Medicaid and the Children’s Health Insurance Program (CHIP) are the most comprehensive and affordable forms of coverage available for the children they serve. These programs were designed with children specifically in mind, with the intent of making high-quality pediatric coverage available to families that would otherwise struggle to pay for it. In particular, we know that without CHIP, 1.1 million children who are currently enrolled in the program would become uninsured. Disrupting Medicaid and CHIP to any degree would move us backward on coverage for kids.

Two weeks ago, on February 12, Senate Finance Committee Ranking Member Wyden (D-OR) and Senators Brown (D-OH), Casey (D-PA), and Stabenow (D-MI) introduced the Protecting and Retaining Our Children’s Health Insurance Program (PRO-CHIP) Act in the Senate. The same day, Representative Green (D-TX), the ranking member of the Health Subcommittee of the House Energy and Commerce (E&C) Committee, also introduced a CHIP funding bill in the House. These bills both take steps to sustain coverage for millions of children, as well as continue important initiatives to improve pediatric quality of care.

Yesterday, Senate Finance Committee Chairman Hatch (R-UT), House E&C Chairman Upton (R-MI), and Representative Pitts (R-PA) released a discussion draft that outlines their vision for the future of CHIP. We are pleased that they are engaging on this issue and are committed to extending coverage for low-income children. Notably, we are glad that this draft includes an extension of the current formula for determining how much federal CHIP funding states receive—which governors generally reported to be successful—as well as the qualifying state option, which fairly compensates states that proactively increased children’s Medicaid eligibility levels. That said, we have serious concerns about some aspects of this proposal that would make children worse off by reducing access to an effective source of coverage:

  • Longer waiting periods: The authors assert that states need the option of imposing waiting periods up to a year to prevent crowd-out, enrolling children who could be covered through employer-sponsored coverage in public insurance. First of all, we know that 33 states have eliminated waiting periods, suggesting that their usefulness is limited. However, in states that choose to use such flexibility, this proposal would have the practical effect of forcing CHIP-eligible children to endure up to a year without insurance. While this time in limbo would be hard for any child, we are deeply concerned about the implications for children and youth with special health care needs. Moreover, this policy is in direct opposition to regulations issued in 2013 limiting waiting periods to a maximum of 90 days, as well as the spirit of both CHIP and the Affordable Care Act (ACA).
  • Reducing matching funds for states: This draft reduces federal financial participation in states’ coverage of children over 250 percent of the federal poverty level (FPL) and ends federal support for CHIP coverage of children over 300 percent FPL. Pulling back federal matching for CHIP coverage at a time when many states are facing difficult budget situations would likely mean that states stop offering coverage at these levels. For these children, reduced eligibility could mean they become uninsured, particularly if they are subject to the family glitch, and the accompanying financial risk could prevent some families from exploring economic opportunities such as entrepreneurship.
  • State flexibility on Medicaid and CHIP eligibility: This draft includes the suggestion that states not be held to the Maintenance of Effort (MOE) requirement of the ACA, which prevents states from rolling back Medicaid and CHIP eligibility for children until 2019. As we have seen from recent experiences in Arizona, when states are allowed to roll back coverage, the detrimental effects for children and families are significant. Moreover, the authors of this draft assert that states should be able to move stairstep kids  from Medicaid back to CHIP, even though we know that in states where Medicaid and CHIP are not identical, Medicaid is the more comprehensive option as it includes Early Periodic Screening, Diagnostic, and Treatment services, the gold standard of children’s coverage.

So where do we go from here? Because this is a discussion draft, Chairmen Hatch and Upton will be accepting comments on the content of this proposal. We are hopeful that subsequent drafts and the ensuing negotiations will do more to protect children’s coverage as well as recommend refunding pediatric quality improvement programs, which have been integral to our efforts to make children’s health care more effective, efficient and patient-centered. We look forward to a conversation about the best ways to move forward. We encourage our partners to comment to the Chairmen about this proposal and continue advocating for high quality, affordable coverage that is accessible for all children.