[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
THE FUTURE OF THE CHILDREN'S HEALTH INSURANCE PROGRAM
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON HEALTH
OF THE
COMMITTEE ON ENERGY AND COMMERCE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
DECEMBER 3, 2014
__________
Serial No. 113-184
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the Committee on Energy and Commerce
energycommerce.house.gov
______
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COMMITTEE ON ENERGY AND COMMERCE
FRED UPTON, Michigan
Chairman
RALPH M. HALL, Texas HENRY A. WAXMAN, California
JOE BARTON, Texas Ranking Member
Chairman Emeritus JOHN D. DINGELL, Michigan
ED WHITFIELD, Kentucky Chairman Emeritus
JOHN SHIMKUS, Illinois FRANK PALLONE, Jr., New Jersey
JOSEPH R. PITTS, Pennsylvania BOBBY L. RUSH, Illinois
GREG WALDEN, Oregon ANNA G. ESHOO, California
LEE TERRY, Nebraska ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan GENE GREEN, Texas
TIM MURPHY, Pennsylvania DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee MICHAEL F. DOYLE, Pennsylvania
Vice Chairman JANICE D. SCHAKOWSKY, Illinois
PHIL GINGREY, Georgia JIM MATHESON, Utah
STEVE SCALISE, Louisiana G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio JOHN BARROW, Georgia
CATHY McMORRIS RODGERS, Washington DORIS O. MATSUI, California
GREGG HARPER, Mississippi DONNA M. CHRISTENSEN, Virgin
LEONARD LANCE, New Jersey Islands
BILL CASSIDY, Louisiana KATHY CASTOR, Florida
BRETT GUTHRIE, Kentucky JOHN P. SARBANES, Maryland
PETE OLSON, Texas JERRY McNERNEY, California
DAVID B. McKINLEY, West Virginia BRUCE L. BRALEY, Iowa
CORY GARDNER, Colorado PETER WELCH, Vermont
MIKE POMPEO, Kansas BEN RAY LUJAN, New Mexico
ADAM KINZINGER, Illinois PAUL TONKO, New York
H. MORGAN GRIFFITH, Virginia JOHN A. YARMUTH, Kentucky
GUS M. BILIRAKIS, Florida
BILL JOHNSON, Missouri
BILLY LONG, Missouri
RENEE L. ELLMERS, North Carolina
Subcommittee on Health
JOSEPH R. PITTS, Pennsylvania
Chairman
MICHAEL C. BURGESS, Texas FRANK PALLONE, Jr., New Jersey
Vice Chairman Ranking Member
ED WHITFIELD, Kentucky JOHN D. DINGELL, Michigan
JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York
MIKE ROGERS, Michigan LOIS CAPPS, California
TIM MURPHY, Pennsylvania JANICE D. SCHAKOWSKY, Illinois
MARSHA BLACKBURN, Tennessee JIM MATHESON, Utah
PHIL GINGREY, Georgia GENE GREEN, Texas
CATHY McMORRIS RODGERS, Washington G.K. BUTTERFIELD, North Carolina
LEONARD LANCE, New Jersey JOHN BARROW, Georgia
BILL CASSIDY, Louisiana DONNA M. CHRISTENSEN, Virgin
BRETT GUTHRIE, Kentucky Islands
H. MORGAN GRIFFITH, Virginia KATHY CASTOR, Florida
GUS M. BILIRAKIS, Florida JOHN P. SARBANES, Maryland
RENEE L. ELLMERS, North Carolina HENRY A. WAXMAN, California (ex
JOE BARTON, Texas officio)
FRED UPTON, Michigan (ex officio)
C O N T E N T S
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Page
Hon. Joseph R. Pitts, a Representative in Congress from the
Commonwealth of Pennsylvania, opening statement................ 1
Prepared statement........................................... 2
Hon. Frank Pallone, Jr., a Representative in Congress from the
State of New Jersey, opening statement......................... 4
Hon. Henry A. Waxman, a Representative in Congress from the State
of California, opening statement............................... 5
Hon. Fred Upton, a Representative in Congress from the State of
Michigan, prepared statement................................... 75
Witnesses
Evelyne Baumrucker, Health Financing Analyst, Congressional
Research Service............................................... 6
Prepared statement........................................... 9
Answers to submitted questions............................... 90
Alison Mitchell, Health Care Financing Analyst, Congressional
Research Service............................................... 11
Prepared statement........................................... 13
Answers to submitted questions............................... 91
Carolyn Yocom, Director, Health Care, Government Accountability
Office......................................................... 16
Prepared statement........................................... 18
Answers to submitted questions............................... 123
Anne Schwartz, Ph.D., Executive Director, Medicaid and Chip
Payment and Access Commission.................................. 32
Prepared statement........................................... 34
Answers to submitted questions............................... 131
Submitted Material
Letter of December 1, 2014, from U.S. Conference of Catholic
Bishops to U.S. House of Representatives, submitted by Mr.
