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.


Children’s Health At Risk Without CHIP Funding, Even If They’re Insured

March 2, 2015

I came belatedly to an enlightening article on the potential end of funding for the Children’s Health Insurance Program. Learned more than I knew when I blogged about it last October.

Professor of Pediatrics Aaron Carroll, who wrote the piece, notes the concern about children who may have no health insurance whatever — about 2.2 million, according to one count. But he focuses mainly on concerns for those who will have coverage because their parents have an affordable family plan purchased on a health insurance exchange.

Or we surely hope so. As you’ve probably read, the Supreme Court has been asked to rule that the federal government can’t subsidize plans purchased on the exchange it established for people who live in states that didn’t create their own.

Many trustworthy experts think the Court won’t. But if it does, as many as five million children could wind up with no affordable health insurance, according to a friend-of-the-court brief filed by the American Academy of Pediatrics and seven other organizations engaged in healthcare services and advocacy for children.

Carroll doesn’t allude to this doomsday scenario. He instead makes several points in favor of renewing CHIP funding, even with the subsidies intact.

The first is that CHIP covers a larger portion of children’s healthcare costs — more than 90%, as compared to 70% in the mid-level silver benchmark plans the Affordable Care Act provides for.

A troublesome difference. Some parents, however, might opt for plans with rock-bottom monthly premiums, but even higher deductibles and other out-of-pockets. This could cause them to forgo needed care — for themselves and perhaps their children.

Cost aside, Carroll raises several concerns about the health care children could receive through plans available on the exchanges. They’re rooted in the fact that the plans, unlike CHIP, aren’t tailored to children’s healthcare needs.

The problem begins with the ACA itself. The law establishes essential benefits that all plans must cover, both those offered directly to individuals and those small employers can purchase. They include pediatric services, with vision and dental care specified.

For reasons known best to the U.S. Department of Health and Human Services, the rules are silent on all but the two named services. And they allow for a separate, optional dental care plan — at an additional, unsubsidized cost — rather than requiring coverage in the overall plan.

I don’t suppose I need to elaborate the potential consequences for low-income children.

More generally, the failure to specify essential pediatric services has allowed states to choose as the basis for their minimum requirements plans that exclude a variety of healthcare services for children.

Carroll cites, among others, services for children with learning disabilities and autism. He also notes gaps in services expressly required, e.g., care of congenital defects, hearing aids and implants for children whom hearing aids can’t help.

Another related variation applies to plans families may purchase. Some, Carroll says, have very narrow networks, i.e., hospitals and physicians whose services the insurance company will pay for.

They’re narrow for providers of pediatric care than care for adults — and especially narrow for providers of specialty care, he adds. The narrow-network plans tend to be cheaper. And we’ve some evidence that many purchasers don’t understand the trade-off.

So parents may learn, when it’s too late, that there’s no in-network children’s hospital or other source of affordable services from doctors trained to treat children with complex, chronic conditions.

What’s rather strange about CHIP is that the ACA extends it through Fiscal Year 2019 — and sets a higher federal match rate for states’ costs beginning in Fiscal Year 2016. Yet it gives the federal government authority to spend money on the program only through this fiscal year.

States may have some leftover funding, but it’s unlikely to last through the year. There’d still be a match for low-income children who’ve been served through Medicaid, rather than separate CHIP programs, but it could be lower. It would definitely be lower for the children states shifted into Medicaid, as the ACA required.

For the rest, there’s no assurance state exchanges would have insurance plans with benefits and cost-sharing comparable to CHIP. Carroll’s analysis suggests that many don’t now. They could, but wouldn’t have to if CHIP funding dries up.

Surely it would be irresponsible to let CHIP funding lapse and see what happens. If children’s health problems aren’t promptly and expertly diagnosed and/or don’t get appropriate treatment, no one can remedy the harms by restoring CHIP or refining the ACA later.

 


Congress Fiddles While Children’s Health at Risk

October 23, 2014

More than two million children may soon have no affordable health insurance — perhaps no health insurance at all. They’re at risk because federal funding for the Children’s Health Insurance Program will expire next year, unless Congress extends it — or fixes the so-called family glitch in the Affordable Care Act.

The number rises to 2.7 million if one also counts children who are eligible for CHIP, but not enrolled and others in Medicaid because some states and the District of Columbia used CHIP funding to expand eligibility, rather than create an altogether separate program.

More than 400 organizations that advocate and provide services for children have urged Congress to keep CHIP fully funded until at least 2019 — even if, as seems unlikely, Republicans agree to fix the glitch.

But say they did. First Focus, which has been pushing hard for renewed CHIP funding, argues that the program would still be needed. First some background, then the reasons why and finally the reasons the issue is more urgent than it may seem.

What is CHIP?

Congress created CHIP in 1997 to close a gap not unlike the one that could soon open. While very poor children qualified for Medicaid, families with somewhat higher incomes couldn’t afford health insurance, especially because relatively few could get it through their employers.

