September 2009 Archives

Its been a busy week here in Washington with action on health care reform. All eyes were on the Senate Finance Committee, which, as Jocelyn Guyer blogged about last week, started working on their markup of the bill. The Committee is in its second week of mark-up with hundreds of amendments and is likely to finish up at the end of the week.

All in all, there has been some good news for kids. The Finance Committee's modified proposal still raises substantial questions about whether the coverage will be affordable for families as Jocelyn discussed. But looking at where kids stand there has been a genuine effort to respond to the many concerns raised by childrens' advocates to ensure that coverage is comprehensive and affordable. The Chairman's mark includes a provision that all children under 250% of the federal poverty level will be eligible for Medicaid's gold standard for kids - the EPSDT benefit. While there are real concerns about how this provision will be implemented (particularly in some of our less enthusiastic states!) this is a major step forward for kids. And the mark includes a requirement that cost-sharing for kids do not exceed current levels in their Child Health State Plan as well as a requirement that HHS certify that the new exchange plans will meet these requirements before kids are allowed to flip over.

There were a few amendments debated of relevance to kids. A Menendez amendment permitting child-only policies to be offered in the new exchanges was easily adopted. A Grassley amendment, which increased reimbursement for pediatric providers in Medicaid, was rejected because it was financed by eliminating subsidies for families from 300-400% FPL. While we would all like to see more resources go to these providers, this was not the way to pay for it.

So stay tuned next week as we see where the Finance Committee goes next. But advocates for children should feel good about the fact that key concerns, while many questions and many more key decisions lie ahead, are being addressed.

What is "affordable" has long been a hot-button issue in the health reform debate. In fact, much of the criticism following the release of the Senate Finance Committee mark centered on this very question. Although there is no consensus on the definition, looking at how much low-income families in public program currently pay in terms of premiums for their children can inform the debate.

In CHIP (and, in some instances Medicaid), states have broad flexibility under federal law to charge up to 5% of family income (approximately $153 a month for a family of three at 200% of the FPL) for all cost sharing, including premiums and copayments. But after more than a decade of experience with CHIP, states have opted to charge far less, reflecting the reality that low-income families otherwise find coverage to be out of reach.

Specifically, as my colleague Jocelyn Guyer noted in a recent entry, to cover two children in CHIP or Medicaid, a family of three making 200% of the FPL pays 0.7% of income towards premiums in the median state. Of the 46 states that currently cover children at 200% of the FPL, thirteen either do not charge premiums in their programs or do not charge families at that income level; the remainder charge between $3 (in Colorado) and $115 (in Minnesota). (Note that the premium in Minnesota is based on income and the number of people covered, regardless of whether it is a parent of a child.)

Under the Senate Finance Committee mark, families making 200% of the FPL would pay approximately $215 per month in premiums. It makes sense that families would need to pay more for coverage that includes the parents, but spending ten times more is likely to mean that coverage is out of reach for many.  

Although it is difficult to make an apples-to-apples comparison between premiums for child-only and family coverage (given that most states do not cover parents at this income level), Minnesota can serve as interesting example because it charges a family premium (based on family income and the number of people covered) and cover parents up to 275% of the FPL. Even in Minnesota, where premiums are at their highest, families are paying significantly less for coverage than they would under the Senate Finance Committee mark.

Even more worrisome, these spending levels do not include other cost sharing, such as copayments or deductibles. In addition to spending 7% of income on premiums, families would be facing additional health care expenditures, further taxing their already stretched budgets.

An amendment included in the Senate Finance Committee mark requires that children cannot be moved from CHIP into private Exchange plans unless it is clear that the state exchange has cost-sharing provisions that are comparable to those in the state CHIP plan.

If this process is well thought out and seamless for families, the CHIP wrap will provide vital protections to low-income families.  But as many Senators have said during the mark-up, the devil is in the details. Working out not only what the definition of affordable is, but how to ensure that the premiums families pay meet the CHIP-comparability requirements, may ultimately determine how well health reform works for low and moderate-income families.

The Senate Finance Committee began its markup yesterday and moved into high gear today, taking votes for the first time on amendments. Senator Baucus released his mark last Wednesday, September 15th and was immediately deluged with over 500 amendments. Yesterday, he released a revised version that incorporates some of the amendments.
From a child and family health perspective, here is where things have landed in the mark to date, and suggestions on what to look for as debate continues throughout the week.
 