Pitts.......................................................... 77
Statement of U.S. Senator John D. Rockefeller, IV, submitted by
Mr. Waxman..................................................... 79
Statement of the March of Dimes, submitted by Mr. Lance.......... 83
Statement of the National Association of Pediatric Nurse
Practitioners.................................................. 86
THE FUTURE OF THE CHILDREN'S HEALTH INSURANCE PROGRAM
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WEDNESDAY, DECEMBER 3, 2014
House of Representatives,
Subcommittee on Health,
Committee on Energy and Commerce,
Washington, DC.
The subcommittee met, pursuant to call, at 10:16 a.m., in
room 2322 of the Rayburn House Office Building, Hon. Joe Pitts
(chairman of the subcommittee) presiding.
Members present: Representatives Pitts, Burgess, Shimkus,
Murphy, Gingrey, McMorris Rodgers, Lance, Guthrie, Griffith,
Bilirakis, Ellmers, Barton (ex officio), Pallone, Engel, Capps,
Matheson, Green, Barrow, Castor, and Waxman (ex officio).
Staff present: Sydne Harwick, Chief Counsel, Energy and
Commerce; Chris Sarley, Policy Coordinator, Environment and
Economy; Heidi Stirrup, Health Policy Coordinator; Josh Trent,
Professional Staff Member, Health; Michelle Rasenberg, GAO
Detailee; Ziky Ababiya, Democratic Staff Assistant; Kaycee
Glavich, Democratic GAO Detailee; Amy Hall, Democratic Senior
Professional Staff Member; Debbie Letter, Democratic Staff
Assistant; and Karen Nelson, Democratic Deputy Committee Staff
Director for Health.
OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN
CONGRESS FROM THE COMMONWEALTH OF PENNSYLVANIA
Mr. Pitts. The subcommittee will come to order. Chair will
recognize himself for an opening statement.
In 1992, as a member of the state House of Representatives,
I was proud to vote to create Pennsylvania's Children's Health
Insurance Program, known as PA CHIP.
In 1997, Congress created the federal CHIP program, which
was partially based on Pennsylvania's successful model. CHIP is
a means-tested program designed to cover children and pregnant
women who make too much to qualify for Medicaid, but may not
have access to purchase affordable private health insurance.
Most recently, the Affordable Care Act reauthorized CHIP
through fiscal year 2019, but the law only provided funding for
the program through September 30, 2015.
CHIP has historically enjoyed bipartisan congressional
support, and it is widely seen as providing better care than
many state Medicaid programs.
Moving forward, Congress should be thoughtful and data-
driven in our approach. The last time Congress methodically
reviewed the CHIP program was in 2009 with the Children's
Health Insurance Program Reauthorization Act, or CHIPRA.
Clearly, since that time, the Affordable Care Act has changed
the insurance landscape significantly. Provisions of the
program which may have made sense prior to the ACA might no
longer be necessary. Other changes may need to be made as well.
Like many of my colleagues, I believe we need to extend
funding for this program in some fashion. If we do not, current
enrollees will lose their CHIP coverage and many will end up in
Medicaid and on the exchanges--programs which may offer poorer
access to care or higher cost-sharing for lower-income
families. Some will lose access to insurance altogether. At the
same time, we should ensure the program complements, rather
than crowds out, private health insurance. We should also
ensure CHIP is a benefit that is targeted to those who are most
vulnerable, rather than one that effectively subsidizes
coverage for upper-middle-class families.
