Since 1997, the State Children’s Health Insurance Program (CHIP) has provided health care coverage for more than 8 million children in low-income families that don’t have health insurance, but make too much money to qualify for Medicaid. This year, Congress will decide whether to continue funding CHIP. Read on to learn about some of the issues involved in this decision.
How Does CHIP Funding Work?
Some state money funds CHIP programs, but CHIP mostly relies on federal funds. States can operate CHIP as a separate program, as part of their Medicaid programs, or use a combination of the two approaches.
If federal CHIP funding is not extended, CHIP-eligible children in Medicaid programs will keep Medicaid, while states with children enrolled in non-Medicaid CHIP plans will determine if those children are eligible for Medicaid. Children who do not qualify for Medicaid will be enrolled in a qualified health plan under the Patient Protection and Affordable Care Act. Some children may obtain health insurance through a family member’s employer-sponsored health benefits.
What’s the Difference between CHIP and a Qualified Health Plan?
To find out, we compared 5 states’ CHIP plans with models of expected coverage in a qualified health plan, and reviewed national survey data on access to care. We found potential coverage, cost, and access differences.
- Coverage: Since 1997, CHIP has cut the percentage of uninsured children nationwide by half. The benefits covered by CHIP and the qualified plans we reviewed were similar. For example, like CHIP plans, the qualified plans typically did not impose limits on emergency care, preventive care, ambulatory services, or prescription drugs. However, the qualified plans did impose limits on outpatient therapies, as well as dental, vision, and hearing services.
- Cost: Families could face higher costs if they have children in CHIP who are shifted to qualified health plans. Among the plans we examined, CHIP plans almost always charged less for cost-sharing than qualified health plans, and typically didn’t require the payment of deductibles. Additionally, costs could be considerably higher, as some families may not qualify for available federal subsidies.
- Access: Whether their children were covered by CHIP, Medicaid, or private insurance, those surveyed were generally similarly positive about being able to access care. However, children in private plans may have better access to specialty care than those in Medicaid. In our 2010 survey, physicians reported greater difficulty in referring children to specialty care if they had Medicaid or CHIP plans as opposed to private insurance.
Other factors may warrant additional study. For example, there may be financial and access considerations for family members who could be eligible for multiple types of health care coverage. In addition, it is unclear how the program and administrative costs of different CHIP or Medicaid options affect federal and state spending.
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