CHIP was part of the Balanced Budget Act of 1997. In regard to Medicaid and Medi
ID: 3853900 • Letter: C
Question
CHIP was part of the Balanced Budget Act of 1997. In regard to Medicaid and Medicare, the balanced budget debate was about how to cut costs, improve quality, and reduce fraud and abuse.
Overall, almost three-quarters (74%) of uninsured children live in low income families (below 200% of poverty). However, the majority of uninsured children (65%) live in families with at least one full time worker. These families often are not offered coverage by an employer or cannot afford the premiums. The full cost of employer sponsored family coverage, $13,871 in 2010, has more than doubled since 2000 (Kaiser Family Foundation, 2012).
Another major concern was the growing number of uninsured, especially those who were not eligible for Medicaid but did not have the means to pay for or access healthcare insurance. The federal government gave the states the option to expand the Medicaid program in the state or to start a new program to provide the necessary coverage to children not eligible for Medicaid. The state can also establish a combination of expanded coverage within the Medicaid program and a separate program to cover children who are not eligible for Medicaid. Similar to Medicaid, the states operate CHIP with matching federal funding. The federal government provided block grants to the states to fund the CHIP programs.
CHIP provides a comprehensive benefits package to children. Benefits covered are the same as the Medicaid benefits package and also includes Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services, and all services like mental and dental health that are necessary from medical point of view.
States can cover children who are up to 300% of the Federal Poverty Level (FPL). Twenty-two states provide coverage at 200% of FPL, twenty-four states cover up to 250% of FPL; and the remaining four states cover at rates below 200% of FPL.
The federal government matches state CHIP funds at rates 15% higher than Medicaid, but states receive a capped allotment of funds, as opposed to uncapped disbursements from the federal government. States are required to enroll anyone who meets the eligibility requirement for Medicaid, but enrollment in CHIP can be capped in order to stay within the budgeted allotment.
Political Challenges of the CHIP(Children's Health Insurance Program)
PLEASE ANSWER
On the basis of your understanding about CHIP, create a 2- to 3-page report in a Microsoft Word document on the political challenges regarding the CHIP.
Your report should be created using the following guidelines:
Review at least two articles on the given topic, and write a review for each article.
Evaluate the main points of the articles, and relate them to your course and text readings.
Compare and contrast each article reviewed. Which of these articles do you find more relevant from a professional point of view, and why?
[Note: Find at least two sources of information for the topic utilizing such resources as the South University Online Library journal databases (for example, Cumulative Index to Nursing and Allied Health Literature (CINAHL) or ProQuest) or reputable Internet resources. Do not use the text or the assigned articles for this assignment.]
Support your responses with examples.
Cite any sources in APA format.
Submission Details
Explanation / Answer
The Children's Health Insurance Program (CHIP) was enacted in 1997 to extend health coverage to children in poor families with modest incomes too high to qualify for Medicaid. The Affordable Care Act now offers many of those same families federal subsidies through the health insurance exchanges, calling into question whether the program should be continued over the long term.
CHIP helped lower the uninsured rate among low-income American children from 25 percent in 1997 to 13 percent in 2012, and the program has strong bipartisan support at the state and federal level. Still, some states – particularly those that have opted to expand Medicaid to more low-income adults – may decide that families would be better served by enrolling everyone in the same insurance plan.
What is CHIP?
CHIP is a $13 billion federal-state partnership covering nearly 8 million kids in low-income families. Under CHIP, the federal government bears a higher percentage of the overall cost than it does under Medicaid, averaging 71 percent nationwide, compared to about 57 percent for Medicaid. Another difference between CHIP and Medicaid is that CHIP is a block grant, not an entitlement. That means states can create waiting lists for the program when state revenues run short. By contrast, states must provide Medicaid coverage to all eligible applicants, no matter the cost. (Under Medicaid, states can set their own income eligibility rules for non-disabled adults, but they must cover children, pregnant women and disabled adults up to federally-specified income levels.)
How does the Affordable Care Act affect CHIP?
The Affordable Care Act (ACA) extends funding for CHIP through Sept. 30, 2015. At that time, the federal matching rate would increase by 23 percentage points to 94 percent, lowering the average state share of funding to 6 percent. But that's only if Congress extends funding for the program beyond 2015.Physicians, advocates for children and other groups recommend Congress extend funding to 2019, when the federal law gives states the option of dropping the program.
Currently, if a child qualifies for CHIP, the family cannot receive federal tax subsidies to cover the cost of including the child in their federally qualified health plan under the ACA. However, if a state decides to discontinue its CHIP program, families with children who were previously covered by the program could become eligible for federal tax subsidies to cover their children under one policy.The ACA also required states to shift children ages 6 to 19 in families with incomes between the poverty level ($23,550 for a family of four) and 138 percent of poverty out of CHIP and into Medicaid by last Jan. 1. The rationale was that parents and children would be best served if they were covered by the same insurance plan, with the same doctors and hospitals and enrollment rules.
