Protect Children’s Health Program Funds, Advisers Say

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By Victoria Pelham

Congress should extend funding for the Children’s Health Insurance Program, slated to expire next year, until 2022, a federal advisory body said Dec. 15.

The Medicaid and CHIP Payment and Access Commission voted almost unanimously on a package of recommendations. The recommendations include prolonging CHIP outreach and enrollment grants and Affordable Care Act-mandated “maintenance of effort” regulations preserving premiums and eligibility, bolstering federal fund matching in that five-year time frame and removing premiums for children with family incomes below 150 percent of the federal poverty level.

In 2015, 8.4 million children received CHIP-funded health coverage. And without the popular program for limited-income families, more than 1 million children would likely be left without any insurance at all. The MACPAC recommendations aim to ensure that these children don’t fall through the cracks, especially at a time of great uncertainty in health care.

That comes with a price tag: The federal cost of implementing them would be around $13.2 billion over the next five years, according to a Congressional Budget Office estimate. That amount could reach $18.7 billion within 10 years.

But the committee is also proposing ideas for ways to offset some of the costs. The federal government spent $9.7 billion on CHIP in fiscal 2015, matched by $4 billion from states.

A New Lease on Life

The proposed policies would grant CHIP, almost 20 years old, a new lease on life with additional provisions to maintain benefits (such as dental care and hearing exams) while interacting more smoothly with other public programs and attempting to keep costs down.

MACPAC is also asking for a new federal demonstration grant plan to examine different health insurance models in states.

Commissioners said they were eager to look past this “transition period” to a more holistic, robust health-care system for children, but these changes would offer peace of mind to both families and budget-planning states in the meantime.

"[CHIP] has worked; we are entering into a period of change, we don’t have a clear policy direction of what is happening and…we have a group of children we have to protect,” Gustavo Cruz, MACPAC commissioner and senior adviser to Health Equity Initiative in New York, said Dec. 15. “I think we should not go back.”

Following the election of Donald Trump, the possibility of an Affordable Care Act repeal has become increasingly likely, with a replacement plan still unclear.

Along with that has come fear for loss of federal funds to state Medicaid programs and questions over what will happen to the expansion population under the safety-net coverage. CHIP is also a block-grant program that could be subject to cuts.

Overwhelmingly, MACPAC commissioners supported extending CHIP by five years, calling it a worthwhile investment and noting the plunge in child uninsured rates by 16.1 percent since its inception to 6.7 percent in 2015.

“Access is critical,” Commissioner Herman Gray, president and CEO of United Way for Southeastern Michigan, said. “If one believes every child in our country deserves access, particularly access to high-quality care, then CHIP is an unqualified success story.”

Caveats

There were caveats, however. CHIP is a federal-state partnership historically, and many members of the board believed the latest package had elements that were, worryingly, too focused and reliant on federal control—especially the increase to CHIP matching rate over the five-year period.

Others worried that this was more of a “stopgap” than a fair solution. Still, there was just one dissenting vote—Commissioner Christopher Gorton, president of public plans at Tufts Health Plan, a nonprofit in Massachusetts, Rhode Island and New Hampshire.

Gorton said the decision not to approve the commission’s recommendations was not a “repudiation of CHIP,” which had improved access.

But he added they should be looking to leverage the elements of the program that had led to bipartisan support. Instead of prolonging the children’s health-care program, there should be an effort to look for a “better way…designed for all children,” as House Speaker Paul Ryan (R-Wis.) has suggested in his Better Way proposal. That money could be better spent, he said.

Elements of the MACPAC recommendations, Gorton said, “100 percent federalize what should be a state-directed program and leave states with no skin in the game.”

To contact the reporter on this story: Victoria Pelham in Washington at vpelham@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.

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