Findings from a new actuarial value (AV) study released at the Medicaid and CHIP Payment and Access Commission (MACPAC) meeting in late October confirm again that compared to other sources of coverage CHIP is the most affordable option for children in low-income families. The latest 
research presented at the MACPAC session “Premiums and Cost Sharing in Separate CHIP Versus Subsidized Exchange Coverage” looked at the cost of coverage and standard benefits in the 36 states that operate separate CHIP programs. The research, conducted by the Actuarial Research Corporation (ARC), includes important break-outs of the data showing cost-sharing and premiums in every state at 4 different income levels (133-150% FPL, 150-200% FPL, 200-250% FPL and 250% FPL and above).
The findings show the same trend lines as those from the Wakely Consulting Group’s research in summer 2014. Children currently covered in separate CHIP plans would face significantly higher out-of-pocket costs (premiums and cost-sharing) if CHIP was no longer available. In fact, according to this latest research, children losing CHIP would face 7 times greater out-of-pocket costs.
Among the most notable comparisons:
- CHIP has a 98% AV, $31 average cost sharing, $118 average premium compared with QHP coverage which has an 82% AV, $266 average cost sharing, $806 average premium.
- The average cost of coverage in CHIP is $148 per year compared with $1,073 per year for QHP coverage.
This data does not include the cost of dental, vision, or non-standard benefits so a family’s total out-of-pocket cost is likely to be even higher. The data also reflects only the cost of coverage for one child so families with multiple children would pay even more.
While these results are certainly not surprising they continue to paint a revealing picture of how much kids would lose if CHIP funding were to expire in 2017.
Since before the Affordable Care Act (ACA) was signed into law, children’s advocates have been fighting to protect the existing coverage children get through CHIP and Medicaid because these programs have done an excellent job ensuring that families have affordable, high quality, pediatric-appropriate coverage for their children. The findings from this MACPAC-supported research confirm the notable cost differential between CHIP and Marketplace coverage. On the qualitative side, last summer, the Kaiser Family Foundation held a series of focus groups with families who have a child enrolled in CHIP. The Kaiser focus group findings showed that not only is CHIP more affordable than other sources of coverage, families are also highly satisfied with CHIP and value the comprehensive, high-quality care it provides for their children.
While we celebrate the remarkable coverage gains that have resulted from the ACA, as advocates for children we must continue to remind policymakers and health reform stakeholders alike that for now CHIP offers much more robust and comprehensive coverage for kids when compared with Marketplace coverage because CHIP was designed with the health and developmental needs of children in mind.
We’ve been making the case to protect children’s coverage since 2009 when the House of Representatives actually voted to repeal CHIP and roll children into the ACA Marketplaces. It was an early Watson Wyatt actuarial value study commissioned by First Focus that demonstrated for Senators how CHIP stacked up against Marketplace coverage for kids. This data convinced Senators to successfully restore CHIP funding in the final ACA legislation. We are grateful that since that time, Members of Congress on both sides of the aisle have voted to continue CHIP funding so that children’s coverage would not move backwards.
The bottom line is that CHIP works. It is good for kids, good for families, good for states, and good for taxpayers. It is a model program that has reduced the numbers of uninsured children to record lows. CHIP has a nearly two decade history of bipartisan support from lawmakers who recognize that providing health coverage for our children is a critical investment for America and its future.
While ACA coverage is doing a great job enrolling millions of previously uninsured Americans into coverage, the data continues to show that it will take a lot more time before the Marketplaces are able to provide coverage for kids that is comparable to the affordability, benefits, quality, and network adequacy that kids get in CHIP. First Focus along with many other children’s advocates have shared with policymakers a long list of ideas on how to make Marketplace coverage work better for children but as ACA coverage continues to evolve it would be a mistake to tamper with the programs that have been so successful in covering children. Children must continue to have access to stable coverage through proven programs like CHIP until it is clear that Marketplace coverage offers comparable affordability and benefits. We are committed to continuing this work to protect children’s coverage.
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