It is important that we think carefully about this
important program. While program funding does not run out until
September 2015, governors and state legislatures across the
country will start to assemble their budgets as soon as
January. Accordingly, the committee is very aware that states
need certainty sooner rather than later in their budgetary
planning process, and that is why Chairman Upton and Ranking
Member Waxman, along with their Senate counterparts, engaged
governors earlier this year to request their perspective on the
program. And that is why we are hearing from witnesses in our
hearing today.
So I look forward to hearing from our witnesses on the
current state of CHIP as we consider the data they will
provide, and evaluate proposals that will keep the program
strong into the future.
[The prepared statement of Mr. Pitts follows:]
Prepared statement of Hon. Joseph R. Pitts
The subcommittee will come to order.
The chair will recognize himself for an opening statement.
In 1992, as a member of the state House of Representatives,
I was proud to vote to create Pennsylvania's Children's Health
Insurance Program, known as PA CHIP.
In 1997, Congress created the federal CHIP program, which
was partially based on Pennsylvania's successful model. CHIP is
a means-tested program designed to cover children and pregnant
women who make too much to qualify for Medicaid, but may not
have access to purchase affordable private health insurance.
Most recently, the Affordable Care Act reauthorized CHIP
through FY2019, but the law only provided funding for the
program through September 30, 2015.
CHIP has historically enjoyed bipartisan congressional
support, and it is widely seen as providing better care than
many state Medicaid programs.
Moving forward, Congress should be thoughtful and data-
driven in our approach. The last time Congress methodically
reviewed the CHIP program was in 2009 with the Children's
Health Insurance Program Reauthorization Act, or CHIPRA.
Clearly, since that time, the Affordable Care Act has
changed the insurance landscape significantly. Provisions of
the program which may have made sense prior to the ACA might no
longer be necessary. Other changes may need to be made as well.
Like many of my colleagues, I believe we need to extend
funding for this program in some fashion. If we don't, current
enrollees will lose their CHIP coverage and many will end up in
Medicaid and on the exchanges--programs which may offer poorer
access to care or higher cost-sharing for lower-income
families. Some will lose access to insurance altogether.
At the same time, we should ensure the program
complements--rather than crowds out--private health coverage.
We should also ensure CHIP is a benefit that is targeted to
those who are most vulnerable--rather than one that effectively
subsidizes coverage for upper-middle-class families.
It's important that we think carefully about this important
program. While program funding does not run out until September
2015, governors and state legislatures across the country will
start to assemble their budgets as soon as January.
Accordingly, the committee is very aware that states need
certainty sooner rather than later in their budgetary planning
process. That's why Chairman Upton and Ranking Member Waxman,
along with their Senate counterparts, engaged governors earlier
this year to request their perspective on the program.
And that's why we're hearing from witnesses in our hearing
today. So, I look forward to hearing from our witnesses on the
current state of CHIP as we consider the data they will provide
and evaluate proposals that will keep the program strong into
the future.
I yield the remainder of my time to Rep. ------------------
----------.
Mr. Pitts. And I yield the remaining time to Dr. Burgess.
Mr. Burgess. Thank you, Mr. Chairman. I appreciate you
yielding the time. Just before I deliver my opening statement,
I want to say this may be my last time to serve as your vice
chair of the subcommittee, and I have certainly enjoyed our
time together the last two terms, and it has been a great honor
of mine to have been of service to this subcommittee. I won't
be leaving the subcommittee altogether, but I just won't be
vice chairman in the upcoming term.
And I am happy to be here this morning to talk about the
Children's Health Insurance Program. It is an important issue
in our Nation's healthcare. It is probably one of the most
important that we will take up over the next year, both
nationally and in the individual states. I thank you for
recognizing that states do have an obligation to generate their
budgets early in the next calendar year, and Texas, in fact,
will do a budget for the next 2 years, so they do one for the
biennium, so it is important that they have the availability of
the information about this program going forward as they
grapple with those budgetary issues.
