Washington – A report released today by Wakely Consulting Group finds that Affordable Care Act (ACA) health insurance exchange “marketplaces” have fewer child-specific benefits and dramatically higher out-of-pocket costs than Children’s Health Insurance Program (CHIP) coverage. Comparison of Benefits and Cost Sharing in Children’s Health Insurance Programs to Qualified Health Plans examines the consequences if Congress fails to extend CHIP funding before it expires next year.
“CHIP is a bipartisan health plan that works for children, and affordability is a big part of that success story,” said First Focus president Bruce Lesley. “But if Congress fails to extend CHIP funding, parents’ out-of-pocket costs could increase by 900 percent.”
The comparison finds that a family of four with an annual income of $50,085 (210 percent of the federal poverty level for that family size, and below the U.S. Census Bureau’s reported median household income of $51,371) has average annual out-of-pocket costs of $97 through CHIP. That same family would face out-of-pocket costs of $926 under average marketplace plans. On average, the analysis finds that CHIP plans cover 82 percent of child-specific health services, while marketplace plans cover just 52 percent.
For families with children who have conditions like asthma or other special health care needs, out-of-pocket costs could be even higher. While CHIP plans cap out-of-pocket costs for special-needs children at no more than $2,250, the analysis finds that annual out-of-pocket costs for those children could rise as high as $5,200 under marketplace plans.
The analysis also compared child-specific services covered by CHIP plans against coverage for the same services in marketplace plans. These services include routine care like eyeglasses and hearing exams, as well as specialty care like speech or physical therapy, or Applied Behavior Analysis therapy for children with autism.
For specialty care, there can be significant differences in coverage and limits. Hearing exams for children are covered by 100 percent of CHIP plans, but just 37 percent of marketplace plans. And while all CHIP plans and marketplace plans cover speech therapy, only 42 percent of CHIP plans impose limitations on children’s access to speech therapy, while 80 percent of marketplace plans restrict access.
“When it comes to affordability and coverage for the care kids need, CHIP is better for children,” said Lesley.
The analysis compared CHIP and marketplace plans in 35 states that either operate CHIP plans that are separate from their Medicaid programs, or operate their CHIP and Medicaid plans in combination to cover uninsured children. States that use CHIP funding to operate their Medicaid programs are not included in the comparison.
The report includes state-specific analyses for each of the 35 states included in the survey, comparing out-of-pocket costs and coverage for child-specific benefits under the state’s CHIP plans to comparable costs and coverage under the state’s marketplace plans.
CHIP was created by a Republican-controlled Congress and a Democratic president in 1997. In partnership with Medicaid, CHIP has cut the uninsured rate among children in half, and the share of children who are uninsured today is lower than before the recession began in 2007. CHIP delivers care through partnerships with private health insurance companies, and the initiative offers states considerable flexibility in determining eligibility, costs of care, and covered services.
First Focus coordinated a letter in February urging Congress to protect CHIP funding, which was signed by more than 400 national, state, and local organizations, including at least one organization in every state. Because states must make budget decisions well in advance of the October 1, 2015, expiration of federal CHIP funding, the letter urges action this year to extend CHIP funding. With just a few legislative session days remaining before Congress adjourns, neither the House of Representatives nor the Senate has scheduled a floor vote on CHIP funding legislation.
“Congress must extend CHIP funding this year, to protect children’s health and families’ budgets,” said Lesley.