By Jocelyn Guyer

The Senate Finance Committee began its markup yesterday and moved into high gear today, taking votes for the first time on amendments. Senator Baucus released his mark last Wednesday, September 15th and was immediately deluged with over 500 amendments. Yesterday, he released a revised version that incorporates some of the amendments.
From a child and family health perspective, here is where things have landed in the mark to date, and suggestions on what to look for as debate continues throughout the week.

1.    Affordability – Despite some improvements in the latest version of the mark, concerns remain that coverage will be out of reach for many families. Although everyone will be required to purchase insurance, families will not have access to truly affordable coverage options due to shortcomings in the proposed subsidy structure. This chart shows how much families could be expected to pay to buy coverage under the Finance Committee mark. Note that this represents spending on premiums only and does not take into account other cost-sharing families would face after securing coverage.

In comparison, a family of 3 at 200% of the FPL (in the median state) is required to contribute less than 1% of family income to buy Medicaid/CHIP coverage for their kids. It makes sense that families would need to pay more for coverage that includes the parents — typically family-based coverage costs 2 to 3 times the cost of single coverage.  But, in the case of the Finance Committee mark, many families would have to spend 10 times as much just to secure coverage.

We may see amendments from any number of Senators aimed at making coverage more affordable, but the key challenge will be finding a way to pay for the improvements.

2.    CHIP – The mark still envisions moving some 14.1 million kids from CHIP to Exchange plans in 2013 and discontinuing the program, as it now exists. Instead, CHIP would be converted into a program that “supplements” or “wraps” the coverage provided by Exchange plans.  As a result of alarm bells raised by children’s advocates and others, the mark now calls for states to be required to use CHIP to supplement the coverage of children with family income at least up to 250% of the FPL.  The wrap will need to raise the coverage to EPSDT levels and provide cost-sharing consistent with current CHIP rules. An additional provision added just yesterday at the behest of Senators Bingaman, Stabenow, and Mendendez sets up a process for assuring that children can only be moved from CHIP into Exchange plans if they will secure coverage that is comparable and that adequate procedures exist to ensure that the wrap will work. (A similar amendment was adopted in the House.)  Even with these improvements, concerns persist about whether low-income children will have access to comparably good, seamless coverage in practice – and not just on paper — under the new “wrap” structure.

To address these concerns and further improve coverage for kids, Senator Rockefeller may offer an amendment that would continue the CHIP program through 2019, expand coverage to 300% of the federal poverty level, require 12-months continuous coverage for children in Medicaid and CHIP, invest in outreach, and promote use of simplified and family-friendly enrollment procedures in Medicaid and CHIP.

3.    Medicaid – The mark expands Medicaid to people under age 65 with gross income up to 133% of the FPL. In a move designed to save money, expanded Medicaid coverage would not start until 2014, even though subsidies would become available earlier to more moderate-income families.

The mark also requires states to provide these parents and childless adults with a reduced benefit package even though it is well known that they are particularly likely to have chronic conditions, mental health problems, and disabilities. Senators Rockefeller and Bingaman may have amendments aimed at improving the coverage provided to these low-income adults.

The federal government is going to pay for the bulk of the cost of the new expansions, providing more support initially to states that have further to go in covering people to 133% of the FPL and less to states that historically have done the best job in covering parents and childless adults. In an interesting twist, the revised mark includes 100% federal funding from 2014 to 2019 for the Senate majority leader’s home state of Nevada, as well as Rhode Island and Michigan, which have high unemployment rates.

4.    Coverage for legal immigrants – After furious debate, the mark would require legal immigrants to secure coverage and make them eligible for subsidies without facing a 5-year waiting period.  It, however, will not require that states provide Medicaid and CHIP to legal immigrants, which means that very low-income legal immigrants would only have the option to buy coverage through the Exchange with a premium subsidy aimed at more moderate-income people (and considered inadequate even for them).  Senator Menendez is expected to tackle this issue in an amendment, as well as income counting rules that could harm children in mixed-status families. Coming from the other direction, Senators Kyl, Grassley, and/or Ensign are expected to offer amendments that would impose a 5-year waiting period on legal immigrants in the subsidy program or create other barriers to coverage for legal immigrants.

5.    Streamlining enrollment for low-income people – In order to keep the cost of the bill down, the mark dropped measures to simplify enrollment in Medicaid and CHIP, such as use of 12-months continuous eligibility and electronic verification of income.  An amendment by Senator Stabenow was included in the revised mark requiring that HHS issue enrollment standards through guidance to states (covering such issues as documentation of income, continuous eligibility, and automatic renewal), but it is unclear how much “teeth” it will truly have. The mark also requires states to establish “seamless” enrollment between Medicaid and Exchanges, but, again, critical details are missing as to what this would mean. Senator Bingaman may offer or discuss an amendment that would include some of the simplification measures that currently are absent from the mark.

We will continue to report on changes to the mark as action continues this week.