One of the program's greatest strengths is it does provide
needed flexibility to states, including program and benefit
design and different levels of cost sharing. It has allowed for
creativity and efficiency in the program, but it also means
that each state will be affected differently if the program
loses funding at the end of the fiscal year.
I think we can all agree that the health of our country's
children requires our continuous attention, and in particular,
kids with special needs. I am anxious to learn more about how
this impacts Texas and my constituents. It is vital that we
learn what the landscape for this program looks like in a post-
ACA world. We need an accurate picture about the path forward
for what CHIP might look like going forward, and ways that
Congress can be helpful.
Mr. Burgess. And I will yield back to the chairman.
Mr. Pitts. And the chair thanks the gentleman, and again
thanks him for his service to the subcommittee. We still have
two more subcommittee hearings next week so I will keep you
busy.
And with that, I would like to congratulate our ranking
member, Mr. Pallone, for moving up to ranking member of the
full committee. Looking forward to working with you in that
regard, and appreciate having to have been work closely with
you the last 4 years as ranking member.
So with that, Mr. Pallone, you are recognized for 5
minutes.
OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE
IN CONGRESS FROM THE STATE OF NEW JERSEY
Mr. Pallone. Thank you, Chairman Pitts, and I certainly
have appreciated working with you. It has been very easy to
work with you on a bipartisan basis on so many initiatives that
actually have been passed and been signed into law, and I
actually asked Dr. Burgess yesterday if he was still going to
be on the subcommittee, because I heard that he was going to be
chairman of one of the other subcommittees, and he said, yes,
he still expected to be on the subcommittee. So I was glad to
hear that as well.
I wanted to thank you, Chairman, for having this hearing
today, and I very much look forward to making progress toward
ensuring the continued success of CHIP. It is a vital program
that provides coverage to 8.1 million low-to-moderate-income
children throughout the Nation who are unable to afford or not
eligible for other forms of coverage. And without congressional
action, funding for the program will expire next year. This
would inevitably lead to gaps in coverage for some, and lack of
coverage for many others, so we must have a conversation now
about providing funding as soon as possible.
In fact, I would urge my colleagues to consider an
extension during the lame duck to ensure predictability to the
many states that have come to rely and appreciate the CHIP
program. I don't think any would argue that CHIP should not be
extended, so let's just get it done.
Now, you said CHIP was created, it is true, in a
Republican-controlled Congress in 1997 as a joint federal-state
undertaking so that states could help determine how best to
design and administer their own programs, and ever since, it
has traditionally enjoyed bipartisan support. And this historic
support from both sides of the aisle was reflected in the
responses to Chairman Upton and Ranking Member Waxman's recent
letter to the Nations' governors, across red and blue states,
including some that did and some that did not proactively
implement the ACA, governors overwhelmingly support the
extension of CHIP funding.
I have a bill, H.R. 5364, the CHIP Extension and
Improvement Act of 2014, that would achieve this purpose while
also instituting reforms that would enable states to eliminate
administrative burdens and increase the quality of care. By
funding the program through 2019, we would provide states with
more time to plan for the future, putting them in a better
position to ensure that there are no disruptions, and
affordance and comprehensive coverage for those families who
depend on the program. Furthermore, the consequences of this
coverage are far-flung. Not only do state governments depend on
this funding, it would also support economic activities
stemming from providers who provide care to children, as well
as mothers who are able to keep themselves and their children
health, and thus, won't need to take time off from work in
order to care for their sick children.
In New Jersey, over 800,000 children are served by New
Jersey Family Care, which is funded by CHIP, and for these
families, getting coverage on the private market is still out
of reach, a sentiment that is supported by both the GAO and
MACPAC, who have shown that even with cost-sharing, CHIP is the
most affordable and comprehensive form of coverage for these
children, especially those with complex health needs. And this
is true for the millions of American families who rely on the
program, so I hope that my colleagues will join me in
supporting action this lame duck to fund CHIP for the next 4
years.
Mr. Pallone. Did anyone else want any time on our side, do
we know? I guess not.
I yield back, Mr. Chairman. Thanks again.
Mr. Pitts. The chair thanks the gentleman.
