Federal Funding Approved, FamilyCare Begins This Month

FamilyCare, a new health care program for low-income adults with children, is set to begin enrolling and covering the first beneficiaries this month. U.S. Department of Health and Human Services Secretary Tommy Thompson and Gov. George Ryan announced the program’s launch last month.

FamilyCare offers health insurance to low-income working parents (or other relatives who are the chidren’s caretakers) whose children the state already covers under the KidCare or Medicaid programs. At least 28,000 adults will be eligible starting this month—paid for entirely with federal funds. Ultimately as many as 300,000 Illinois parents may be eligible for FamilyCare. Beyond the first 28,000 people, the federal government has agreed to pay for 65 percent of the cost.

Thus the full rollout to potentially 300,000 people must wait until Illinois puts up its 35 percent share (approximately $80 million, depending on enrollment). This is an excellent leverage of federal funds for the popular and important program, and it immediately becomes a high priority for the new governor and the General Assembly to be elected next month.

Working with the National Center on Poverty Law and other community groups and advocates, the Ryan administration espoused FamilyCare late in the 2001 General Assembly session. The Department of Public Aid filed the federal “waiver” proposal seeking approval of federal funds in February 2002. Governor Ryan included the program in his proposed budget, which the General Assembly approved during the 2002 spring session. The General Assembly’s approval depended upon the winning of the federal waiver that gives Illinois access to substantial federal funds for FamilyCare.

Federal funding. The waiver provides federal funding to expand health insurance eligibility for parents from 40 percent of the federal poverty level (the current level under Medicaid, or $7,060 for a family of four) to 185 percent of the federal poverty level (currently $32,650 for a family of four). The waiver provides that Illinois (without having to spend any new state funds) will immediately receive sufficient federal funds to cover the 28,000 people in the program’s first phase, with enrollment and coverage beginning this month. This expands the eligibility level to 49 percent of the federal poverty level ($8,869 for a family of four). Further expansion will require new state appropriations to cover the 35 percent state share.

John Bouman, deputy director of the National Center on Poverty Law, said, “FamilyCare offers a major breakthrough on health services for people working in low-paying jobs, who otherwise cannot afford the employer’s health insurance or whose employers do not offer health insurance.” Health insurance will improve employees’ productivity on the job. Studies also show that covering parents improves both the enrollment of children in health insurance and the frequency and quality of their health care.

Program rules. Under FamilyCare an eligible family must contain children eligible for Medicaid or KidCare, and the children must enroll. For families with income above 133 percent of the federal poverty level ($24,073 for a family of four), the program offers the family a choice of either state-administered insurance (Medicaid) or a cash subsidy to help pay premiums for employer’s or private insurance. The waiver allows Illinois to offer this choice to people lower on the income scale in the future.

For families who are above 133 percent of the federal poverty level and opt for the state’s insurance (Medicaid look-alike), there will be small copayments for FamilyCare as under KidCare. For families who are above 150 percent of the federal poverty level ($27,150 for a family of four) and opt for the state’s insurance, there also will be monthly premiums of $15 for one person, $25 for two, $30 for three, $35 for four, and $40 for five or more.

October enrollment rules. The Department of Public Aid plans to implement the initial rollout this month under a temporary set of procedures. Those eligible include families with income at or under 49 percent of the federal poverty level (see table 1).

Eligible families whose children are already covered by KidCare or Medicaid may call the Illinois Department of Human Services, or IDHS, office that serves their area and request to be added to the existing KidCare or Medicaid case that already includes the child or children. The IDHS office will request current income information from the family, unless the family has recently submitted this information in connection with a health insurance or food stamp redetermination. This process is supposed to be available entirely by phone and mail, although local IDHS office practices may vary, and families may wish to appear in person to ensure that the process is completed.

Eligible families whose children are not already enrolled in KidCare or Medicaid will be required for the time being to appear in person at the IDHS office to process an application for the children and parents or caretakers. Alternatively this type of family may apply for KidCare for just the children under any of the many means of applying for KidCare (including mail-in applications and sites other than IDHS).

After the children are enrolled, the adult can phone the IDHS office to be added to the case (probably at least a month later). The Department of Public Aid intends to structure the application process for FamilyCare to be the same as the current process for applications for KidCare (a variety of ways to apply with a visit to the IDHS office being just one of several options). However, part of the tradeoff for the prompt implementation this month is that it will temporarily be necessary for new families to apply in person at the IDHS office if they want immediate coverage of the adults.

Information is available toll-free on the Department of Public Aid’s KidCare hotline, 866.468.7543 (866.4.OUR.KIDS) (TTY: 877.204.1012).

For more information, contact John Bouman, National Center on Poverty Law, 312.263.3830 ext. 250.