CHIP Renewal: Will the Perfect Be the Enemy of the Good?

April 2, 2015

Last week, the House passed a bipartisan (yes, really) bill that would, among other things, extend the Children’s Health Insurance Program for two years, with the higher matching rate that was part of the Affordable Care Act. The Senate will vote on the shortly after members return from their two-week break.

The bill is far from perfect. CHIP supporters and others of progressive leanings will have to decide whether — and at what point — to say it’s good enough.

A Lot at Stake and the Outcome Uncertain

Some Senate Democrats, urged on by lead children’s advocates, have insisted on a four-year CHIP extension. That would, of course, tend to avert another go round in 2017, when we could have a Republican President. And it would enable states to plan for the longer term.

But withholding support for the package could kill it, especially because it’s under fire for reasons that have nothing to do with CHIP, e.g., an offset that would raise Medicare premiums for better-off beneficiaries, the usual ban on using federal funds for abortions, except in certain limited cases. And, of course, some of those self-identified deficit hawks object because the costs aren’t fully offset.

Defeat of the bill would leave not only CHIP imperiled, but also other programs that benefit low-income children, including the Maternal, Infant and Early Childhood Visitation program, the Transitional Medical Assistance program and a provision in the ACA that funds community health centers.

Why the Bipartisan Deal Now?

As I’ve written before, CHIP will receive no more federal funding after September unless Congress extends it. That, however, is not why we’ve got votes on an extension now. There’s an urgent need, as there is virtually every year, to prevent the Sustainable Growth Rate from taking effect.

Congress enacted the SGR nearly 20 years ago in an effort to control Medicare costs. It provided a formula to curb spending on physicians’ services to Medicare beneficiaries.

But physicians claimed — perhaps, in some cases, rightly — that the reimbursements wouldn’t even cover their costs of providing care. So Congress temporarily suspended the SGR, but left the provision otherwise intact.

And it’s done the same ever since, allowing instead very small — or in some years, no — rate increases. The so-called doc fix has become increasingly necessary because, without it, all the annual rate reductions would take effect. Doctors are thus hypothetically facing a rate cut of 21% — hypothetically because, of course, Congress won’t let that happen.

The package now pending in the Senate would, at long last, repeal the SGR, but not the intent because it establishes a new reimbursement rate scheme.

Risks for CHIP

We’ll, of course, have another doc fix if the final package doesn’t pass. But we can’t count on full funding for CHIP — let alone, at the higher matching rate. For one thing, a bill brewing in the Senate would not only repeal that rate, but cut program funding in several other ways.

For another, we’ve now got a House budget plan that would fold CHIP into the same block grant as Medicaid. States would thus have to cope with an ever-greater funding squeeze. And they’d have the “flexibility” to eliminate benefits and/or beneficiaries.

Fund Cut-Off for Home Visiting Programs

Meanwhile, funding for MIECV would remain in limbo. And it expires at the end of this month. The pending bill would extend it until October 2018, at the same funding level it has now.

The program is quite small. It has nevertheless helped agencies establish and expand programs that offer poor and other at-risk pregnant women and parents of young children the opportunity to have trained professionals come to their homes, assess their family’s needs and then provide and/or refer them to a variety of services.

These include, but are by no means limited to health-related services, e.g., advice on infant care and child nutrition, screenings for developmental disabilities.

States reported serving about 115,000 families last year — surely a small fraction of those that could benefit. Hard to believe that as many would be served if Congress lets funding for the home visiting program dry up.

Other Health-Related Programs

The bill would convert two time-limited healthcare law programs that benefit low-income people into permanent law.

One — Transitional Medical Assistance — enables families to temporarily remain in Medicaid after they’ve moved from welfare to work. That move can happen when they’re by no means earning enough to afford other health insurance because state income eligibility thresholds for welfare, i.e., Temporary Assistance for Needy Families, are so low.

TMA doesn’t altogether take care of the problem, especially in states that have refused to expand their Medicaid programs. But it gives parents some additional time to increase their income — or find an employer that offers health insurance they can afford.

The other program provides states with funds to pay for the Medicare Part B premiums of qualifying individuals. Since I’m focusing here on support for children’s health and wellbeing, I’ll refer those interested to a short, clear summary by the Center on Budget and Policy Priorities.

