Doctors, children’s advocates, and public health experts from across the country are urging Congressional leaders and President Barack Obama to extend the Children’s Health Insurance Program (CHIP), which provides health coverage for 8.4 million American kids and is slated to expire in 2015.
“Inaction by Congress would mean a total reversal of fortune for the millions of children who use CHIP,” wrote signatories in a letter to Obama and Congressional leaders from both parties. “As you set your priorities for the coming year we urge you to make the continuation of CHIP an important priority.”
CHIP was passed on a bipartisan basis in 1997. The state-federal match program provides health insurance to children from lower-income families who don’t receive affordable family coverage through an employer, but make too much money to qualify for Medicaid in their state. The program is largely credited for a drastic cut in the children’s uninsurance rate over the past two decades.
At the time of its enactment, there were over 10 million uninsured children in the United States — 7.1 million of whom were beyond the bounds of Medicaid eligibility but too poor to afford private insurance. About 23 percent of children from families making less than twice the poverty level were uninsured in 1997. Today, that number has nearly been cut in half, and the uninsurance rate for children in general has plummeted to just nine percent.
Before the passage of the Affordable Care Act, President Obama signed a six-year reauthorization of CHIP in 2009. But advocates warn that even Obamacare won’t be enough to cover the estimated 12.7 million children who would lose their coverage in 2016 if CHIP expires.
Part of that is because of a glitch in the health law regarding family coverage. The ACA requires large employers to offer insurance that covers, on average, 60 percent of a worker’s medical costs and monthly premiums that don’t exceed 9.5 percent of an employee’s income. Unfortunately, that 9.5 percent cap applies only to single worker coverage. A company can offer a far pricier family plan that exceeds that threshold without facing a fine for failing to comply with Obamacare.
Even worse, such an employee wouldn’t qualify for subsidies to go buy insurance through an ACA marketplace because he or she technically has a valid offer of insurance through an employer. Nonprofit advocacy group First Focus estimates that this so-called “family glitch” would lock nearly two million children out of the insurance market if CHIP expires.
That’s bad for national health care spending, too. A review by the American Academy of Orthopedic Surgeons about CHIP disenrollment in Phoneix found that “a 10 percent disenrollment from the Phoenix metropolitan area’s Medicaid/SCHIP program would increase overall healthcare costs to the community by $3.5 million or $2,121 for each disenrolled child… mainly due to the shift from less expensive, preventive medicine and ambulatory care to more emergent and inpatient care.”
But even families who qualify for Obamacare subsidies may not find coverage that’s as good for children as CHIP in the health law’s nascent years. That’s because government CHIP plans have significantly lower premiums and cost-sharing than private insurance, and also tend to cover a higher share of medical costs. The benefits packages are tailored specifically for children and states have already had years of experience in establishing robust provider networks that have a sufficient number of pediatricians and pediatric specialists.
“If the CHIP funding cliff is not addressed, important gains in children’s coverage would be lost,” concluded First Focus in an issue brief on CHIP reauthorization. “While the ACA holds great promise for the millions of Americans who have lacked an affordable coverage option, especially uninsured adults, it will take time and experience to know how new coverage options, eligibility rules, enrollment systems, policies and procedures, benefits, plans and provider networks are working to meet the unique health and developmental needs of children.”