Healthcare Business News

CHIP extension needed despite healthcare reform, panel says

By Virgil Dickson
Posted: February 20, 2014 - 6:45 pm ET

Congress should extend funding for the Children's Health Insurance Program because millions of lower-income children could lose coverage if the program ends next year, members of the Medicaid and CHIP Payment and Access Commission said Thursday.

The panel, which makes recommendations to Congress on Medicaid and CHIP matters, took no formal vote, but the clear consensus was that lawmakers should extend federal funding for the program before it ends Oct. 1, 2015. After MacPAC staff delivered a report indicating that an extension is needed, the commission members made comments showing their agreement, with no dissenting comments.

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The program, established in 1997 with bipartisan congressional support, serves about 8 million children in families earning up to 200% of the federal poverty level. During the drafting of the Patient Protection and Affordable Care Act, Senate Democratic leaders persuaded House Democratic leaders to agree to extending CHIP through 2015.

Federal spending for CHIP was $13 billion in fiscal year 2013, up 8% from the previous year.

Some policy experts have questioned the continuing need for the program because of the coverage expansion under the healthcare reform law. But MacPAC found that some kids could fall through the cracks even with that law in place.

The American Academy of Pediatrics' Committee on Child Health Financing recommended last month that Congress fully fund CHIP through 2019.

Those most at risk of losing coverage are the more than 5 million children who live in states where the CHIP program operates separately from Medicaid. There is a high likelihood that many of these children would not qualify for premium subsidies to help them get private coverage through the Obamacare insurance exchanges, a commission analysis found. In states where the programs are combined, however, it's likely those kids would be transitioned to Medicaid.

Another group that could be left uncovered if CHIP ends are pregnant undocumented immigrants. These women now are eligible to receive CHIP coverage until their babies are born.

There also are concerns about benefit differences between CHIP and private health plans sold on the insurance exchanges. For instance, some exchange plans do not offer coverage of habilitative therapies, such as helping a child learn to speak or reimbursement for hearing devices.

In addition, lower-income families may have to pay higher premiums and copayments in exchange plans, which may discourage them from signing up for coverage. That could produce an increase in uninsured children.

There also are concerns about the adequacy of provider networks. Exchange plans do not necessarily allow access to out-of-network care even if the plan's network is not adequate for the enrollee's condition. CHIP plans allow such access.

Beyond that, in about half the states, families with incomes under 138% of poverty do not qualify for Medicaid because their states have not expanded Medicaid under the Affordable Care Act. While children in those families are likely to qualify for Medicaid, uninsured parents may be less likely to sign them up.

Also, undocumented parents, who do not qualify for Medicaid or subsidized private coverage under Obamacare may be less likely to enroll their children.

In short, some experts say, there are too many kinks to work out in a short period of time. “Exchanges are not yet ready to function from a strong pediatrics-policy point of view,” said Sara Rosenbaum, a commissioner and founding chair of the department of health policy at George Washington University.

But the panel members seemed to accept that CHIP will end at some point. “We don't want to destroy anything, but it's not something that can continue in perpetuity either,” said Donna Checkett, a commissioner and vice president of business development for Aetna's Medicaid division.

The panel did not make any recommendations for how long Congress should extend CHIP financing. That likely will be decided at a future meeting. The panel also is likely to issue recommendations for how to transition children to other coverage when CHIP does end.

The panel made no firm plans as to when it would issue a formal recommendation on extending CHIP. A spokeswoman said the commission may include a recommendation in its June report to Congress.

Follow Virgil Dickson on Twitter: @MHvdickson

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