Reports

Children in Health Reform: Comparing CHIP to the Exchange Plans

Health

Screen Shot 2015-08-04 at 4.58.20 PMThis white paper analyzes the differences between the Children’s Health Insurance Program (CHIP) and the “health insurance exchanges” proposed in health reform legislation.

The report finds that CHIP is far superior to exchange plans in terms of benefits provided, affordability, adequacy of pediatric provider networks, guarantees to coverage, pediatric quality of care, coordination with other child care services, and the ability to prevent unintended consequences.

The report cites the following areas where maintaining CHIP health coverage is better than exchange plans:

  • Coverage for children from 2009 through 2013: If health reform were to repeal CHIP in 2013, states would not invest in improving coverage for children when those very efforts will be dismantled just a few years later. Thus, the increased coverage of 4 million children that is expected from passing CHIP earlier this year would largely be lost.
  • Covered benefits: Children in most state CHIP plans receive coverage for all approved vaccinations, dental care, and well-baby and well-child visits. This level of benefits stand in contrast to private plans, like those in the exchanges, which often impose limits that are particularly harmful to children with special health care needs.
  • Out of pocket costs: An actuarial study by Watson Wyatt Worldwide finds that children moved from CHIP to exchange plans would dramatically increase out-of-pocket costs for children. For example, out-of-pocket costs for a child living in a family earning 225 percent of the federal poverty level would increase by 1,100 percent, if the Senate were to join the House in repealing CHIP.
  • Premiums: Because CHIP keeps premiums and other out-of-pocket costs for children at very low levels, the cost of health insurance exchange plans will be many times higher, even for just covering children. Further, an increase in premiums will lead to a number of children currently enrolled in CHIP to lose coverage, according to the Congressional Budget Office.
  • Access to pediatric providers: CHIP plans specifically focus on the unique health care needs of children, which is not the case in proposed exchanges. And the recent CHIP reauthorization included improvements to pediatric-specific quality measures that may get lost in the conversion of children from CHIP to exchange plans.
  • Guarantee to care: In exchange plans, some children currently eligible for CHIP may be barred from receiving subsidies for coverage due to the costs of employer-sponsored plans. Moreover, the families that are eligible for subsidies and coverage through exchange plans may find coverage so unaffordable that they are left without insurance entirely.

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