Since the federal health law assumed that all states would expand Medicaid to adults with incomes up to 138 percent of the poverty level, it made sense to cover the children in those families under the same program. Although nearly half of all states have chosen not to expand Medicaid to adults, children in those states ages 6 to 19 will still be moved into Medicaid. Nationwide, the transfer from CHIP to Medicaid will affect more than 1.5 million low-income children, an enrollment reduction of nearly 30 percent from the CHIP program.
Why would states eliminate CHIP?
Although states pay only a small share of the cost of CHIP, coverage of the same low-income families would be cost-free for states if they eliminated CHIP and directed families to the health insurance exchanges. In addition, some states may decide to dismantle CHIP to simplify public insurance options for families who may already have members enrolled in Medicaid and private insurance on the exchanges.However, states may choose to continue CHIP because of its bipartisan support and proven track record. In general, kids are cheap to cover because they are healthier than adults. States' decisions on CHIP will rest in part on the relative success of insurance exchange policies at enrolling kids and keeping them healthy.
What other ACA provisions target children?
The ACA primarily aims to insure more adults, including parents. In the process, a substantial number of uninsured children are expected to get coverage as their parents learn more about federal and state subsidies.
According to a study by the Urban Institute, the federal health law could result in new coverage for as many as 3.2 million uninsured children because of tax credits offered on health insurance exchanges and overall outreach efforts. In addition, the law requires insurance companies to provide improved benefits for kids, including preventive, dental and vision care, and behavioral health services.
Does the ACA make it easier for low-income parents to get coverage for their kids?
Yes and no.
The ACA makes it easier for states to maintain or expand their CHIP programs by providing more federal funding. But what is considered an error in the law – the so-called "family glitch" – is expected to prevent as many as 56 percent of low-income families who qualify for CHIP from getting federal subsidies on health insurance exchanges if CHIP were to end.
Under the law, anyone who is offered "affordable" insurance by their employer is not eligible for federal tax credits. Affordable insurance is defined as coverage for an individual that does not exceed 9.5 percent of a worker's income.
But there is no limit on the worker's share of premiums for family coverage, which typically costs close to three times as much as individual coverage. That means workers who can't afford employer-offered premiums for family coverage will have nowhere to go except CHIP or Medicaid.
Will exchange coverage cost families roughly the same as CHIP?
One state serves as an example. Arizona began dismantling its CHIP program in 2009, before the ACA was enacted. Most children were transferred to the state's Medicaid program, but about 14,000 children whose families had incomes too high to qualify for Medicaid were directed to find alternative coverage this year.It is not known how many of those families purchased policies on Arizona's federally-run insurance exchange. But a new study from Georgetown University's Center for Children and Families found that the federally subsidized policies they would have qualified for had substantially higher out-of-pocket expenses, including co-pays and deductibles, than CHIP coverage. Hardest hit, the researchers said, would be families with the lowest incomes and those with more than one child.
Costs for dental services were particularly high on the Arizona exchange, the study found, because the ACA requires insurance companies to include dental services for kids only if separate dental policies do not exist in the local market. For families in markets with stand-alone dental policies, the coverage represented a significant additional charge.
Whether the out-of-pocket costs for qualified insurance plans on the exchange will be more expensive than CHIP in 2019 is unknown. For that reason, advocates are urging states not to make hasty decisions about dropping CHIP coverage until exchange markets further develop and better enrollment and cost data is available.
Are all state CHIP programs the same?
No. The median income eligibility threshold for CHIP is 255 percent of poverty level which is $60,818 for a family of four, according to the Kaiser Family Foundation. But states vary widely, with New York offering coverage at the highest income level (405 percent of the federal poverty level or $96,592 for a family of four), followed by Iowa (380 percent), New Jersey (355 percent), the District of Columbia (324 percent), Connecticut and New Hampshire (323 percent) and Maryland (322 percent).
Nevada has the lowest income eligibility level at 175 percent of the poverty level ($41,738 for a family of four), followed by Idaho (190 percent), and Nevada, Utah, Virginia, West Virginia and Wyoming at 205 percent.
Nationally, 88 percent of eligible children were enrolled in either CHIP or Medicaid in 2012, compared to about 74 percent of adults who qualified for Medicaid, according to analysis from the Urban Institute. In 21 states, the participation rate was 90 percent or higher, while four states, Alaska, Montana, Nevada and Utah, signed up fewer than 80 percent of those eligible.
States also have leeway under federal rules to develop varying benefit packages and cost-sharing arrangements. A new study by the National Academy for State Health Policy found that, despite the flexibility, most state benefits were similar to those provided to children covered by Medicaid, and all states offered low or no premiums and other cost sharing.
Administration of the program also differs. When CHIP was launched, 21 states chose to create separate CHIP programs. The remaining states opted to cover children under an expanded Medicaid program. This year, two more states, California and New Hampshire, decided to merge their CHIP programs into Medicaid.