Lastly, the bill would extend the funding for community health centers initiated by the ACA. It’s helped support preventive care and treatment for 21.7 million people, according to the latest (somewhat outdated) figures from the U.S. Department of Health and Human Services. Nearly a third of those people were children.

A Difficult Balancing Act

What all this means, I think, is that advocates for children — and for appropriate, affordable health care generally — have to balance priorities and prospects. They understandably want CHIP funded at the higher matching rate for the full four years the ACA envisions. Backing off now could doom efforts to get that in the Senate.

On the other hand, once Congress has taken care of the SGR problem — permanently or just for another year or two — chances it will renew CHIP at the higher matching rate don’t look good. What will happen to the other programs that benefit low-income children is a question mark.

Recall that both House and Senate Republicans seem set on drastically reducing federal spending (except for defense, of course). Not a good time to leave some many healthcare programs for vulnerable people wide open.

 

 

 

 


Be Careful What You Wish For

March 5, 2015

So here I was elaborating on reasons Congress should renew funding for the Children’s Health Insurance Program. No sooner had I finished the post than the Center on Budget and Policy Priorities published a damning brief on a draft bill that would — sort of.

The draft is especially worrisome because it’s the product of the chairmen of the committees that have primary responsibility for CHIP — Senator Orrin Hatch, who heads the Senate Finance Committee, and Congressman Fred Upton, head of the House Energy and Commerce Committee.

The Hatch-Upton bill would significantly reduce federal funding for CHIP in several different ways. It would, among other things:

  • Altogether deny a federal match for the healthcare costs of children in families with incomes above 300% of the federal poverty line — currently $60,270 for a single parent with two children. Eighteen states and the District of Columbia currently cover children at this income level.
  • Use the regular Medicaid matching rate, rather than the higher CHIP rate for children whose family incomes are between 250% of the FPL and the 300% cut-off. If the law were in effect now, 27 states and the District would lose, on average, 13% of their match.
  • Repeal the higher CHIP matching rate that the Affordable Care Act established for 2016 through 2019, when CHIP would officially expire, unless renewed. So all CHIP programs would take a hit, even those that cover only lower-income children.

States and the District would have have to pick up more of the costs of covering children whose family incomes aren’t low enough to qualify them for Medicaid — and more of some of those who are because the ACA provided the higher CHIP match for children states had to shift into Medicaid.

Or rather, they would if they decided to keep their CHIP programs as they are. States could, if they chose, shift children back from Medicaid to separate CHIP programs. This, CBPP says, would probably mean less comprehensive coverage and higher out-of-pocket costs.

More generally, states could change their laws to make fewer children eligible for CHIP because the Hatch-Upton bill repeals a so-called maintenance of effort provision in the ACA that prohibits them from doing this before the end of the 2019 budget year.

States could also impose long waiting periods — up to a year — before enrolling children in CHIP. They could do this for virtually all families who’d had — or “declined an offer of” — group health insurance.

States can now require waiting periods of up to 90 days, but not for all children. They must waive the waiting period for “good cause,” e.g., if the child loses health insurance because a parent dies or can no longer get coverage through an employer-sponsored plan. Children with special healthcare needs must also be able to get CHIP coverage immediately.

Only 14 states have opted for a 90-day waiting period. Thirty-three and the District have no waiting period at all. But who knows what they’d do if faced with the funding crunch the draft bill would create?

The MOE repeal and the extended waiting period option are, of course, other, though less direct ways the Hatch-Upton bill would cut federal spending for CHIP.

Still another is by omission, rather than commission. The bill would fail to renew Express Lane Eligibility — an expiring tool that allows states to use information they’ve already collected, e.g., from SNAP (food stamp) applications, to determine eligibility for Medicaid and CHIP.

This can not only reduce administrative costs, but boost enrollment — and get children the health insurance they need quicker, according to an evaluation for the U.S. Department of Health and Human Services.

Lest we should miss the intent, the bill also repeals a provision in the current CHIP law that offers states a higher match rate for interpretation and translation services so that language barriers don’t become barriers to enrollment.

In short, as the Executive Director of Georgetown University’s Center for Children and Families says, the “proposal comes with fine print that could reverse our nation’s progress in covering kids.”

Not only covering them, but as I earlier wrote, ensuring that they can receive the full range of healthcare services they need at affordable rates. By this measure, as well as others, the draft bill is hardly what we should wish for.