Thursday, July 31, 2014

The clock is ticking on funding health insurance for kids

BSIP/Universal Images Group

Unless Congress appropriates new funds at some point in the next year, coverage for millions of children will lapse in September 2015.

The Children's Health Insurance Program (CHIP) covered 5.7 million children in 2009. It was enacted by President Clinton in 1997 and was temporarily reauthorized under President Obama during his first year in office.

But funding for the program expires at the end of September 2015.

CHIP operates under the Medicaid umbrella and covers children whose family incomes are too high to qualify them for traditional Medicaid. CHIP — unlike the traditional program — is funded through block grants; states receive a fixed amount of money from the federal government, which they match with state dollars.

The situation for children isn't so dire now as it was in 2009. Now that the state health insurance exchanges exist, many families with children enrolled in CHIP would have access to affordable forms of coverage on the exchange. Not all of them, though.

Due to a mistake in the way the Affordable Care Act was written, an estimated two million children will be without affordable coverage if Congress fails to continue CHIP's funding. The mistake, known in health policy circles as the "family glitch," prohibits families with incomes below 400 percent of the federal poverty line from receiving subsidies if one of the parents has health insurance through their employer — even when that coverage won't cover dependent spouses or children.

Senator Rockefeller of West Virginia has proposed legislation to extend CHIP funding through 2019. That offers time to assess Obamacare's impact and possibly repair the cracks in coverage for children, including fixing the family glitch.

Other problems with exchange coverage have been identified, though. There are gaps between the dental benefits that CHIP offers and the dental benefits provided through most exchange plans. Moreover, out-of-pocket costs would be higher for families with plans purchased through the exchange, which could discourage people from signing up altogether. It's one thing for an adult to take on the risk of being uninsured; CHIP provides a safety net for children who can't take any action to insure themselves.

The stakes for this are higher than the affordability of health insurance. A recent study used the initial CHIP expansion to determine whether the program had an effect on education. The authors found long-run positive effects on high school and college attainment.

Continued funding for CHIP requires an act of Congress, no small feat in an era of growing polarization. But this time, it is — quite literally — for the children.

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