Why CHIP Beats the Marketplace When it Comes to Kids

Over the past few decades, policymakers have made a commitment to insuring children, as evidenced by Medicaid coverage expansions in the 1980s, the creation of CHIP in 1997, and most recently, the Affordable Care Act (ACA). But not all of these coverage sources are created equal.

Medicaid, the MVP for children’s coverage, offers children an individual entitlement to a robust pediatric benefit package without cost-sharing. CHIP looks more like private market coverage but still offers tailored pediatric benefits at low cost. And coverage in the marketplaces created by the ACA offers is narrower still – with fewer pediatric-specific benefits and higher out-of-pocket costs. This coverage continuum is logical – the most comprehensive coverage is available to the lowest income children who need it the most, and the coverage narrows as children move up the income scale.

But having these multiple sources of coverage has led some policymakers to ask – do we still need CHIP now that we have the ACA marketplaces? The answer is most assuredly YES.

CHIP has been an important catalyst in the nation’s success in covering children and CHIP is better suited to meet the needs of children in low- to middle-income families. To understand more about how Marketplace coverage is not an adequate substitute for CHIP, check out our latest brief.

It’s clear that CHIP funding is needed for the foreseeable future so that no children lose benefits that are essential to their health and development. But after Congress takes swift action to extend CHIP funding, Congress could consider making improvements to Marketplace coverage so that it can better serve the 1.1 million children enrolled. Children and parents would be very glad to see greater stability for all children, regardless of their coverage source!