1.    Affordability - Despite some improvements in the latest version of the mark, concerns remain that coverage will be out of reach for many families. Although everyone will be required to purchase insurance, families will not have access to truly affordable coverage options due to shortcomings in the proposed subsidy structure. This chart shows how much families could be expected to pay to buy coverage under the Finance Committee mark. Note that this represents spending on premiums only and does not take into account other cost-sharing families would face after securing coverage.


In comparison, a family of 3 at 200% of the FPL (in the median state) is required to contribute less than 1% of family income to buy Medicaid/CHIP coverage for their kids. It makes sense that families would need to pay more for coverage that includes the parents -- typically family-based coverage costs 2 to 3 times the cost of single coverage.  But, in the case of the Finance Committee mark, many families would have to spend 10 times as much just to secure coverage.

We may see amendments from any number of Senators aimed at making coverage more affordable, but the key challenge will be finding a way to pay for the improvements.

2.    CHIP - The mark still envisions moving some 14.1 million kids from CHIP to Exchange plans in 2013 and discontinuing the program, as it now exists. Instead, CHIP would be converted into a program that "supplements" or "wraps" the coverage provided by Exchange plans.  As a result of alarm bells raised by children's advocates and others, the mark now calls for states to be required to use CHIP to supplement the coverage of children with family income at least up to 250% of the FPL.  The wrap will need to raise the coverage to EPSDT levels and provide cost-sharing consistent with current CHIP rules. An additional provision added just yesterday at the behest of Senators Bingaman, Stabenow, and Mendendez sets up a process for assuring that children can only be moved from CHIP into Exchange plans if they will secure coverage that is comparable and that adequate procedures exist to ensure that the wrap will work. (A similar amendment was adopted in the House.)  Even with these improvements, concerns persist about whether low-income children will have access to comparably good, seamless coverage in practice - and not just on paper -- under the new "wrap" structure.
 
To address these concerns and further improve coverage for kids, Senator Rockefeller may offer an amendment that would continue the CHIP program through 2019, expand coverage to 300% of the federal poverty level, require 12-months continuous coverage for children in Medicaid and CHIP, invest in outreach, and promote use of simplified and family-friendly enrollment procedures in Medicaid and CHIP.
 
3.    Medicaid - The mark expands Medicaid to people under age 65 with gross income up to 133% of the FPL. In a move designed to save money, expanded Medicaid coverage would not start until 2014, even though subsidies would become available earlier to more moderate-income families.
 
The mark also requires states to provide these parents and childless adults with a reduced benefit package even though it is well known that they are particularly likely to have chronic conditions, mental health problems, and disabilities. Senators Rockefeller and Bingaman may have amendments aimed at improving the coverage provided to these low-income adults.  

The federal government is going to pay for the bulk of the cost of the new expansions, providing more support initially to states that have further to go in covering people to 133% of the FPL and less to states that historically have done the best job in covering parents and childless adults. In an interesting twist, the revised mark includes 100% federal funding from 2014 to 2019 for the Senate majority leader's home state of Nevada, as well as Rhode Island and Michigan, which have high unemployment rates.

4.    Coverage for legal immigrants - After furious debate, the mark would require legal immigrants to secure coverage and make them eligible for subsidies without facing a 5-year waiting period.  It, however, will not require that states provide Medicaid and CHIP to legal immigrants, which means that very low-income legal immigrants would only have the option to buy coverage through the Exchange with a premium subsidy aimed at more moderate-income people (and considered inadequate even for them).  Senator Menendez is expected to tackle this issue in an amendment, as well as income counting rules that could harm children in mixed-status families. Coming from the other direction, Senators Kyl, Grassley, and/or Ensign are expected to offer amendments that would impose a 5-year waiting period on legal immigrants in the subsidy program or create other barriers to coverage for legal immigrants.

5.    Streamlining enrollment for low-income people - In order to keep the cost of the bill down, the mark dropped measures to simplify enrollment in Medicaid and CHIP, such as use of 12-months continuous eligibility and electronic verification of income.  An amendment by Senator Stabenow was included in the revised mark requiring that HHS issue enrollment standards through guidance to states (covering such issues as documentation of income, continuous eligibility, and automatic renewal), but it is unclear how much "teeth" it will truly have. The mark also requires states to establish "seamless" enrollment between Medicaid and Exchanges, but, again, critical details are missing as to what this would mean. Senator Bingaman may offer or discuss an amendment that would include some of the simplification measures that currently are absent from the mark.

We will continue to report on changes to the mark as action continues this week.

Jon Peacock, Wisconsin Council on Children and Families

The Children's Health Insurance Program Reauthorization Act (CHIPRA) approved by Congress early this year gives states financial assistance and policy options that help states maintain and improve coverage of kids.  One source of financial assistance that has gotten less attention is an enhanced federal match rate for interpretation and translation services.

