More than 40,000 children of state employees can now get federally subsidized health insurance, thanks to new rules allowing low-income state workers to enroll them in PeachCare for Kids.

State officials expect moving eligible kids into the State Children’s Health Insurance Program, or S-CHIP, will save Georgia $32 million next year. The federal government pays three-fourths of PeachCare’s costs.

Until a recent rule change, state workers have been excluded from the program because federal officials worried states would use it to shift costs to the federal government.

But expert said opening S-CHIP to state employees is instead offering coverage to people who have not had it before.

“There are many state employees, not just in Georgia but across the nation, who have income such that these children are not getting any coverage,” said Bill Custer, a Georgia State University professor who studies health insurance and employee benefits. “So the notion is that you’re really not cost-shifting as much as you’re creating a new opportunity for people to get coverage who don’t have it.”

Georgia is one of six states opening their children’s health insurance programs to state workers.

So far, about 10,000 kids’ parents have applied for the program.

Custer said switching coverage will save some families money, but there might be drawbacks, too.

“In order to go to PeachCare, you may have to change your doctor and where you go get care,” Custer said. “So while the cost-sharing may be less, that change in itself may lead people to stay with the existing plan.”

Georgia is still waiting for final approval from federal administrators to allow state workers in PeachCare.

Tags: health insurance, Georgia state employees, state employee health insurance, PeachCare for Kids, S-CHIP, state children's health insurance program, Bill Custer