More than 8 million U.S. children depend on the Children’s Health Insurance Program for access to timely medical care. The program is authorized through 2019, but its federal funding expires in September and it’s unclear what Congress will do.
That uncertainty stresses all the systems and families that depend on CHIP, but it may be especially risky for the 2 million chronically ill children who get care through the program, which was originally designed for families falling in the gap between market affordability and Medicaid eligibility. In a study published this month in Health Affairs, researchers found that low-income children with chronic conditions would face higher out-of-pocket costs if forced to move from CHIP to the individual marketplace.
With the future of CHIP funding unclear, researchers simulated two scenarios: one in which CHIP funding is extended, and another in which CHIP children are enrolled in the Affordable Care Act insurance markets. After analyzing health plan data from CHIP and the marketplace, they found that CHIP enrollees may face thousands of dollars in additional costs on the individual market, with families of children with diabetes, epilepsy or mood disorders facing the highest additional costs.
Study co-author Alon Peltz, a physician who cares for children with special health care needs, noted that about one in every four kids in CHIP has a chronic health condition.
“We’re coming up on the 20th year of CHIP and there are concerns about how to maintain coverage for these children,” Peltz, also a postdoctoral fellow in the Robert Wood Johnson Foundation’s Clinical Scholars Program at Yale School of Medicine, told me. “We wanted to think more critically about different avenues policymakers could take as they think about the future of health insurance coverage.”
In conducting the study, which included more than 7,000 children with one or more chronic conditions, Peltz and colleagues assumed that ACA subsidies would still be available to help former CHIP families buy coverage on the marketplace. (Unfortunately, the future of those subsidies is also unclear.) They found that at every income level, children with chronic health problems would pay more for coverage in the marketplace than they would have in CHIP. For example, a family living at 100-150 percent of the federal poverty level (that’s about $30,000 for a family of three) would spend about $233 more in the marketplace annually, while a family at 251-400 percent of poverty (or between $51,000-$81,000 a year) would pay $1,078 more in the marketplace.
Researchers also found that marketplace costs were higher for all six of the chronic conditions studied: asthma, ADHD, developmental disorders, diabetes, epilepsy and mood disorders. Children with epilepsy experienced the biggest spending increase in shifting to the marketplace, with the difference ranging from about $400 to nearly $2,500 depending on household income. The study attributed a majority of the out-of-pocket differences to spending on prescription drugs and inpatient hospitalizations. For instance, among children with asthma or ADHD, higher prescription expenses accounted for much of difference in CHIP and marketplace spending. For kids with diabetes, epilepsy and mood disorders, higher spending was typically associated with hospitalization costs.
The study’s findings also assume that children shifted to the marketplace would continue to get all the services they need. However, researchers cautioned that “in reality, families could encounter networks that are inadequate to meet their children’s specialty care needs and (that could) lead to even higher out-of-pocket expenses.” In addition, about 2 million children now covered by CHIP don’t currently qualify for ACA subsidies due to a loophole known as the “family glitch,” which would certainly impact their ability to afford coverage outside of CHIP. (Right now, families can get ACA subsidies as long as they don’t have access to affordable employer-sponsored coverage. However, that affordability determination is based on coverage for the individual employee, not the employee and her or his family. Hence, the “family glitch.”)
The study offered three strategies for leveling affordability between CHIP and marketplace plans: enhancing cost-sharing reductions in the ACA marketplace; re-examining cost-sharing for the two big drivers — drugs and hospitalization — of CHIP-marketplace spending differences; and monitoring whether marketplace deductibles negatively impact a child’s ability to access timely care. (CHIP plans rarely include deductibles.) However, all those strategies are based on an assumption that the ACA isn’t repealed and any changes to the law are relatively small. With that in mind, the researchers concluded that keeping CHIP funded is the best option for kids who need reliable access to care.
“Given concerns about the viability of the marketplace, the legal battles regarding the cost-sharing reduction payments and the efforts to repeal the ACA, reauthorizing funding for CHIP is most likely the least disruptive strategy moving forward,” researchers wrote.
Peltz said that if federal CHIP funding did disappear, many states would likely continue the program in some form. But with only state funds — and no matching federal funds — CHIP families may see reductions in services or higher cost-sharing requirements. He also noted that the ACA increased federal CHIP reimbursement to states. If Congress eliminated that enhanced reimbursement that could negatively affect state CHIP plans as well.
Still, Peltz said he’s hopeful that policymakers can find a solution that ensures care for the 8 million children who depend on CHIP.
“With some uncertainty right now in the political landscape, the CHIP program seems to be the best option for making sure that children, particularly those with chronic conditions, can continue accessing affordable care,” he told me. “We have a strong history of providing services to this vulnerable group of children…and as both a researcher and clinician, I hope we’ll continue the tradition of caring for these children.”
For a copy of the CHIP study, visit Health Affairs.
Kim Krisberg is a freelance public health writer living in Austin, Texas, and has been writing about public health for 15 years. Follow me on Twitter — @kkrisberg.