Mr. Pallone. Mr. Chairman, can I ask unanimous consent to
enter into the record written statements which I believe you
have from Families USA and the American Academy of Pediatrics?
Mr. Pitts. All right, and we have given this to you as
well, a joint letter from the U.S. Conference of Catholic
Bishops, Catholic Health Association of U.S.--Catholic
Charities USA, to add to that UC request.
Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Pitts. On our panel--and all Members' written opening
statements are being made part of the record. On our panel
today we have Ms. Evelyne Baumrucker, Analyst in Healthcare
Financing, for the Congressional Research Service; Ms. Alison
Mitchell, Analyst in Healthcare Financing, Congressional
Research Service; Ms. Carolyn Yocom, Director, Health Care,
U.S. Government Accountability Office; and Dr. Anne Schwartz,
Executive Director, Medicaid and CHIP Payment and Access
Commission, MACPAC.
Thank you for coming. You will each be given 5 minutes to
summarize your testimony. Your written testimony will be placed
in the record.
And, Ms. Baumrucker, we will start with you. You are
recognized for 5 minutes for your opening statement.
Mr. Waxman. Mr. Chairman----
Mr. Pitts. I am sorry----
Mr. Waxman. Yes.
Mr. Pitts [continuing]. I didn't notice you come in. We
have the ranking member, before you begin.
Chair recognizes the ranking Member, Mr. Waxman, 5 minutes
for his opening statement.
OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN
CONGRESS FROM THE STATE OF CALIFORNIA
Mr. Waxman. Thank you very much, Mr. Chairman.
There is another subcommittee having a hearing at the same
time as ours here, and so I am sorry I am late, but thank you
for this courtesy to me.
Today's hearing is about the Children's Health Insurance
Program. This is a rare program in Washington that has enjoyed
bipartisan support since its inception in 1997, and I am
pleased that the committee is again proceeding in a bipartisan
fashion; first with our letter to the governors, and now with
this hearing.
I strongly support an additional 4 years of funding for the
CHIP program. The evidence both from the state letters and
independent research shows that CHIP provides both benefit and
cost-sharing protections that are critical for children, but
are not guaranteed in the new health marketplaces or employer-
sponsored coverage. For the peace of mind of families, and ease
of administration and certainty for states, I believe that a
longer period allows for needed stability. That is why I
cosponsored Ranking Member Pallone's Bill, H.R. 5364, that
would provide 4 years of funding, and also give states
flexibilities to make important program improvements, like
making express lane eligibility a permanent option for states
looking to reduce bureaucracy and improve the enrollment
process. I hope that our colleagues on both sides of the
committee--the aisle in this committee will give the bill a
serious look. It is balanced and fair, and there is a lot to
look for both states and beneficiaries.
CHIP is only one piece of the healthcare system for
children. Medicaid covers more than four times the number of
children that CHIP does; 38 million in all, and with the new
marketplaces and delivery system reform initiatives, such as
medical homes, there are many positive developments to improve
care for children.
We have reduced uninsurance to a record low among children,
but there is more work to be done. No matter where a child
receives coverage, we need to ensure that it is comprehensive,
child-focused, and affordable for all families.
I want to also take a moment to honor one of the original
authors of the CHIP program, Senator Jay Rockefeller, who is
retiring this year. Senator Rockefeller fought tirelessly to
get the CHIP program established, he fought tirelessly again to
defend the program, and strengthen it during its
reauthorization. Millions of children have better lives because
of his work, and I know that he hoped to see the program put on
a stable funding path prior to his retirement at the end of
this Congress, and I would like to have his statement on the
CHIP program inserted into the record for this hearing.
Mr. Pitts. And without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Waxman. Thank you, Mr. Chairman. Yield back the balance
of my time.
Mr. Pitts. Chair thanks the gentleman.
Now we will go to our witnesses, and we will start with Ms.
Baumrucker, 5 minutes for an opening statement.
