reside in two-parent households. Hispanic children are the most likely to be uninsured, making up 56 percent of Texans under the age of nineteen who lack health insurance. (White children account for 28 percent and black children 14 percent.) Sonia and Armando were lucky that one of their employers offered health insurance coverage at all. As the cost of premiums has become prohibitive, the number of businesses providing insurance coverage for their workers has been declining nationally for the past three years. And while most Americans—62 percent—get health insurance through their workplace, just 51 percent of Texans do. What benefits do exist are scarcest for children; many companies that offer health coverage for their employees do not provide plans for dependents. Even when employers do offer health insurance to low-wage workers like Sonia and Armando, premiums tend to be more expensive than they are for higher-paid employees. Families like the Botellos then have a harder time affording health care premiums and staying insured.

Only because of CHIP were Sonia and Armando able to obtain health insurance for their children. Under the program, in which the Botellos enrolled their kids while Armando was still unemployed, the children could continue to have dental appointments every six months. Their vision and hearing were checked once a year, and when they fell ill, they saw their pediatrician. The program not only provided them with basic medical care but also kept Sonia and Armando from falling further into debt. When Vanessa’s lower right side began to throb with pain, Sonia correctly suspected that she had appendicitis and rushed her to the emergency room. The appendectomy cost the Botellos just a $25 co-pay. CHIP also proved critical when Vanessa later detected a lump in her breast. Because the Botellos have a history of breast cancer on both sides of the family, she promptly had it biopsied, and it proved to be benign. Vanessa, who has developed subsequent lumps, will continue to be monitored. To Sonia and Armando, who struggle to pay every bill, CHIP seemed to provide the only relief in an otherwise grim slide each month toward being broke again.

When the Texas Legislature erected hurdles to keep families off of CHIP, the Botellos cleared them. They met the new income requirements and were able to pay the program’s increased premiums, which rose from $15 per year to $15 per month for their income level. Sonia and Armando consider themselves lucky that their children are among the 348,145 young Texans currently enrolled in the program; nonetheless, they are feeling the pain inflicted by the Legislature’s decision to hollow CHIP out from within. Among the benefits that the program no longer carries are dental and vision care. For a middle-class family with disposable income, the reduction in benefits might be a setback; for the Botellos, the loss of coverage had turned into a crisis by the end of the summer. Ashley, who was about to start the fifth grade, had developed piercing headaches, and her sight was blurred. When Sonia took her to an eye clinic, a $30 exam confirmed that she needed glasses. The frames and the lenses, Sonia was told, would cost a total of $216, but what money the Botellos had at the time was already earmarked for utilities. “We had to choose between paying the electric bill and buying Ashley her glasses,” Sonia said. “We bought the glasses.” Their electricity was cut off in the middle of August, when the temperature soared toward 100 degrees.

As the Botellos have always done, they managed. Sonia bought bags of ice and salvaged food from the refrigerator. The kids took cold baths before bed. They slept on the floor of the living room, where Sonia kept the front and back doors open in case a breeze drifted through. Armando negotiated a payment plan with the electric company, and their service was turned back on. Now Sonia braces herself for the next time they find themselves out of luck. She buys clothes at yard sales and stretches out meals with large helpings of noodles and rice. She puts only as much gasoline as she and Armando need into the pickup, a few dollars at a time. Her children can see the strain; Vanessa, who has an after-school job at a video arcade, sometimes presses a $10 bill into her mother’s hand to help cover expenses. Without CHIP, Sonia knows that her children would have no health insurance, so she does not complain too loudly about the benefits they have lost. She is grateful for what limited coverage her kids still have. “So far, we’ve been blessed,” she said brightly, trying to strike an upbeat note. “No one’s had any cavities so far. I tell the kids every night: ‘Brush your teeth real good.’”

