WASHINGTON, DC – This week, from his blog, Congressional Budget Office (CBO) Director Douglas Elmendorf noted definitively that the Children’s Health Insurance Program (CHIP) is more effective in reducing the number of uninsured children than the health insurance exchanges proposed in pending health reform legislation.

Elmendorf cites an amendment successfully offered by Senator Jay Rockefeller (D-WV), which will continue CHIP as a stand-alone insurance program. The original proposal by the Senate Finance Committee eliminated the CHIP program in favor of health insurance exchanges, and would move approximately 14 million children and pregnant women out of CHIP and into exchanges in 2013. Elmendorf explains that maintaining CHIP is more effective to enroll children because of its continuity of coverage and low out-of-pocket costs.

“CBO expects that offering continuity of coverage for several million children in CHIP would keep some children insured who would not have been covered under the Chairman’s mark; under the mark as it was originally offered, which would have eliminated CHIP, CBO anticipated that some of those children would be eligible for subsidized coverage in the exchanges but would not be enrolled in an exchange plan (owing at least in part to the higher premiums and higher out-of-pocket costs that they would typically face in such a plan),” Elmendorf states.

“All children need comprehensive benefits and child-focused coverage. The Children’s Health Insurance Program provides the best, most affordable care to address these needs. And CHIP keeps kids enrolled,” said Bruce Lesley, President of First Focus, a bipartisan children’s advocacy organization. “Its affordability enables more children to be insured, and CHIP provides comprehensive benefits to children that specifically address their unique health care needs. By preserving CHIP, Congress is fixing what is broken and building on what works. We should be expanding this program toward universal coverage, not phasing it out, as the chairman’s mark did.”

An actuarial study released by First Focus recently revealed that the CHIP is significantly better for low-income families than any health reform proposal pending in Congress. The study, conducted by respected consulting firm Watson Wyatt Worldwide, finds that children currently enrolled in CHIP will face higher costs if they are moved into exchange plans.

With respect to the application of an individual mandate through health reform, the column by Elmendorf also indicated that an amendment to eliminate a mandate for children’s coverage, among other modifications by the Finance Committee, would reduce the total number of people who would have health insurance under the Finance Committee proposal by roughly 1 to 2 million.

Lesley added, “[A]s this legislation moves to the floor, the Senate should take additional steps to strengthen CHIP coverage, to ensure it is not underfunded between 2013 and 2019. In addition, the Congress must not leave children out of the individual mandate. Indeed, strengthening CHIP and mandating coverage for kids will reduce the number of uninsured children, a top goal of the American public for health reform.”

The post can be found at http://cboblog.cbo.gov/?p=397.