The new rate, which is 75% for children in Medicaid (and potentially slightly higher for kids covered by CHIP), applies to translation and interpretation services needed to assist children in applying for coverage or at renewal, or to improve communication when care is being provided. Like some of the other parts of CHIPRA, this is an area where there is still some uncertainty, but it's important to start thinking about how states can take advantage of the increased federal funding for these services.

Initially, it was unclear to me whether or to what extent the higher federal matching rate would help states like mine (WI) that primarily use managed care, since the managed care entities (MCEs) generally get one flat rate for each enrollee, rather than reimbursement for each service. However, after preliminary conversations with WI DHS staff and other experts, and after recent guidance from the Centers for Medicare and Medicaid Services (CMS), it appears that there are at least 4 sorts of ways that the higher matching rate for translation can be of assistance in all states:

• to translate outreach documents;
• to help support bilingual workers who assist with applications or renewals;
• to improve communications with non-English speakers when kids are receiving fee-for-service care, such as emergency Medicaid services; and
• to provide increased federal reimbursement (to the state) for spending attributable to interpretation services provided by MCEs when caring for children.
  

In recent weeks CMS has issued several documents that provide guidance to states on how CHIPRA will be interpreted and how states can take advantage of it. One of those, issued on Sept. 3, is a Q & A format document that addresses - among other issues - the matter of how the enhanced federal match for interpretation services will apply to MCEs. At question # 9, CMS says:

"States will be permitted to claim the enhanced match for that portion of the capitation rates paid to MCEs that can be documented as attributable to the cost of translation and interpretation services under the contract. CMS will work with States to develop an allowable methodology to collect the information necessary to claim this higher matching rate for the eligible portion of their managed care payment rates."

As we wait for additional CMS guidance on some aspects of the new federal law, it isn't too soon for states, advocates, and providers to begin planning how they can utilize the enhanced federal matching rate to more effectively serve children in families that are not proficient in English.

The views expressed by guest bloggers do not necessarily reflect the views of the Center for Children and Families. 

Just two months after freezing enrollment in the Healthy Families Program and initiating a waitlist, enrollment has reopened in California Children's Health Insurance Program (CHIP). A budget shortfall of just under $200 million has been plugged by a generous contribution from the state's First Five Commission, increased family cost-sharing, and a new premium tax on Medi-Cal (Medicaid) managed care plans, which passed the legislature (AB 1422) and is awaiting the Governor's expected signature.

This turn of events illustrates how committed the public is to covering all children.

State child health advocates and other stakeholders, including the managed care plans in California and the Managed Risk Medical Insurance Board (which administers Healthy Families) worked with policymakers and the First Five Commission to find a solution. At one point the situation was so dire, it was likely that in addition to waitlisting new applicants, children who were due to renew their eligibility on their annual anniversary date would not be allowed to continue coverage. The loss of coverage at renewal due to a funding shortfall had never happened in the twelve-year history of CHIP.

Just this week, CCF released a report "Weathering the Storm" detailing action that 23 states have taken to improve children's health coverage. Only three states were noted as slipping in their efforts to cover more kids, California being one of them.  We are pleased to remove California from that list as Healthy Families works to clear the backlog of applications for nearly 90,000 children.

In 2008, the number of uninsured children in the United States hit the lowest level in two decades.  If Congress weren't in the middle of a fierce debate on health reform, there would be time for everyone to celebrate a remarkable achievement and maybe even pause to reflect on how it was accomplished.

To paraphrase David Byrne of the Talking Heads: "We might ask ourselves, how did we get here?"  We got here with federal fiscal support, leadership, state ingenuity and a willingness to make a sustained effort to address the issue of uninsured children.

The states deserve a lot of credit.  It's been impressive to see how state policymakers from across the political spectrum have rallied to support children's coverage, despite facing tough economic obstacles in recent years.   Even in the midst of terrible fiscal problems, the vast majority of states have maintained children's coverage in Medicaid and CHIP.  This year so far, a whopping twenty-three states found a way to expand or improve children's coverage, proving what can be accomplished when the federal government is a strong fiscal partner.

Federal policymakers deserve a big share of the credit by providing strong fiscal incentives for states to strengthen Medicaid and CHIP coverage for children.  Earlier this year, Congress and the Administration took steps to sustain the momentum by enacting the Children's Health Insurance Program Reauthorization Act and increasing the federal matching rate in Medicaid to prevent cutbacks in eligibility.  These initiatives have already proven to be successful and are providing a positive impact across the country.  