THE RELATIVELY COLLEGIAL mood that dominated the Seventy-sixth Legislature in 1999, when CHIP was written into law, seems almost quaint in comparison with the last regular session, when House Democrats bolted to Oklahoma during the heated battle over congressional redistricting. In 1999 George W. Bush was beginning his second term as governor, burnishing his record as a compassionate conservative, with an eye on a higher office. Democrats controlled the House and Republicans ruled the Senate, making the two parties more inclined to reach across the aisle. Perhaps most unusual, the state was flush with not only a $6 billion budget surplus but a $17.3 billion windfall from its legal settlement with tobacco companies. It was in this more magnanimous environment that CHIP came into being, two years after federal legislation created the program for states to adopt. So different was the mood in Austin then that Rick Perry, who was lieutenant governor at the time, penned a newspaper editorial in the spring of 2000, extolling the virtues of CHIP. “The children’s health insurance program is an investment that will pay big dividends down the road,” he wrote, enumerating its merits and providing a toll-free phone number to call for more information. “[It] extends a helping hand to the most fragile Texans—uninsured children—and in doing so, ensures that the future of the Lone Star state is healthier, brighter, and more productive for us all.”

Not that CHIP had been won without a fight. During the 1999 session, then-governor Bush had first backed a version of the bill that limited eligibility to families who earned no more than 150 percent of the federal poverty level, rather than the 200 percent cutoff that most Democrats and many Republicans supported; the lower ceiling would have prevented families like the Botellos from receiving CHIP benefits. Some conservatives in both parties tried to scale back the benefits package by reducing the income limit and lowering the cutoff age for children, arguing that Texas did not need more government programs or drains on its tax dollars. But after repeated attempts to restrict eligibility were turned back, a compromise bill won approval. In the end, Democrats got most of what they had wanted: CHIP would cover children under the age of nineteen who did not qualify for Medicaid, in families earning up to 200 percent of the poverty level. Only a veto from the governor could nix the program. On the eve of a bid for the presidency that would strive to appeal to soccer moms and swing voters, Bush was not inclined to shoot down legislation for needy children. He signed the bill into law, and to the annoyance of some Democrats, he would later claim it on the campaign trail as evidence of his compassionate conservatism.

CHIP was one of the few tools that the Legislature had to counter the growing number of uninsured children in Texas. The underlying reasons that Texas has the highest percentage of both children and adults without health insurance have to do with deeply entrenched economic forces that the Legislature can affect only marginally. Texas has relatively few manufacturing jobs, which usually have generous benefits, and a large concentration of jobs in service, retail, and agriculture, which frequently lack benefits. Fewer of the state’s small businesses offer health plans than do similar businesses in most other states. Add to the mix a high rate of unemployment, which has fueled the numbers of the uninsured, and a substantial migrant population that is not eligible for federal programs like CHIP or Medicaid. Finally, as a right-to-work state, Texas has never been fertile ground for labor unions, which could bargain aggressively for employee benefits. Despite all this, the Legislature succeeded in significantly reducing the number of uninsured kids in Texas when it adopted CHIP. A massive bilingual outreach program and advertising campaign paid off: A year later, more than half a million Texas children who had previously had no health insurance were enrolled in CHIP.

But by the start of the last legislative session, in January 2003, the fortunes of CHIP had already turned. A statewide economic slowdown had left the Legislature facing a $10 billion budget shortfall, the largest in Texas history. Republicans, whose calls for smaller government had long met with resistance from the Democratic majority, had control of both the House and the Senate for the first time in 130 years. Despite the record shortfall, Republican leaders declared at the outset of the session that they would balance the budget while making good on their campaign promises not to raise taxes. To do so, Governor Perry and House Speaker Tom Craddick advocated lowering the state’s spending levels rather than using non-tax revenue to fund programs like CHIP, as recommended by a fellow Republican, Lieutenant Governor David Dewhurst. The opposition was powerless to fight the cuts. “The Democrats had no political capital by the start of the session,” said Harvey Kronberg, the editor of the Quorum Report. “In the House, they didn’t win a single significant battle. The House functioned almost as an adjunct to the governor’s office. Perry and Craddick made it clear that they weren’t interested in coalition-building but in break-your-knees partisanship.”

