Children's Health Insurance Program (CHIP) in Peril
The Children's Health Insurance Program (CHIP) was established in 1997 to provide coverage for uninsured children who are low-income but above the cut-off for Medicaid eligibility. Funding will expire at the end of FY 2015 (September 30, 2015) unless legislative action occurs. Without continued funding, millions of children would lose CHIP coverage and have to find coverage elsewhere; an estimated two million could become uninsured.
What has been the impact of CHIP?
The following information is taken from a 2014 Kaiser Family Foundation report, The Impact of the Children's Health Insurance Program (CHIP): What Does the Research Tell Us?
Coverage: In 2012 (latest data available), 8 million low-income children were covered by CHIP. All in all CHIP and Medicaid provide coverage for more than 1 in every 3 children. CHIP has helped to reduce the # of uninsured children from 14% in 1997 to 7% in 2012.
- CHIP and Medicaid cover more than half of Hispanic children (52%) and Black children (56%), compared to about one-quarter of White (26%) and Asian (25%) children.
- Children with special health care needs (CSHCN) are more likely to be eligible for CHIP/Medicaid and the services and support needed by CSHCN are more likely to be covered.
Benefits and out-of pocket protection: CHIP benefits include dental care as well as physical, occupational, and speech and language therapies. Out-of-pocket costs for families are greater in subsidized Marketplace plans than they are in CHIP.
- Studies show that out-of-pocket costs under CHIP/Medicaid would have increased from $42 to $314 under a private plan.
- Under CHIP, total family out-of-pocket expenses are capped at 5% of family income.
- Some studies show that families of low-income CSHCN may not be able to afford higher out-of-pocket costs under other programs.
Access to care: Children with Medicaid and CHIP have much better access to primary and preventive care and fewer unmet health needs than uninsured children. However, disparities may still exist between CHIP/Medicaid and private insurance for specialist and dental care.
Outcomes: CHIP/Medicaid outcomes point to reductions in avoidable hospitalizations and child mortality. Improved health has meant improvements in education and economic well-being.
Families: The parents of children enrolled in Medicaid or CHIP are more likely than low-income parents of children with job-based coverage to say they are very satisfied with the quality of care, the scope of benefits, and affordability.
In early February 2015 bills to extend funding for CHIP were introduced in both the House and Senate. The Senate bill (S. 522) simply extends funding through FY 2019 and extends other aspects of current law. For a section-by-section summary of the Senate bill, click here. The House bill (H.R. 919) extends funding and makes some other changes to increase state flexibility. Both bills maintain the 23 percent "bump" in federal matching rates and the maintenance-of-effort provision so that states do not change Medicaid and CHIP eligibility standards.
Child health groups, including the Children's Defense Fund, National Association of Pediatric Nurse Practitioners, and the Children's Hospital Association, along with nearly 40 governors have been pushing for an extension of CHIP funding as soon as possible, so state legislatures can plan accordingly. One possible legislative vehicle for the CHIP extension is the "doc-fix" legislation needed to forestall a significant cut in Medicare physician payments, which is considered to be legislation that must be passed by March 31.