By Jocelyn Guyer
As I try to wrap my mind around the suggestion that CHIP’s success is a reason to convert Medicaid to a capped block grant, I wonder whether these guys have ever watched soccer or any team sport for that matter. Maybe I spent a little too much time on the soccer sidelines this weekend but, in my mind, CHIP is like a small, speedy forward who can beat the last defender and put the ball in the net. His nimble plays often make the highlight reels while the workhorses in the midfield and back on defense do the heavy lifting but rarely get any of the glory. The workhorse of the children’s health care team is Medicaid and without its steady presence on the field, the speedy little forward couldn’t score all those goals.
This may sound strange coming from such a huge fan of CHIP. Anyone who is familiar with the Georgetown Center for Children and Families knows that we applaud all that CHIP has accomplished for the nation’s children. Working in tandem with Medicaid, CHIP has helped bring the uninsurance rate of children down to a historic low and that is a win our entire country should celebrate as enthusiastically as if we had won the World Cup.
Along with Martha Heberlein and Joan Alker, two of my teammates here at CCF, I just completed a research paper on this topic. We found that the country’s experience with CHIP is a poor guide as to what would happen if Medicaid were turned into a block grant or capped program. For the Sports Center fans out there, here are our top three “plays” when it comes to this debate:
#1 Medicaid and CHIP work together to cover children, but they also serve very different roles in the health coverage system. CHIP is great program, but it is much smaller than Medicaid and has a simpler job made all the easier because it stands on the shoulders of Medicaid. CHIP covers mostly healthy children in families with income somewhat above Medicaid thresholds. In comparison, Medicaid covers eight in ten of the children with public coverage in the United States, is generally responsible for providing care to many of our sickest kids, including children with cancer, cerebral palsy, Downs Syndrome, autism, and other special health care needs. Medicaid also provides long-term care and other services to many of the nation’s seniors and people with disabilities, It’s a little known fact that one in six Medicare beneficiaries also relies on Medicaid to meet their long-term health care needs. (These seniors would be hit with a double whammy if those who seek to block grant Medicaid have their way as the House-passed budget also proposes massive Medicare cuts.) Overall, Medicaid finances 34 times as much care as CHIP.
#2 If CHIP were used as a model for a Medicaid block grant it could actually cost the federal government a huge amount of money. A key secret to the success of the CHIP is that for much of its history it has been adequately-funded. Especially since Congress raised tobacco taxes to finance its reauthorization in 2009, states have been free to make CHIP policy decisions without fear of abruptly coming up short on federal matching funds. In fact, CHIP has been growing more rapidly than Medicaid as states have made major strides in covering uninsured kids. But, there is no way that this Congress would pass a Medicaid block grant as part of deficit reduction debates that actually costs money. To put the issue in perspective, it would cost $514 billion over the next ten years to allow Medicaid to grow at the same rate that we’ve recently seen in CHIP. We are more likely to see LeBron James heading back to Cleveland before we see this Congress establishing a Medicaid block grant that is funded as well as CHIP. And, without the adequate federal funding, CHIP would be a far weaker program, plagued by waiting lists and rationing.
#3 In lean times, we’ve seen the serious short-comings of CHIP’s financing, and they’d be even more devastating if imported into Medicaid. Even with its relatively generous federal funding levels, CHIP’s history illustrates some of pitfalls associated with block granting such a vital program as Medicaid. The lack of a historical guarantee to coverage in CHIP has resulted in a dozen states shutting down enrollment at some point since the program’s inception. The uncertainty surrounding the allotment structure, especially in the years prior to reauthorization, led some states to balk at moving forward to cover more of the nation’s uninsured children. It has been bad enough for the uninsured children in these states when they ran into waiting lists, but the problems would be far worse and reverberate even more deeply through the nation’s health care system if they also afflicted Medicaid.
CHIP has had an extremely positive impact on children’s coverage despite its relatively modest size. But, it would be erroneous to assume that similar results would occur if Medicaid funding were capped in a deficit-reduction context. It would be like fielding a team of only six players in an 11 v 11 soccer tournament and expecting to bring home a trophy.
