Children in US receive their health insurance from multiple sources: the Children’s Health Insurance Program (CHIP), Medicaid, employer-sponsored insurance (ESI), or a qualified health plan on the Marketplace. Each offering has different cost sharing and premium requirements, provider networks, coverage packages, and eligibility criteria. This creates a fragmented system of coverage for children and families, particularly for low- and moderate-income families, who often have children and parents enrolled in across separate coverage sources. Furthermore, this fragmentation leads to disparities in children’s coverage by coverage source.
Shouldn’t all children benefit from cohesive and comprehensive coverage?
CHIP was traditionally seen as a bipartisan program. However, over time, particularly with the passage of the Affordable Care Act (ACA), the politics of CHIP have changed. The uncertain political footing for the program will play a role this summer with the future of children’s coverage up for debate again. CHIP funding is scheduled to expire on September 30, 2017. Additionally, the Medicaid and CHIP Payment and Access Commission (MACPAC) reports that Arizona, California, DC, Minnesota, and North Carolina will run out of CHIP funding by December 2017 if Congress does not reauthorize the money for the program. More than half of states are projected to exhaust federal CHIP funds by March 2018 without reauthorization.
That said, we can expect CHIP to be a key driver in the upcoming the health care minibus discussions. The “minibus” refers to a handful of policy provisions tied together in one piece of legislation. The health care minibus includes all the health care extenders left behind from the Medicare Access and CHIP Reauthorization Act (MACRA), including but not limited to CHIP, the Maternal, Infant, and Early Childhood Home Visiting (MIECHV) program, community health centers funding, and therapy caps.
However, it is time for us to stop talking about CHIP, and instead start talking about integrating the myriad of children’s coverage sources.
Comparing CHIP with Employer Sponsored Plans and the Marketplace
With the creation of the Marketplace and subsidized coverage through the Affordable Care Act (ACA), there is a significant coverage overlap for children in families between 133 percent and 250 percent of the federal poverty level (FPL). These children can receive coverage through CHIP, the Marketplace, or ESI. Families that fall into this income range find themselves examining these options and determining which coverage is best for their children.
CHIP, generally, requires low premiums and cost sharing; includes a robust provider network that is specific to children; and offers expansive services, including Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) coverage, in certain states. Studies have shown that while major medical benefits are comparable across CHIP, ESI, and the Marketplace, certain benefits, such as dental, vision, and autism services, are more available in CHIP. Additionally, Marketplace coverage, even with subsidies, requires more out-of-pocket costs compared to CHIP. Although there are limited data available to compare CHIP, marketplace, and ESI provider networks, flexibility in network regulations creates significant variation in provider networks across states and plans. These factors often result in families opting for CHIP coverage for their children, while parents remain in the Marketplace or on employer sponsored plans.
Looking Beyond CHIP
There are many proposals and recommendations that call for an extension of CHIP funding. Recently, for example, MACPAC recommended extending CHIP coverage for five years, extending a “maintenance of effort” requirement on states that operate Medicaid-expansion CHIP programs, and continuing a 23 percentage point increase in the CHIP matching rate for states expenditures. Advocacy groups have called for long-term extension of CHIP funding.
However, proposals that extend CHIP funding without addressing the broader issues of children’s coverage are missing the mark. These proposals promote the status-quo of fragmented coverage in families, where parents receive coverage through ESI or the Marketplace while children receive CHIP. Additionally, these proposals further encourage a system that creates disparities in children’s coverage across states and plans.
Arguments can be made that coverage for children on the Marketplace is not adequate. However, there is no reason that children’s coverage could not be improved on the Marketplace or in ESI. In other words, if CHIP is better than the coverage a child can get through their parent’s ESI or Marketplace plan, why shouldn’t all children get that coverage?
CHIP could serve as a standard for these plans and improve the overall standard of children’s coverage across all sources of insurance. Plans on the Marketplace and in ESI would be required to cover all CHIP benefits inclusive of cost-sharing protections for children in families from 133 percent to 250 percent of poverty. This is obviously very prescriptive but it is putting your money where your mouth is: If you believe in CHIP, then show you believe in CHIP by making its benefits available for all near-poor children.
Another option for the future of children’s coverage could be to extend only the cost-sharing protections of CHIP to the Marketplace for children in families from 133 percent to 250 percent of poverty. In the minimum, it would create an incentive for lower-income families to purchase Marketplace coverage, which could improve the overall stability of the Marketplace, as plans would benefit from having low-cost children on their rolls to spread risk across more costly patient groups.
The alternative, of course, is to simply extend CHIP once again, leaving in place a tri-furcated system where there is no rationale for some children having better coverage than others.
The debate about CHIP should not simply be about extending CHIP. Children’s coverage, regardless of source, should be comparable, comprehensive, and affordable. In looking towards the future of children’s coverage, we should examine the successes of CHIP in affordability, coverage, and provider networks, and look to adopt these elements in ESI and the Marketplace.