By Joe Touschner

Since it was adopted more than 15 years ago, CHIP has brought quality, affordable coverage to millions of children whose families earn too much to enroll in Medicaid.  This year, with marketplaces now up and running, a new coverage option is available for many families in the same income range—qualified health plans with premium tax credits and cost-sharing reductions.  So how does the coverage provided under CHIP compare to the new offerings?  The Wakely Consulting Group, First Focus, and the Robert Wood Johnson Foundation have collaborated to provide a great new resource that helps answer that question.

Wakely was retained by the Robert Wood Johnson Foundation, in consultation with First Focus, to make a detailed comparison of CHIP with the essential health benefits (EHBs) required to be provided through qualified health plans (QHPs) available to families with moderate incomes in 35 states.  It contains a wealth of information, particularly on how cost sharing amounts compare and on benefits important for children.  The new report builds directly on the work we and the National Academy for State Health Policy published in May on CHIP benefits and cost sharing.  It also offers another preview—a very detailed one—of the efforts of the Secretary of HHS to certify which QHPs offer benefits and cost sharing comparable to CHIP.

So what did the comparison find?  You can find out for yourself in First Focus’s summary of the full 177 page report.  It revealed that CHIP’s cost sharing amounts are much less than those in QHPs.  Among the states included, CHIP’s average annual cost sharing amounts were $66 for a child with family income at 160% of FPL and $97 for families at 210%.  This contrasted with the QHP averages of $446 and $926 for families at the same two income levels.  On benefits, the comparison to states’ EHBs showed that CHIP provides robust coverage of child-specific services.  While state EHBs sometimes included these services, there were many more gaps among the EHBs.  For instance, almost half of states do not include coverage of hearing aids in their EHBs, while nearly all CHIP programs cover them.

It’s extremely valuable to have an in-depth, side-by-side comparison of benefits and cost sharing for so many states.  But it’s really no surprise that when focusing on out-of-pocket expenses and child-specific benefits, CHIP appears to offer more comprehensive coverage than qualified health plans.  CHIP was developed specifically to serve kids, so its benefits are tailored to their needs.  Likewise, states can set CHIP cost sharing amounts taking into account the fact that enrolled families will have many other obligations for their limited incomes, including parents’ health care expenses.  The reduced cost sharing QHPs available in the CHIP income range, on the other hand, must set their out-of-pocket amounts to meet an actuarial value specified in law.  The AV is calculated across the age range, so plans have little incentive to target cost sharing reductions to kids’ services.

Knowing how CHIP coverage compares to QHPs will be a key consideration as policymakers deliberate how long to extend CHIP’s funding beyond September 2015, so this report will contribute much needed information to the debate.