STATEMENTS OF EVELYNE BAUMRUCKER, HEALTH FINANCING ANALYST,
CONGRESSIONAL RESEARCH SERVICE; ALISON MITCHELL, HEALTH CARE
FINANCING ANALYST, CONGRESSIONAL RESEARCH SERVICE; CAROLYN
YOCOM, DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY OFFICE;
AND ANNE SCHWARTZ, PH.D., EXECUTIVE DIRECTOR, MEDICAID AND CHIP
PAYMENT AND ACCESS COMMISSION
STATEMENT OF EVELYNE BAUMRUCKER
Ms. Baumrucker. Chairman Pitts, Ranking Member Pallone, and
members of the subcommittee, thank you for this opportunity to
appear before you on behalf of the Congressional Research
Service. My name is Evelyne Baumrucker, and I am here to
provide an overview of the State Children's Health Insurance
Program. My colleague, Alison Mitchell, will address CHIP
financing and the Patient Protection and Affordable Care Act
Maintenance of Effort for Children.
CHIP is a means-tested program that provides health
coverage to targeted low-income children and pregnant women, in
families that have annual income above Medicaid eligibility
levels, but have no health insurance. CHIP is jointly financed
by the Federal Government and the states, and is administered
by the states. In fiscal year 2013, CHIP enrollment totaled 8.4
million, and federal and state expenditures totaled $13.2
billion. CHIP was established as a part of the Balanced Budget
Act of 1997 under a new Title XXI of the Social Security Act.
Since that time, other federal laws have provided additional
funding and made significant changes to CHIP. Most notably, the
Children's Health Insurance Program Reauthorization Act of 2009
increased appropriation levels, and changed the federal
allotment formula, eligibility and benefit requirements.
The ACA largely maintains the current CHIP structure
through fiscal year 2019, and requires states to maintain their
Medicaid and CHIP child eligibility levels through this period
as a condition of receiving Medicaid federal matching funds.
However, the ACA does not provide federal CHIP appropriations
beyond fiscal year 2015.
State participation in CHIP is voluntary, however, all
states, the District of Columbia, and the territories,
participate. The Federal Government sets basic requirements for
CHIP, but states have the flexibility to design their own
version within the Federal Government's basic framework. As a
result, there is significant variation across CHIP programs.
Currently, state upper income eligibility limits for children
range from a low of 175 percent of the federal poverty level,
to a high of 405 percent of FPL. In fiscal year 2013, the
federal poverty level for a family of four was equal to
$23,550. Despite the fact that 27 states extend CHIP coverage
to children in families with income greater than 250 percent of
the federal poverty level, fiscal year 2013 administrative data
show that CHIP enrollment is concentrated among families with
annual incomes at lower levels. Almost 90 percent of child
enrollees were in families with annual income at or below 200
percent of FPL.
States may design their CHIP programs in three ways: a CHIP
Medicaid expansion, a separate CHIP program, or a combination
approach where the state operates a CHIP Medicaid expansion and
one or more separate CHIP programs concurrently. As of May
2014, the territories, the District of Columbia, and seven
states were using CHIP Medicaid expansions; 14 states operated
separate CHIP programs; and 29 states used a combination
approach. In fiscal year 2013, approximately 70 percent of CHIP
program enrollees received coverage through separate CHIP
programs, and the remainder received their coverage through a
CHIP Medicaid expansion.
CHIP benefit coverage and cost-sharing rules depend on
program design. CHIP Medicaid expansions must follow the
federal Medicaid rules for benefits and cost sharing, which
entitles CHIP enrollees to Early Periodic Screening, Diagnostic
and Treatment (EPSDT) coverage, effectively eliminating any
state-defined limits on the amount, duration, and scope of any
benefit listed in Medicaid statute, and exempts the majority of
children from any cost sharing. For separate CHIP programs, the
benefits are permitted to look more like private health
insurance, and states may impose cost sharing, such as premiums
or enrollment fees, with a maximum allowable amount that is
tied to family income. Aggregate cost sharing under CHIP may
not exceed 5 percent of annual family income. Regardless of the
choice of program design, all states must cover emergency
services, well baby, and well childcare, including age-
appropriate immunizations and dental services. If offered,
mental health services must meet the federal mental health
parity requirements.