With the backing of party leaders eager to reduce state spending, Representative Arlene Wohlgemuth, a Republican from the Fort Worth suburb of Burleson, introduced legislation in March 2003 to overhaul the state’s health-and-human-services agencies and programs like CHIP, at a projected savings of $1 billion. A proponent of low taxes, Wohlgemuth has long been a champion of limited government; she told the Waco Tribune-Herald this summer that she considered CHIP to be little more than “a socialized medical program.” The bill reflected this vision. In the final version, dental and vision benefits were eliminated. Mental health benefits were curtailed so severely that the federal government later asked the state to justify the cutbacks. (In October 2003 the state restored some of these benefits.) A three-month waiting period for new enrollees was instituted. An asset test was established for families with incomes higher than 150 percent of the federal poverty level; a family with more than $5,000 in cash and savings was ineligible. The switch from yearly to monthly premiums was introduced. An amendment proposed by Democrats calling for a $1 tax on a pack of cigarettes, which would have raised an estimated $1.5 billion and made cuts to CHIP and other programs unnecessary, failed.

Once the Republicans had decided to hold the line on taxes and other revenue-raising proposals, cuts to CHIP were inevitable. The program wasn’t alone in getting the ax—public schools and state universities felt the pain too—but the CHIP cuts were rooted not only in the desire to curb state spending but also in many Republicans’ philosophical belief that some of the program’s recipients were not truly needy. Then-Republican party chairwoman Susan Weddington, of San Antonio, remarked in a conference call with Republican leaders that parents whose children might be dropped from CHIP would have to buy their kids private health insurance and “maybe have a little less disposable income or a little less inheritance from Mom and Dad.” Talmadge Heflin, the House Appropriations Committee chairman, told his hometown newspaper, the Houston Chronicle, that many children who might lose their CHIP benefits could probably be covered under their parents’ employer health plans but that it had been “a choice of the parents not to purchase the insurance.” To Democrats like state representative Garnet Coleman, who had helped shepherd CHIP legislation to passage in 1999, the argument that the program’s recipients were gaming the system was both ignorant and unfounded. “The conservative right has made this argument for years against welfare, and now they want to make it apply to CHIP,” Coleman said this fall from his office inside the Capitol. “It’s the old idea of the welfare queen who’s driving a Cadillac, and it’s a bogus argument. These aren’t deadbeats. These are folks who have jobs, who are doing everything they can to take care of their families, and who are still one paycheck from poverty. They don’t need to be lectured about personal responsibility.”

Since the CHIP cuts took effect last September, critics of Republican leaders have begun to make hay out of the image of children cast aside by a heartless Legislature. Both U.S. senator Kay Bailey Hutchison and state comptroller Strayhorn, who are considering challenging Perry in the next Republican primary, have been outspoken in their criticism of the governor. They denounce his refusal to tap into the $98 million that (with the help of matching federal dollars) would restore CHIP funding for 2005. Strayhorn has been particularly critical, upbraiding the governor for holding four special sessions in the past eighteen months in which he refused to take up the issue, while focusing instead on matters like redistricting. “There is no excuse for not having restored full funding to CHIP a year ago, much less now,” Strayhorn said in October, in her well-appointed office that sits blocks from the Governor’s Mansion. “I identified $703 million that was available as of July 2003. By the time we had a fourth special session, I had identified $1.2 billion that was available. So for four consecutive special sessions the dollars have been there, and the Legislature was in Austin, but the governor would not even add it to the call so that our representatives could vote on the issue. That, in my book, is unconscionable.” Governor Perry declined to be interviewed for this article, but his spokesperson Kathy Walt dismissed Strayhorn’s criticisms. “Suggestions that Texas spend every dollar as soon as it comes in is like spending your paycheck as soon as you get it and ignoring the bills that come in later,” she said.

