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April 11, 2014 01:00 AM

Keep CHIP until exchange problems are fixed, MACPAC asks

Virgil Dickson
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    The Children's Health Insurance Program should come to an end, but not before fixes to private insurance options are made to ensure no child loses coverage, members of the Medicaid and CHIP Payment and Access Commission said Friday after two days of deliberations.

    CHIP was established in 1997 with bipartisan congressional support and 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 extend CHIP through Oct. 1, 2015.

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

    On Friday the panel voted 16-0 to suggest that Congress extend CHIP funding for an additional two-year transition period until legislative action is taken to fix several deficiencies the panel has seen with insurance plans offered through the exchanges. The suggestion will appear in the commission's June report to Congress.

    The proposal is a step back from one MACPAC staff presented to the commissioners Thursday. That suggestion would have extended CHIP funding until 2019.

    “We should think about a transition period, one that's shorter than the full four years being suggested,” Sara Rosenbaum, a MACPAC commissioner and founding chair of the department of health policy at George Washington University. “The argument being, there are decided shortcomings in the Affordable Care Act and I'm very concerned that if we extend the program through 2019, it will allow the problems to continue on.”

    The chief concern of Rosenbaum and other commissioners, is the so-called “family glitch,” a phenomenon in which a parent may have access to private insurance through an employer, but be unable to get insurance for his or her children.

    The ACA dictates that premiums for individual coverage must not exceed 9.5% of a worker's income. But there is no limit on an employee's share of premiums for family coverage, which typically costs dramatically more than individual coverage. Without subsidies, families are currently forced to seek coverage for their children in public programs like Medicaid or CHIP.

    There are also concerns about what will happen to undocumented pregnant women, because they are now able to get prenatal care under CHIP until their babies are born. These women account for 8% of births each year, the panel noted.

    Other looming issues include benefit differences between CHIP and exchange-offered private health plans. For example, some exchange plans do not offer coverage for rehabilitative 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.

    Also, the commissioners are uneasy 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.

    Giving Congress an additional two years is not “kicking the can further down the road;” rather it's giving Congress time to come up with legislative fixes for these issues, said Andrea Cohen, MACPAC commissioner and senior vice president at United Hospital Fund, a nonprofit research organization.

    If Congress does nothing and allows CHIP funding to end, MACPAC staff estimated that 2 to 4 million children could become uninsured, either because their families won't be eligible for Medicaid, or they won't be able to qualify for subsidies on exchange plans.

    Unless MACPAC's concerns about exchange plans can be addressed by executive order or CMS rulemaking, it is unlikely the commission will get the legislation they are seeking anytime soon.

    Follow Virgil Dickson on Twitter: @MHvdickson

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