The Future of CHIP - What if it Goes Away?

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It is becoming increasingly clear that Congress may well dismantle the popular Children's Health Insurance Program (CHIP) as part of broader health reform. Children and their families have much to gain in health reform, as my colleagues and I have written about elsewhere, but this is a change worthy of its own discussion. It is a big deal. CHIP is widely viewed, and rightfully so, as one of the most resoundingly successful health reform initiatives adopted in recent years. Along with its larger companion program, Medicaid, CHIP has helped to drive down the uninsured rate among low-income children by a third over the past decade.  Right now, 14.1 million children are expected to be on the program in 2013, the year when key elements of health reform would go into effect.
 
It is fair to say that not everyone is happy about this.  Senator Rockefeller (D-WV) expressed displeasure over the prospect in a New York Times article a few weeks ago, and, just yesterday turned the heat up even further on the issue, calling it a "crime" and "sneaky" according to Roll Call's CongressNow.

Here is how it would happen (and, note, it would be a very different outcome in the House than in the Senate).

House.  The House's Tri-Committee bill would allow CHIP to expire on September 30, 2013 (its next reauthorization date) and, instead, move these children into alternative coverage, mostly new "Exchange" plans. Right before it left town for recess, the House added a provision to its bill at the behest of Representative Diana DeGette (D-CO) saying that these children will be moved out of CHIP and into the Exchange only if it is clear that they'll secure coverage that is as good in terms of benefits and cost-sharing protections.

Senate.  The Senate HELP committee has no jurisdiction over CHIP and so barely mentions it.  The Senate Finance Committee hasn't coughed up much concrete information yet, but an options paper released earlier this year suggests that it is considering eliminating CHIP's role as the primary source of coverage for millions of low-income children. Under its proposal, states might still be able to use CHIP to supplement the coverage that kids get through Exchange plans, but CHIP as we've known it would effectively disappear.   I haven't seen the paper, but Senator Rockefeller's strong reaction suggests that they, indeed, are heading in this direction.  (Based on the options it has publicly issued, the Finance committee proposal might allow states to drop Medicaid coverage for people, including lots of kids, with income slightly above the federal poverty level, but that is a matter for another day.)

Now, I realize this isn't a time for nuanced debate about health care reform issues - I've watched the YouTube videos of town hall meetings. Even so, I'm going to give it a shot with respect to this issue.

It is surprising to me that Congress is looking at allowing CHIP to expire, especially with so little public discussion and dialogue.  From a policy and political perspective, there are enormous risks to dismantling a successful program that delivers affordable, high-quality care to millions of low-income children.  It was just six months ago that President Obama signed the renewal of the program into law with much celebration and joy.  It took $35 billion and an election of a new President to get the bill passed (President Bush vetoed it twice); it would be a shame to allow all that effort go to waste unless we're sure that children and their families will be at least as well served under reform.  Most importantly, CHIP has provided a lifeline to millions of families since its inception in 1997, including some who joined President Obama at the White House for the signing ceremony.

On the other hand, if health care reform is done right and works as intended, families will be much better off and CHIP no longer will be needed.  For this to happen, health reform will need to incorporate the key elements of CHIP and its larger companion program, Medicaid, that have made them a resoundingly successful tool for covering many of our country's low-income children:  

These include:

  • A strong benefit package that is designed to address the unique developmental health care needs of low-income children;
  • Robust affordability protections for families, especially low and moderate-income families, and
  • Simple, family-friendly ways for people to sign up for and keep coverage - no endless paperwork and bureaucracy.  
If a health reform system includes these elements, and also extends affordable coverage options to parents, it will be a major step forward for all children and their families.  As my colleague, Martha Heberlein has written at Say Ahhh!, "A large body of research indicates that "providing coverage to parents promotes coverage and access to care for their children as well."  The gains would be greatest among families where parents currently lack insurance, but also in those states that are prone to cutting back their funding for CHIP during difficult economic times.  While most states are remarkably consistent in maintaining their commitment to children's health care, California just recently reminded us that a select handful of political leaders will slash it when they aren't up for tackling harder options.

Are we likely to see these critical elements in health reform?  The House Tri-Committee Bill is a strong bill, and it specifically assures that children won't moved out of CHIP until we're sure they'll get comparable coverage. On the other hand, the rumors out of the Senate Finance Committee are a different matter, raising serious concerns about whether the benefits and cost-sharing protections available to low-income families will be adequate.

At the end of the day, I'm not attached to any one solution or program as the right way to get kids health care coverage.  The success of CHIP arises because it has offered good benefits and affordable coverage to millions of families. It is these two elements - decent benefit and affordable coverage - that matter at the end of the day.

This entry was originally posted on The User's Guide to the Health Reform Galaxy.

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