In November, the U.S. Health and Human Service (HHS) released a report comparing plan benefits and cost-sharing under the Children’s Health Insurance Program (CHIP) to benefits and cost-sharing in plans offered on the Health Insurance Marketplace created by the Affordable Care Act (ACA). The big takeaway from this report is that CHIP health coverage in all 36 states evaluated is more comprehensive and vastly more affordable than coverage for children in the Marketplace.
In Texas, families could expect to pay an average of $814 a year in premiums and out-of-pocket costs for each child enrolled in a qualified health plan (QHP). For children enrolled in Texas CHIP, the average annual out-of-pocket costs were only $75 per year, per child.
The $75 per year estimate of out-of-pocket costs for a child in CHIP is based on an average. Higher-income families pay higher co-payments and must pay an annual enrollment fee for Texas CHIP, while some lower-income families do not have to pay the enrollment fee and have more limited co-payments. The total out-of-pocket costs (enrollment fees and cost-sharing) must never exceed 5 percent of the family’s household income during the year.
The study also found that Texas CHIP covers a much higher percentage (91 percent) of the total average cost of benefits than the Marketplace plans (76 percent). Consumers using Texas CHIP will, therefore, pay much less when they seek medical care than consumers whose children are enrolled in a Marketplace plan, making Texas CHIP a much better health care value for Texas kids and consumers
The report also states that the benefits provided by CHIP (in every state) were more comprehensive than Marketplace plans, providing more “child-specific” services such as dental, vision, and services such as occupational and speech therapy. Furthermore, the study asserts that the benefits provided by CHIP were more suitable for children with special health care needs.
What Does this Mean?
Earlier this year Congress passed the Medicare Access and CHIP Reauthorization Act which extended federal CHIP funding through September 2017. While CHIP funding is secure until then, some have questioned whether CHIP is still needed since the creation of the Health Insurance Marketplaces. What this report clearly shows is that the Marketplaces are not ready for kids, and that advocates and stakeholders should continue to support CHIP as the best way to provide health insurance to low- and moderate-income children. In addition, we must advocate for improvements to the Marketplace plans to make them more kid-friendly.