Children's health care advocates have also done a great job of making sure the needs of children were not relegated to the back burner as he Recession unfolded.   They worked tirelessly in Washington, D.C. and in state capitols across the country to make sure policymakers couldn't ignore the children.  As a result, the lifeline of Medicaid and CHIP were available to uninsured children just when they needed it most.

Credit also goes to all the families who were willing to publicly share their private pain of facing health care costs without adequate insurance coverage.  By sharing their stories, they reminded us that any one of us could face the same situation if one of our children fell ill and our private coverage came up short, we lost our jobs and our access to affordable family coverage or our wages just didn't keep up with the steep increases in our premiums.  And, in some cases, they paid a heavy price for their willingness to go public, including below-the-belt attacks by bloggers.

There is enough credit to go around on this good news for uninsured children but there is a broader lesson to be learned.  If we can drop our ideological straight jackets and work for the common good, we can move forward together and continue to make progress.   If the federal government puts its money where its mouth is and state governments cut red tape and focus on serving urgent human needs, children and their families can get the quality, affordable coverage they need.

This good news on the "uninsurance" rate for children should reinvigorate those who are working to make sure not only children but their parents and other adults have the opportunity to secure affordable health insurance.  It's time to move beyond "same as it ever was" by ending the bickering and finger pointing.  It is imperative that States, Congress and the Administration build on the success of CHIP and Medicaid and upon the remarkable progress they have made in combating the "uninsurance" problem among children.

The new Census report shows that the number of uninsured children in the United States is at the lowest level since 1987.  In 2008, there were 7.3 million uninsured children, a decline of 800,000 from 8.1 million in 2007. This progress occurred despite reductions in private health insurance coverage and a difficult economic climate according to data released by the U.S. Census Bureau today.

This is a testament to the effectiveness of public programs in covering children as a majority of states maintained or strengthened their Medicaid and/or Children's Health Insurance Programs despite tough economic times.  In 2008, the year reflected in the Census report, 19 states moved forward in covering more children.  This trend continues in 2009 as a result of enactment earlier this year of the Children's Health Insurance Program Reauthorization Act (CHIPRA) and the economic recovery package.

While the Census figures paint an encouraging picture for uninsured children, the numbers are much more bleak for parents and other uninsured adults.  The health and wellbeing of children depends on whether they have access to affordable, high-quality health coverage, but can also be dramatically affected by the health of their parents and the financial stability of their families.

To continue the positive momentum for children and to address the critical need for affordable health coverage for their parents and other adults, Congress should quickly pass meaningful health reform legislation.

As health reform discussions continue, one key question that will be addressed is what benefits will children be eligible for and how much will they cost?  Because they are growing and developing, children have a distinct set of health care needs that evolve over time and differ from those of adults.  Moreover, while as a group children are relatively healthy, one in seven has special health care needs.  Given that under reform, there is a lot of discussion about covering kids in private plans, it is particularly important to consider how well these plans might meet children's health care needs.

Today the Kaiser Commission on Medicaid and the Uninsured released a paper CCF co-authored with our colleague at the Georgetown Health Policy Institute, Karen Pollitz, entitled "Children and Health Care Reform: Ensuring Health Coverage Meets Their Needs". Jacob and Isabel are the protagonists of this report - we look at their health care needs in a typical year, and see how they would be fare in the Federal Employees Health Benefits (FEHBP) Blue Cross/Blue Shield Option - the private plan that Members of Congress receive - and a relatively generous one at that.

Jacob is a 7 year old boy who loves playing baseball and is generallly healthy, but has asthma and allergies. Isabel is a 13 year old girl who has cerebal palsy and needs extensive services to ensure that she is able to function optimally and attend school - where she has been doing extremely well. One of the key findings of the report is that a family with a relatively healthy child may still face significant out-of-pocket costs under the FEHBP Blue Cross plan. While most of the services Jacob uses would be covered, we estimate that Jacob's family would spend about $2,020 in out-of-pocket costs under the BCBSSO plan to meet his annual health care needs in the past year.

A child with special health care needs , like Isabel, can face significant gaps in coverage and large out-of-pocket costs under the BCBSSO plan.  Isabel's family faces annual out-of-pocket costs in excess of $9000. Some of her services are not covered, and sometimes her family has to go out of network to find the specialist she needs.

