Extending CHIP: Let’s Not Mess With Success or Toy With the Program’s Future

By Jennifer Sullivan and Liz Hagan

The Children’s Health Insurance Program (CHIP) has been a critical source of coverage for children since its creation in 1997. The program currently covers 8 million children who live in families with incomes too high to qualify for Medicaid, but who cannot afford private coverage. Due to a combination of effective outreach and education tactics and family-friendly eligibility and enrollment policies, CHIP boasts very high participation rates and has contributed to historically low uninsured rates among children.

When we think about CHIP, it’s hard to not think about the program’s many contributions to the broader enrollment community. So many of the eligibility and enrollment simplifications required or expanded by the Affordable Care Act — single, streamlined applications, elimination of asset tests, Express Lane Eligibility, and prepopulated renewal forms, just to name a few — were first tested and proven highly effective with CHIP and children’s Medicaid.

And while creating a simplified, seamless enrollment process is still a work in progress, we can thank lessons learned from CHIP for some of the early successes we’ve seen so far. Take, for example, the “fast-tracked” Medicaid enrollment strategy adapted from Express Lane Eligibility, that has helped 668,000 individuals from six states enroll in Medicaid based on their enrollment in the Supplemental Nutrition Assistance Program (SNAP). Or the streamlined process that allows everyone in a household to apply for coverage on the same application, following the path blazed by the joint Medicaid/CHIP application.

Amid all these successes, however, it’s also hard not to think about CHIP’s future in the coverage continuum. Unfortunately, without congressional action, federal funding for the program is only available through September 30, 2015. (This is true despite the fact that the program itself is authorized through 2019.) This has major implications for states, which rely on this federal funding for over 70 percent of the cost of the program. Even more importantly, it has major implications for the families who rely on the program. If federal funding for CHIP is not extended, millions of children will be at risk of losing access to affordable coverage.

There are three important reasons that the CHIP extension is of critical importance for the enrollment community:

  1. Coverage transitions are often disruptive. If CHIP funding were not extended, children currently enrolled would have to transition to a new source of coverage (likely through the marketplace). However, even with the best outreach and enrollment policies, we’re likely to see some children fall through the cracks. We’ve seen this before with children “churning” between Medicaid and CHIP. At a time when there is already significant lack of awareness about coverage options, this would only add more confusion.
  1. Children in CHIP have low cost-sharing and benefits geared specifically towards their needs. CHIP offers many important financial protections, including low (if any) premiums and strong limits on out-of-pocket costs. If children enrolled in CHIP shifted to marketplace coverage, they would likely be subject to higher premiums and cost-sharing. In addition, CHIP coverage is specifically designed with children’s health care needs in mind. It typically covers services important for children’s development like screenings, dental, and vision services. While plans offered through the marketplace offer quality, comprehensive coverage, they are not specifically designed for children, and many benefits children currently enjoy in CHIP may not be offered through marketplace coverage.
  1. Some current CHIP enrollees would not be eligible for financial help through the marketplace. If CHIP funding were not extended, an estimated 2 million children currently enrolled in CHIP would be affected by the “family glitch,” which excludes families from getting financial help through the marketplace if one person in the family has an offer of affordable job-based coverage (even if that coverage is not available or affordable for the rest of the family). Without CHIP, these 2 million children would be ineligible for financial help through the marketplace, leaving them without any affordable health coverage options.

To address these concerns and many others, House and Senate bills have been introduced to extend CHIP funding through 2019. Both bills include provisions that encourage wider adoption of enrollment best practices, like Express Lane Eligibility, 12-month continuous eligibility, and the elimination of waiting periods.

Recently, Enroll America joined 1,200 other organizations across the country writing to congressional leaders of both parties to express our support for extending CHIP funding through 2019. We all owe a lot to CHIP: Families can thank CHIP for the high-quality coverage, peace of mind, and financial security it provides, and the enrollment community can thank CHIP for the many lessons learned that have guided our work thus far. While we continue to work towards realizing the goal of a seamless enrollment process for all coverage options, we also recognize CHIP as an essential piece of the health coverage puzzle that is at a critical crossroads.

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