In House Health Bill, Kids Play ‘Lottery of Geography’
Friday, November 06, 2009 at 6:00 am
How effectively will the House health care bill cover children? Turns out, it depends on where they live.
The $894 billion health reform bill working its way toward a House vote this week would repeal the Children’s Health Insurance Program, shifting some low-income kids into Medicaid and others into private plans that would both cost more and guarantee fewer benefits. Which program the youngsters tumble into hinges, not on need, but on the state where they live – a design some advocates call “the lottery of geography.”
[Congress1]“Much of the House bill is good, but on CHIP they only did half a loaf,” said Bruce Lesley, president of First Focus, a children’s health advocacy group. “They protected kids in some of the states, but not in the others.”
Created in 1997, the state-federal CHIP partnership was designed to cover kids in families too wealthy to qualify for Medicaid but not wealthy enough to afford private insurance. States were granted broad discretion to fashion the program to fit their needs, with some carving out a separate CHIP program, some using CHIP funds to expand Medicaid eligibility, and still others opting for some combination of the two.
The House bill, which would eliminate CHIP in 2014, approaches those models very differently. While it expands Medicaid eligibility to 150 percent of poverty and shifts all kids living above that level to private plans contained on a proposed insurance marketplace, or exchange, the proposal also carves out an exception in states which augmented Medicaid in lieu of creating a separate CHIP program. In those cases, the youngsters would remain in Medicaid.
The distinction carries both coverage and cost implications. Under current law, all state Medicaid programs are required to offer a blanket system of preventative care known as the early periodic screening, diagnosis and treatment program, or EPSDT. The exchange plans, on the other hand, don’t have the same mandate. (Although states with stand-alone CHIP programs are not bound to cover EPSDT services, some of them do.)
And because states have vastly different income-eligibility levels for Medicaid and CHIP, the House bill offers no guarantee that the most vulnerable kids would receive the most robust benefits. In New Jersey, for example, Medicaid covers youngsters up to 200 percent of poverty, at which point CHIP takes over and covers kids up to 350 percent. Minnesota, by contrast, covers kids up to 275 percent of poverty under Medicaid but has no stand-alone CHIP plan.
The result? Children living at 275 percent of poverty in Minnesota would, under the House bill, still pay almost nothing for care under Medicaid — including EPSDT coverage — while families living at the same income level in New Jersey will be responsible for 22 percent of the cost of their exchange plans, without the assurance of EPSDT services.
The patchwork has led some state health departments to support the House proposal and others to oppose it.
“My members are split,” said Ann Kohler, director of the National Association of State Medicaid Directors.
Still, there are more New Jerseys out there than Minnesotas. Currently, about 5.3 million (or 72 percent) of the 7.4 million CHIP kids live in states with stand-alone CHIP programs, according to Georgetown University’s Center for Children and Families.
“They’re going to be paying a lot more out of their pockets and getting fewer benefits,” warned Alison Buist, director of child health at the Children’s Defense Fund.
Supporters of the shuffle from CHIP to private plans argue that it will increase enrollment by allowing entire families to gain coverage under the same plan. They also point out that CHIP must be reauthorized every few years, leaving the very existence of the program to the fancy of Congress. Still, the proposal to repeal CHIP has put Democrats in the uncomfortable spot of defending the elimination of a program they spent much of the last two years fighting to preserve.
Then there’s the cost issue. A recent report conducted by Watson Wyatt Worldwide, a financial consulting firm, found that most CHIP enrollees living at 175 percent of poverty pay nothing at all for their health services, while those living at 225 percent pay about 2 percent of costs. Shifted into private plans on the exchange, the researchers found, those same families would pay between 5 percent and 35 percent of health costs, respectively — a situation “greatly increasing their financial burden and leaving low-income children worse off as a result of health reform.”
Indeed, examining a similar CHIP repeal offered in the Senate, Congressional Budget Office Director Douglas Elmendorf recently noted that “some of those children would be eligible for subsidized coverage in the exchanges but would not be enrolled in an exchange plan (owing at least in part to the higher premiums and higher out-of-pocket costs that they would typically face in such a plan).”
Some House lawmakers recognize the potential problems. During the markup of health reform legislation in the Education and Labor Committee, for example, lawmakers passed an amendment — offered by Rep. Bobby Scott (D-Va.) — requiring that all exchange plans offer EPSDT services. That proposal, however, was stripped out in the final bill.
Another amendment, offered by Rep. Diana DeGette (D-Col.), would have prevented the shift from CHIP to private plans unless the White House provided certification that the private plans offered comparable benefits. That proposal passed the Energy and Commerce Committee, but was also removed in the final bill.
DeGette’s office said earlier this week that the certification language was removed “to reflect some budgetary constraints.”
Not that the end of CHIP is final. In the Senate, members of the Finance Committee last month passed an amendment to reauthorize CHIP through 2019. The sponsor of that amendment, Sen. Jay Rockefeller (D-W.Va.), is already vowing to fight for that provision all the way to the White House.
“We need to make sure children can keep their CHIP coverage and not be forced into untested private coverage,” Rockefeller said in a statement this week. “Health care reform should improve the coverage children have — not take their coverage away.”
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