Preserving health coverage for kids will require more than saving CHIP

In the coming weeks, Congress will determine the fate of the Children’s Health Insurance Program (CHIP), which was initially created in 1997 to bridge gaps in insurance for low-income children ineligible for Medicaid. Over the course of a given year, CHIP helps provide coverage for about eight million children, and is a major reason why the proportion of uninsured children is at an all-time low.  

While preserving CHIP is an essential priority, there are several related Affordable Care Act (ACA) provisions in need of federal attention, including uneven state pediatric benefit standards, gaps in subsidies for purchasing marketplace plans and the magnitude of deductibles and other out of pocket expenses for children’s health care for low-income families in marketplace plans. 

{mosads}Beyond oral health and vision care, the ACA’s provisions do not directly define the pediatric benefits that qualified health plans must offer in the law’s emerging marketplaces. US Health and Human Services (HHS) Secretary Sylvia Burwell has the power to create national standards for these benefits, but currently a patchwork, state-by-state approach is in effect. In practice, this means that parents of children with disabilities may have differing levels of access to much-needed care for their children through the marketplaces, depending on which state they live in. HHS has the power to address these issues by prohibiting states from imposing treatment limits, or by requiring states to consider medical necessity when defining their benefits. We urge the Secretary to explore these and other options for defining national standards for pediatric benefits. 

In addition, under the terms of the ACA, employees are allowed to purchase subsidized, marketplace-based exchange plans only if the cost of participating in their employer’s plan exceeds 9.5 percent of their income. However, this provision only applies to the cost of insuring themselves and not their families—a gap known as the “family glitch.” Potential solutions include allowing families to purchase subsidized, marketplace-based plans if they cannot afford employer-based coverage for entire families, or subsidizing families to help purchase plans offered by their employers. 

Finally, several recent studies suggest that marketplace-based insurance plans are more expensive than CHIP-based coverage for most low-income families. Under CHIP, deductibles are rarely if ever used, the family responsibility for cost sharing is only 5 percent of income, and plans offer an actuarial value, or the proportion of covered claims paid by the insurer, that is well above 90 percent. In marketplace-based plans, only the lowest-income families qualify for cost-sharing assistance at levels that are generally comparable to those provided under CHIP. The Secretary could use her authority to improve cost-sharing assistance for pediatric care. 

We authored two articles in the December issue of Health Affairsthat together examined the private insurance market in the context of the ACA specifically as it relates to children and outlined the primary issues that require the Administration’s attention. Defining national pediatric benefit standards, addressing the family glitch and considering enhanced cost-sharing options for low-income families are all within the Secretary’s authority. If the administration does not address these issues, they should be front and center for Congress, which has a long history of successful bipartisan action on children’s health.  

Ultimately, children and their families need access to affordable, comprehensive health care coverage, which will require both extending CHIP and taking the steps needed to improve the ACA’s marketplaces. 

Noonan is co-director, PolicyLab at The Children’s Hospital of Philadelphia; Grace is pediatric fellow, Children’s National Health System; Kenney is co-director and senior fellow, Health Policy Center, Urban Institute; and Rosenbaum is health law and policy professor, George Washington University.