As we begin the final year of federal CHIP funding under
the CHIP statute, Congress has begun considering the future of
the CHIP program, and exploring alternative policy options. The
health insurance market is far different today than when CHIP
was established. CHIP was designed to work in coordination with
Medicaid to provide health insurance to low-income children.
Before CHIP was established, no federal program provided health
coverage to children with family annual incomes above Medicaid
eligibility levels. The ACA further expanded options for some
children in low-income families with incomes at or above CHIP-
eligibility levels by offering subsidized coverage for
insurance purchased through the health insurance exchanges.
Congress' action or inaction on the CHIP program may affect
health insurance options and resulting in coverage for targeted
low-income children that are eligible for the current CHIP
program.
This concludes my statement. CRS is happy to answer your
questions at the appropriate time.
[The prepared statement of Ms. Baumrucker follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. Chair thanks the gentlelady.
Now recognize Ms. Mitchell 5 minutes for an opening
statement.
STATEMENT OF ALISON MITCHELL
Ms. Mitchell. Thank you for the opportunity to appear
before you today on behalf of CRS to provide an overview of
CHIP financing, and the ACA Maintenance of Effort for Children.
First, CHIP financing. The Federal Government and states
jointly finance CHIP, with the Federal Government paying about
70 percent of CHIP expenditures. The Federal Government
reimburses states for a portion of every dollar they spend on
their CHIP program, up to state-specific limits called
allotments. The federal matching rate for CHIP is determined
according to the Enhanced Federal Medical Assistance
Percentage, which is also the E-FMAP rate, and this is
calculated annually and varies according to each state's per
capita income.
In fiscal year 2015, the E-FMAP rates range from 65 percent
in 13 states, to 82 percent in Mississippi. The ACA included a
provision to increase the E-FMAP rate by 23 percentage points,
not to exceed 100 percent for most CHIP expenditures from
fiscal year 2016 through fiscal year 2019, and with this 23
percentage point increase, states are expected to spend through
their CHIP allotments faster.
And these CHIP allotments are the federal funds allocated
to each state for the federal share of their CHIP expenditures,
and states receive a CHIP allotment annually, but the allotment
funds are available to states for 2 years. This means that even
though fiscal year 2015 is the last year states are to receive
a CHIP allotment, states could receive federal CHIP funding in
fiscal year 2016.
Moving on to the Maintenance of Effort, or MOE, the ACA MOE
for children requires states to maintain eligibility standards,
methodologies, and procedures for Medicaid and CHIP children
from the date of enactment, which was March 23, 2010, through
September 30, 2019, and the penalty for not complying with the
ACA MOE is the loss of all federal Medicaid matching funds. And
the MOE impacts CHIP Medicaid expansion and separate CHIP
programs differently. For CHIP Medicaid expansion programs, the
Medicaid and CHIP MOE provisions apply concurrently. As a
result, when a state's federal CHIP funding is exhausted, the
financing for these children switches from CHIP to Medicaid,
and this would mean that the state's share of covering these
children would increase because the federal matching rate for
Medicaid is less than the E-FMAP rate. For separate CHIP
programs, only the CHIP-specific MOE provisions apply, and
these provisions include a couple of exceptions to the MOE.
First, states may impose waiting lists and enrollment caps, and
second, after September 1, 2015, states may enroll CHIP-
eligible children in qualified health plans in the health
insurance exchanges that have been certified by the Secretary
to be at least comparable to CHIP in terms of benefits and cost
sharing.
In addition to these two exceptions, under the MOE, in the
event that a state's CHIP allotment is insufficient, a state
must establish procedures to screen children for Medicaid
eligibility, and for children not Medicaid eligible, the state
must establish procedures to enroll these children in
Secretary-certified qualified health plans. If there are no
certified plans, the MOE does not obligate states to provide
coverage to these children.
In conclusion, fiscal year 2015 is the last year federal
CHIP funding is provided under current law. If no additional
federal CHIP funding is provided, once the funding is
exhausted, children in CHIP Medicaid expansion programs would
continue to receive coverage under Medicaid through at least
fiscal year 2019, due to the ACA MOE, however, coverage for
children in separate CHIP programs depends on the availability
of Secretary-certified qualified health plans.
This concludes my statement, and I will take questions at
the appropriate time.
