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