While maintenance of effort (MOE) provisions in the Families First Coronavirus Response Act and long-standing MOE requirements for children prevent states from implementing any new eligibility or enrollment barriers, states should also be taking steps to remove existing barriers to coverage, including CHIP waiting periods. Before the Affordable Care Act’s (ACA) coverage expansions were implemented in January 2014, 38 states required some CHIP-eligible children to be uninsured for as long as one year before they could enroll. Since then, 25 states have dropped their waiting periods and two states had to reduce their waiting periods to no more than 90 days to comply with new requirements under the ACA.
Now is the time for the remaining 13 states to follow suit. These states include Arizona, Arkansas, Florida, Illinois, Indiana, Iowa, Louisiana, Maine, New Jersey, South Dakota, Texas, Utah and Wyoming.
Gaps in coverage, resulting from waiting periods, can be harmful to children’s development. Any gap in coverage created by a waiting period or the administrative process to transfer children between different coverage options can be harmful to child health and development, particularly for the very young. Research is clear that uninsured children have less access to medical care, especially primary care, and as a result, they may receive inappropriate and more costly care in emergency rooms or forego needed care altogether.
Administering waiting periods is costly, inefficient, and wastes state administrative capacity that should be dedicated to processing the influx of new applications precipitated by the COVID-19 economic downturn. Determining eligibility is complicated by waiting periods and requires an added level of coordination between the Marketplace and CHIP. First of all, states must assess whether children applying for CHIP meet one of a number of good cause exceptions. Secondly, states are expected to track children subject to the waiting period and proactively take steps to enroll them when the waiting period has been met, although it is unclear that all states are complying with this requirement. During the waiting period, states are expected to transfer these applications to the Marketplace to determine if they qualify for financial assistance in purchasing a qualified health plan. Even if states have well-oiled eligibility and enrollment processes, bouncing kids between CHIP and the marketplace is not an efficient or effective use of state and federal resources.
There is no clear evidence that waiting periods help reduce crowd-out. The primary reason that CHIP has allowed states to use waiting periods is to discourage substitution of CHIP for private insurance. But studies on crowd-out are inconclusive and contradictory; some show little evidence that waiting periods reduce crowd-out and others show an inverse relationship between waiting periods and crowd-out. One Congressionally-mandated evaluation of CHIP estimated that direct substitution of group health insurance at the time of CHIP enrollment was 4 percent.
Making children wait for coverage seems especially cruel during a public health emergency. While children seem to be faring better than the nation’s seniors in regard to COVID-19, their future success in life depends on access to preventive and primary health care throughout their childhood and adolescence. While COVID-19 has caused so many parents to lose their jobs and job-based health insurance, it absolutely makes no sense to force children eligible for CHIP to remain uninsured for any period of time.