This fall, Wohlgemuth found herself in an unexpectedly tight race for Congress against Democrat Chet Edwards, of Waco, who spared no opportunity during their six debates and months on the campaign trail to attack her record on CHIP as evidence of hard-heartedness. “She didn’t cut overhead,” Edwards was fond of saying on the stump. “She cut kids.” Perry, perhaps sensing his own vulnerability on the issue (or, as political observers in Austin whispered, in a last-ditch effort to save Wohlgemuth from defeat), did away with CHIP’s mandatory monthly premiums two weeks before the November election. Wohlgemuth, who declined to be interviewed for this story, lost by four percentage points, a remarkable margin considering that fellow Republicans redrew the district last year to all but guarantee a victory for a conservative candidate and that she had the support of President Bush, whose Crawford ranch is located within the district. Edwards’s attack ads—which had endlessly replayed her declaration, “CHIP has never been one of my top priorities,” alongside photographs of a three-year-old girl who had been dropped from the program—had their intended effect. As Republicans swept up office after office on Election Day, the architect of the dismantling of CHIP was suddenly left without a constituency.

WHETHER THE LEGISLATURE chooses to revisit the issue of CHIP during the upcoming session will depend on the will of Governor Perry and the Republican majority in the Legislature. CHIP must compete for funding with school finance—a far more important issue to Perry’s chances for reelection, and to most Texans generally, than children’s health insurance. The Texas Public Policy Foundation, a conservative think tank based in Austin, has urged the governor to stand firm in his commitment to smaller government. The TPPF argues that the answer to the problem of the uninsured is not more government spending but lower health care costs. It has a point—who doesn’t want to lower the cost of health care?—but the solution the TPPF proposes is to set up medical savings accounts so that people can purchase insurance on the free market, which would in theory cause the price of premiums to decrease for everyone. However, only in a perfect world would families like the Garcias and the Botellos be able to afford private insurance for their children. In the meantime, there are imperfect answers like CHIP, in which the federal government provides 72 cents for every 28 that the state spends. And CHIP does its part to lower health care costs by moving treatment from emergency rooms to doctor’s offices. “Even if you don’t care about uninsured children for all the reasons you ought to, you should care because this is costing you in the end,” Comptroller Strayhorn said. “When we abdicate our responsibilities at the state level, we’re causing these expenses to be picked up by local property owners at at least three times the cost.”

There is another, harder-to-quantify cost to the CHIP cuts: the lost value of what policy­makers often refer to as “human capital.” The uninsured children who fill hospital emergency rooms today are the state’s workforce of tomorrow. The Legislature understood how an investment in the present could pay dividends down the road when it opted in 2003 to give $295 million to Governor Perry’s Texas Enterprise Fund, state dollars which can be offered as incentives to businesses to stay in, or relocate to, Texas. If the fund brings much-needed business to the state and provides a boost to the economy, it will be money well spent. But the Legislature has not regarded healthy children as an equally urgent investment.

Instead, its cuts left 159,114 kids without health insurance. One such child is an Austin seventh-grader named Roy Martinez. His mother, Michelle, learned in May from a perfunctory letter sent by the Health and Human Services Commission that her annual income level was $33 over the CHIP limit. A single mom who works in a cardiologist’s office, Michelle had never had difficulty qualifying for the program before, but under the new law, she is no longer permitted to deduct the cost of child care for her three-year-old daughter when calculating her monthly income. (While her daughter receives health insurance through her ex-husband, Roy has a different father.) To add Roy to her health plan at work would cost $343 a month, an expense Michelle cannot afford. When her son lost his glasses this summer, she tried to come up with enough money to replace them, but by the start of the school year, Roy was sitting in the front row, straining to see the blackboard. “I deal with people all day long at work who don’t have insurance, but you can’t understand what it is like until you experience it firsthand,” Michelle said. “You feel like a failure as a parent. You try so hard to make sure that your kids have everything they need, and then when you can’t, you lie awake at night wondering where you went wrong.”

The most elemental rule of medicine is “First, do no harm.” The standard should be no lower for the State of Texas.