At the time, 23% of children in families below twice the federal poverty line were uninsured. Last year, all but 7.3% of children had health insurance — well over half through CHIP or Medicaid, according to Families USA.

Insurance coverage is far from the whole story. CHIP is designed specifically for children’s healthcare needs. States that operate CHIP through their Medicaid plans must provide a prescribed battery of early and periodic screening, diagnostic and treatment services.

States that have standalone CHIP programs must also provide a wide range of preventive services, as well as outpatient treatment and in-hospital care.

How is CHIP funded?

CHIP is sort of like Medicaid in that the federal government pays a share of the costs states incur in providing health care for those enrolled in their programs. The so-called match varies according to a formula, just as it does with Medicaid. It’s generally higher — on average, 71%.

But unlike Medicaid, CHIP is a block grant. In other words, the federal government gives states just so much, rather than a percent of their annual costs.

If that’s not enough, states can put children on a waiting list. Or they can require families to share more of the costs, though the law puts strict limits on premiums, copays and the like — the strictest for the lowest-income families. Or they can cut reimbursement rates — a cost-saver that tends to limit access to care.

How did the ACA deal with CHIP?

The ACA requires states to shift children whose incomes are at or below 133% of the federal poverty line into Medicaid. For technical reasons, the threshold is effectively 138% of the FPL — currently $27,310 for a parent with two children. The Supreme Court’s ruling that states can’t be compelled to expand their Medicaid programs has no affect on this child coverage mandate.

At the same time, the ACA prohibited states from lowering their CHIP eligibility standards — or changing their applications procedures to reduce enrollment — until the end of Fiscal Year 2019.

It provided for a higher match, beginning in Fiscal Year 2015. But it authorized funding only till then. Seemingly another glitch resulting from the haste to get the ACA passed.

More than half the states and the District cover children in families with incomes at or above 250% of the FPL — and 19 states and the District, with incomes of at least 300% of the FPL.

So it might seem that most states and the District would have to pick up the full cost of health care for a great many children enrolled in their programs unless Congress renews CHIP funding. We thus see the Washington Post editorial board warning of a “potential unfunded mandate.”

Not so, the Vice President for Health Policy at First Focus advised me. States will have no obligation to maintain their CHIP enrollment standards and procedures if Congress doesn’t come through with federal funding.

Why do we still need CHIP?

As I’ve already noted, there’s the family glitch in the ACA. The term refers to an ambiguous provision that the Internal Revenue Service has decided bars families from getting subsidies for health insurance purchased on an exchange if a working member’s employer offers health insurance that’s affordable for him/her alone.

Family coverage, as I’m sure many of you know, is considerably more expensive than coverage for only a worker. So some children — other dependents too — will probably be priced out of the market.

It’s not just premiums we need to be concerned about. A healthcare consulting firm crunched the cost-sharing numbers in 35 states, i.e., the premiums, deductibles and copays, that families are responsible for.

The experts found that families at 160% of the FPL would face out-of-pocket costs averaging seven times what they currently pay if their children were insured through a health plan purchased on an exchange rather than CHIP.

Bigger shocks to the pocketbook for families whose children have special healthcare needs like asthma and diabetes — as much as $5,200 a year per child.

At the same time, the experts found that certain services most CHIP programs provide at no cost to the family would either not be covered at all or require cost-sharing. Only 37% of the health plans reviewed covered hearing exams, while all the CHIP plans did.

And in most cases, families would have to pay an additional premium, plus some further costs for their children’s dental care — a benefit required in CHIP.

What’s so urgent?

The federal fiscal year began only weeks ago. So it might seem that Congress has a lot of time before it has to come to grips with further funding for CHIP.

Most states, however, begin their fiscal years on July 1. Only two and the District begin theirs as late as the fed. So budget drafting is already underway. A big problem when there’s a big question mark about funding for CHIP.

Googling around, one finds many warnings of potential disruption. States unwilling, for obvious reasons, to renew their contracts with health plans. The plans, therefore, not renewing their contracts with pediatricians and other providers. Providers reluctant to accept CHIP-insured patients because they don’t know whether they’ll get paid.

And as Say Ahh! blogger Elisabeth Wright Burak adds, parents in acute anxiety because they don’t know whether their children will have affordable health insurance come fall.

Healthcare lobbyist Billy Wynne foresees troubles ahead in our fractitious Congress — worse as the months go by. We just might help create a proper sense of urgency if enough of us weigh in. A MoveOn.org petition makes this quick and easy to do.

UPDATE: Shortly after I published this, First Focus posted a new letter to Congressional leaders, signed by some 1,200 organizations. It urges them to include a four-year extension of CHIP funding in the next “legislative vehicle” that moves during the lame duck session that will begin soon after the November elections. It says that an estimate 10.2 million children could otherwise have” their health coverage disrupted.”