In contrast, Medicaid fully covers children's acute and long-term care needs with no or very limited cost-sharing requirements.  Under Medicaid's EPSDT benefit, all of the needed care for both Jacob and Isabel would be covered.  The EPSDT benefit covers all medically necessary care for children, which means it fully covers preventive and primary care, including dental, hearing, and vision care, as well as all acute care needs and long term care needs for kids that need it.

These findings illustrate that the content of coverage provided under reform will have significant implications for children's access to care and their families' financial security.  As policymakers consider standards for coverage provided to children under reform, it will be important for them to consider not only what benefits will be covered, but also the limits that will apply to covered benefits and required cost-sharing amounts, including deductible, copayment, and coinsurance charges.

A primary reason many people lack insurance coverage is that they cannot afford it. For the last decade, growth in premiums has far outpaced growth in wages and the cost of private coverage is often out of reach for low- and moderate-income families. One goal of health reform is to provide subsidies for these families who are unable to afford coverage on their own.

As the negotiations continue and the costs of reform are considered, the income level at which subsidies should end has become a point of debate; the House would provide subsidies to 400% of the FPL, while the Senate Finance Committee has proposed limiting subsidies to those making up to 300% of the FPL.

A recent issue brief from the Economic Policy Institute focuses on the impact of reducing subsidies to levels promoted by the Finance Committee.

The authors find that when premium subsidies are capped at 300%, the median family in 18 states would no longer be eligible for financial support and families in five states would spend at least 19% of their income on premiums. (An important note - this 19% reflects spending on premiums alone and does not take into account other out-of-pocket spending, such as deductibles and co-payments, thereby underestimating the full financial burden these families would face.) However, if subsidies were instead capped at 400%, the median family in all but three states would be eligible for some level of assistance.

Forty-two million individuals have incomes between 300% and 400% of the FPL. Cutting subsidies for them would make coverage less affordable, undermining one of the fundamental goals of health reform and leaving many without coverage.

"Fix what's broken and build on what works."

It's President Obama's mantra for health reform.  It may be hard to see how Congress will accomplish that when so far we've only seen proposals that would eliminate (as we know it) a program that works well--CHIP--and move the children it covers to Medicaid or Exchange health plans.  But, in fact, health reform could build on CHIP while largely doing away with the program.  How?  By taking the lessons learned from 10 years of running CHIP programs across the country and applying them to the coverage available under health reform.  The name and structure of the program matter little as long as kids are getting quality, affordable, accessible care.

There is a quiet group of professionals that knows these lessons well, since they have been providing access to affordable, quality health coverage to uninsured children and families for years. They are the state Medicaid and Children's Health Insurance Program directors.  As national policymakers look for ways to improve our health care system, they should follow President Obama's advice to "build on what works" and look to these professionals for their important lessons.  Catherine Hess and Maureen Hensley-Quinn of NASHP worked with the nation's CHIP directors to draw out a number of these lessons from CHIP that can inform health reform.  In a new State Health Policy Briefing, they identify the successes that should stay a part of children's coverage efforts and suggest some ways to assure a smooth transition between existing coverage programs and the new ones envisioned in health reform.  It's worth a read for those who care about keeping kids' coverage strong.

Back in the spring, there was a lot of talk about whether reconciliation could be used as a vehicle to get health reform through Congress (particularly the Senate). The FY 2010 budget resolution ultimately left the option open for Congress to use reconciliation for health reform if an agreement couldn't be reached by October 15th. The issue has been on the back burner while Senate negotiators continue to try to forge a bipartisan plan but it is moving to the forefront as we move closer to the deadline.

In a recent blog entry on the Huffington post, Representative Keith Ellison (D-MN) argued that conservative intransigence gives policymakers the green-light to move forward with moving health reform through using the reconciliation bill. As we approach the deadline, we thought it would be a good time to refresh our understanding of the reconciliation process by re-posting the comments by guest blogger Edwin Park from the Center on Budget and Policy Priorities.

Here's a condensed version of Edwin's earlier post:

What is Reconciliation?

First, the basics.  A reconciliation bill is a single piece of legislation that typically includes multiple provisions (generally developed by several committees) all of which affect the federal budget -- whether on the mandatory (or entitlement) spending side, the tax side, or both.  Under House and Senate rules implemented when the Democrats took control of Congress in 2007, reconciliation cannot be used for legislation that would increase the deficit so any reconciliation bill must be fully offset, that is it must include mandatory savings and/or revenue increases that pay for any higher spending and/or tax cuts in the bill.  Reconciliation, of course, can also be used, as it was originally, to reduce the deficit.  Reconciliation is generally used to speed passage of legislation through the Senate by providing special procedures that make it easier for a bill to pass.