More than 8 million children could be at risk of losing health coverage if federal funding for the Children’s Health Insurance Program does not continue.
Children with chronic conditions are most vulnerable, experts say, and families could face substantial cost increases if they need to shift their insurance to a Marketplace plan.
CHIP is a main source of government-sponsored health insurance for children in low-income families. A quarter of those children—2 million—have chronic conditions, such as diabetes or asthma, that require more care at greater cost.
To find out what the impact on these children would be if Congress fails to extend CHIP later this year, researchers compared CHIP coverage with Marketplace plans nationwide. The Marketplace, part of the Affordable Care Act, is an online exchange that allows families to shop for health insurance plans, often with support of government subsidies.
Using data from both plans, as well as utilization data on children with chronic conditions, they calculated out-of-pocket costs for children enrolled in either plan in every state and then analyzed costs for children at four different income levels.
While both plans are effective in providing coverage for children with chronic conditions, CHIP is the preferable alternative, says Alon Peltz of Yale University and first author of the study in Health Affairs.
“CHIP plans provide better and more generous coverage. The amount that families may need to pay if CHIP goes away and children need to enroll in a Marketplace plan could be quite significant.”
If low-income families shift from CHIP to Marketplace plans, their annual out-of-pocket expenses could rise significantly, as much as $233 to $2,472, depending on income level and the child’s health care needs. Families with children who have epilepsy, diabetes, or a mood disorder could face the steepest costs increases, the researchers say.
“As policymakers consider alternatives for providing coverage for this vulnerable population of children, we encourage them to be particularly mindful of the cost burden families might encounter,” Peltz notes.
Established in 1997, CHIP was reauthorized through 2019—but funding expires in September 2017. Loss of federal funding could force states to cut benefits or even discontinue programs altogether.
If the plan isn’t funded, and families switch to Marketplace plans, there are ways to make them more affordable, the researchers say, including enhancements to current cost-sharing protections, a review of co-payments for prescription drugs and hospitalizations that drive up out-of-pocket costs, and close monitoring of deductibles.
“We found that minor modifications in the way marketplace subsidies are structured could put them in line with the CHIP program,” Peltz says. “However, given the uncertain future of the Affordable Care Act, extending funding for CHIP is likely the best strategy for providing stability and security for those families who need it most.”
The Robert Wood Johnson Foundation funded the work.
Source: Yale University