CHIP at Risk: Why Connecticut Should Pay Attention
This article was written by Eva Marie Stahl, Ph.D., Project Director, New England Alliance for Children’s Health at Community Catalyst.
Unless Congress acts, the Children’s Health Insurance Program (CHIP) will run out of funds by the end of 2015. CHIP covers about 8 million children nationwide and contributes significantly to our success reaching children and keeping them covered at higher rates than adults. CHIP is unique in its aims: it is an affordable child health coverage option for families earning too much to qualify for Medicaid but for whom private insurance is unaffordable, and it provides benefits and networks that are tailored specifically to the developmental and health needs of children.
In Connecticut, CHIP is called HUSKY B and functions as a partner program of Medicaid (HUSKY A). Together, HUSKY A and HUSKY B cover 94.7% percentage of eligible children. That translates to about 12,000 children in HUSKY B. If CHIP ended, children enrolled in HUSKY B would move into alternate coverage (Marketplace or employer-sponsored plans) or uninsurance, which present challenges for families. As CHIP is debated on the federal level, there are important implications for Connecticut.
What is at risk?
Medicaid, CHIP and the ACA each play a critical role in connecting low-income families to the health system. Even in Connecticut, there is mounting evidence that Marketplaces are not yet ready for an influx of child consumers. While problems are resolved for the adult population and we learn how newly designed private plans serve consumers, CHIP continues to provide children with robust coverage. There is much at risk if CHIP were to end.
Moving backwards on health equity
Medicaid and CHIP work together to move us toward health equity. According to a recent report, Medicaid and CHIP cover more than half of Hispanic and Black children, groups that face some of the steepest health inequities. Immigrant children also face significant hurdles to health care, but thanks to a federal option, HUSKY B allows some legally residing immigrant children to access coverage before the five-year waiting period that is required of adults.
Increases in coverage for these populations represent huge gains in health equity; a study in New York found enrollment in CHIP almost eliminated racial and ethnic health disparities across multiple measures related to access, unmet need, and continuity of care. For many children of color, Medicaid and CHIP clearly open the doorway to needed health care and, over the long run, healthier and more productive lives.
Gaps in Coverage
One challenge of the ACA is called the ‘family glitch.’ If one parent in a family has an individual employer-sponsored coverage option that is affordable, the family as a whole does not qualify for tax credits in the Marketplace, even if the employer’s family plan is not affordable. This regulation keeps many children and adults from obtaining affordable coverage. Therefore, many parents obtain affordable individual coverage while their children rely on public insurance. CHIP serves as a safety net for these children. Estimates suggest that almost 2 million children nationwide will fall into the ‘family glitch’ if CHIP funding expires.
For many CHIP enrollees, the alternative coverage option will be qualified health plans (QHPs) through the Marketplace. These plans are not designed with children in mind and are largely untested; at this point, movement of children from CHIP into the Marketplace is premature. If CHIP ends, children will transition to plans with different, less child-specific benefits and provider networks, and most likely, higher cost-sharing. If HUSKY B were eliminated, families could see their out of pocket costs jump an average of at least $3,000.
Evidence continues to mount that CHIP is necessary and that Marketplaces need additional time to establish their products and processes for adults before the entry of children.
Loss of Federal Funds
CHIP brings important federal dollars into Connecticut. If CHIP ends, Connecticut will lose funds at a time when the state budget is particularly fragile. State CHIP spending is matched by the federal government, at a higher rate than matching funds for Medicaid and in the form of a capped block grant. In 2014 Connecticut received $28 million in these funds. The CHIP matching rate is even scheduled to increase by 23 percentage points in 2016, contributing even more federal funds. Additionally, Connecticut has received almost $10 million in performance bonuses since 2011.
What is the Path to Refunding CHIP?
There are several pathways to securing an extension for CHIP and reasons to hope that CHIP has a chance in the current environment. While CHIP’s continuation is an important factor in the ACA, CHIP has a separate successful bipartisan identity and history that creates space for unlikely supporters.
Both the House and the Senate have introduced bills that fund CHIP until 2019. The bills, introduced by Senator Rockefeller (D-WV) and subsequently Representatives Pallone (D-NJ) and Waxman (D-CA), retain key elements of CHIP and improve upon it where possible. For example, both bills:
- expand opportunities for states performance bonuses;
- make express lane eligibility permanent;
- provide former foster children up to age 26 access to Medicaid across state lines; and
- continue pediatric quality improvement programs.
Moreover, the chairmen and ranking members of the House Committee on Energy and Commerce and the Senate Finance Committee issued a letter to all governors asking for feedback about CHIP by October 31st. This is an important opportunity for stakeholders to educate Governors and staff and the role and impact of CHIP in their state.
Advocates remain hopeful that increased interest in CHIP signals support for its continuation. The Medicaid and CHIP Payment and Access Commission (MACPAC) issued a report about the future of CHIP in June, noting that the cost of extending CHIP remains relatively low and that CHIP remains vital while Marketplaces adapt to meet the needs of children. It is also worth noting CHIP could be refunded through another legislative vehicle. This opportunity remains open and is a potential avenue to secure the program for additional years.
Children’s coverage rates in Connecticut remain high thanks to programs like CHIP. It is important that all stakeholders understand the implications of ending this successful program over the next year as we all work to move forward on children’s health.