By Sean Miskell
As the expiration of funding for the Children’s Health Insurance Program (CHIP) approaches and policy makers consider its role in the new health coverage landscape, it’s a good time to take stock of CHIP coverage and whether or not comparable and affordable coverage is available to families through the new health insurance marketplaces, or exchanges. As my colleague Elisabeth Wright Burak has noted, CCF joined with 48 other groups to respond to the Medicaid and CHIP Payment and Access Commission’s (MACPAC) request for input on the future of kid’s coverage. We argued that not only does CHIP need to remain in place until marketplace coverage for children can be improved, but that CHIP’s robust benefit structure provides the very standard of judgment by which we should assess the viability of exchange options for children. Simply put, if kids are to be no worse off, marketplace coverage must rise to CHIP’s standards.
But what issues should policy makers consider if they seek to make marketplace coverage stronger and better aligned to the needs of children? In addition to the sign-on letter that CCF and others submitted to MACPAC, CCF also sent more detailed comments to MACPAC discussing key areas of focus for policy makers to improve marketplace coverage with recommendations about how best to address them.
Both CHIP and marketplace plans entail provisions to make coverage affordable for children and families, but they do so in different ways. CHIP is designed to serve children in families with limited incomes and therefore sets limits on families’ overall heath care costs. In contrast, marketplace coverage offers financial assistance via tax credits that may fail to adequately ameliorate the cost of obtaining coverage for many families. Marketplace plans often require higher contributions from families than is allowed in CHIP. Worse, tax subsidies for marketplace coverage can be offered in a way that is biased against affordability for some families. Those that have higher-cost offers of coverage from their employers are locked out of financial assistance in the exchanges, and the way in which subsidies are calculated is marred by the family glitch – affordability is pegged to the cost of coverage for an individual rather than a family. As a result, varying estimates suggest that between two and four million spouses and children have already been locked out of subsidies, a number that is sure to increase should CHIP funding expire. Further, studies have found marketplace coverage to be more costly for families than CHIP.
As a result, policy makers should consider the following steps to ensure marketplace coverage can adequately meet the needs of children.
- Ensure affordability of exchange coverage is comparable to CHIP for both healthy children as well as children with special health care needs.
- Fix the family glitch and make the ACA’s affordability test reflect the cost of obtaining coverage for an entire family, including spouses and children.
- Improve the affordability of dental plans in marketplace coverage. While all CHIP programs include dental benefits in CHIP’s overall five percent cap on family costs, not all exchange plans include dental benefits. As a result, some families must purchase separate dental plans that do not entail federal cost-sharing reductions or tax credits.
While CHIP and Medicaid’s Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) benefits are specifically designed to meet children’s health needs, such is not the case with plans available through the marketplace. The minimum set of benefits for marketplace plans is defined by each states’ package of essential health benefits (EHBs), but states have failed to assure that all pediatric services for children are covered by marketplace plans when they have selected the benchmark plans upon which their EHBs are based. EHB standards are particularly inadequate for children with chronic conditions or those that need habilitative services. In order to improve marketplace coverage for children, EHBs should be aligned with CHIP and EPSDT coverage consistently across all states.
Provider network adequacy
We currently lack sufficient data to fully assess how consumers are faring in the provider networks available through plans sold through the marketplace, but early evidence suggests that insurers are using narrow networks as a way to control costs. Though the ACA provides a national standard for network adequacy, it is qualitative and provides insurers with a great degree of flexibility. These narrow networks can have important implications for how children access health coverage and the costs their families incur, especially for children with special needs or complex and chronic conditions. Families may forego care if they are unable to find an out-of-network provider or feel they cannot afford the cost if they do.
In order to address these concerns, we need more information on the provider networks available to children and families with marketplace coverage. Policy makers must collect data on marketplace networks and consumers’ experience using them. Further, the ACA’s network adequacy standards must be strengthened and clarified. Finally, policy makers must ensure that children can access the care they need without incurring additional costs. This includes establishing an exemption process that allows families to access out-of-network care at in-network rates when doing so is the only option.
Transitioning between forms of coverage
As families face dynamic economic circumstances, the coverage options available to them may change as well. To manage these transitions, policymakers must pursue improvements in the eligibility and renewal process, better coordinate account transfers between the marketplaces and Medicaid/CHIP, and offer more robust consumer assistance.
Finally, we also urged MACPAC to consider the challenges faced by children with special healthcare needs, children in mixed immigration states families, and children in families where parents have limited English proficiency. These groups are vulnerable to receiving substandard care or becoming uninsured if federal CHIP funding were to end.
CHIP must remain an option as policymakers seek to address these issues regarding how children and families access coverage through marketplaces plans. Along with Medicaid, CHIP has proved to not only be effective in improving coverage for children but also providing robust coverage that is designed to meet their developmental needs. Policymakers should look to this standard as they work to improve plans available through the marketplace.