[The prepared statement of Ms. Mitchell follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. Chair thanks the gentlelady.
Now recognize Ms. Yocom 5 minutes for an opening statement.
STATEMENT OF CAROLYN YOCOM
Ms. Yocom. Chairman Pitts, Ranking Member Pallone, and
members of the subcommittee, I am pleased to be here today to
discuss the extension of federal funding for the Children's
Health Insurance Program, better known as CHIP. Congress faces
important decisions about the future of CHIP. Absent the
extension of federal funding, once a state's CHIP funding is
insufficient to cover all eligible children, the state must
establish procedures to ensure that those who are not covered
are screened for Medicaid eligibility. In states that have used
CHIP funds to expand Medicaid, children will be eligible to
remain in Medicaid. Thus, approximately 2.5 million children
will continue to receive coverage. However, for the over 5
million children who are in separate child health programs,
their coverage options are different and less certain. These
children may be eligible, but are not assured eligibility, for
the premium tax credit and for cost-sharing subsidies
established through the Affordable Care Act to subsidize
coverage offered through health insurance exchanges.
My statement today draws on past GAO work which suggests
that there are important considerations related to cost,
coverage and access when determining the ongoing need for the
CHIP program. Cost: GAO compared separate health CHIP plans in
five states with state benchmark plans, and these were intended
as models of coverage offered by the qualified health plans
through exchanges. Our studies suggest that CHIP consumers
could face higher costs if shifted to qualified health plans.
For example, the CHIP plans we reviewed typically did not
include deductibles, while all five states' benchmark plans
did. When cost sharing was applied, the amount was almost
always less for CHIP plans, with the cost differences being
particularly pronounced for physician visits, prescription
drugs, and outpatient therapies. And lastly, CHIP premiums were
almost always less than benchmark plans.
The cost gap GAO identified could be narrowed, as the
Affordable Care Act has provisions that seek to standardize the
costs of qualified health plans, and reduce cost sharing for
some individuals. However, this will vary based on consumers'
income level and plan selection. Absent CHIP, we estimated that
1.9 million children may not be eligible for a premium tax
credit, as they have a parent with employer-sponsored health
coverage, defined as affordable under IRS regulations. The
definition of affordability considers the cost of self-only
coverage offered by the employer, rather than the cost of
family coverage.
With regard to coverage, we found that most benefit
categories were covered in separate CHIP and benchmark plans
that we reviewed, with similarities in terms of the services in
which they impose day visit or dollar limits. For example, the
plans typically did not impose any such limits on ambulatory
services, emergency care, preventive care, or prescription
drugs, but did impose limits on outpatient therapies, and
pediatric dental, vision and hearing services. We also
identified differences in how dental services were covered
under CHIP and benchmark plans; differences that raised the
potential for confusion and higher costs for consumers.
With regard to access, national survey data found that CHIP
enrollees reported positive responses regarding their ability
to obtain care, and that this proportion of positive responses
was generally comparable with those in Medicaid or those who
were covered by private insurance. However, access to specialty
care in CHIP may be more limited than in private insurance. In
2010, our survey of physicians reported experiencing greater
difficulty referring children in Medicaid and CHIP to specialty
care, compared with privately insured children. We also found
that the percentage of specialty care physicians who accepted
all new patients with private insurance was about 30 percent
higher than the percentage of those who accepted all children
in Medicaid and CHIP.
Over the last 17 years, CHIP has played an important role
in providing health insurance coverage for low-income children
who might otherwise be uninsured. In the short term, Congress
will be deciding whether to extend federal funding for CHIP
beyond 2015. In the longer term, states and the Congress will
face decisions about the role of CHIP in covering children once
states are no longer required to maintain eligibility standards
in the year 2020.
Chairman Pitts, Ranking Member Pallone, and members of the
subcommittee, this concludes my prepared statement. I would be
pleased to respond to any questions you might have.
[The prepared statement of Ms. Yocom follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. Chair thanks the gentlelady.
Now recognizes Dr. Schwartz 5 minutes for an opening
statement.
STATEMENT OF ANNE SCHWARTZ, PH.D.
Ms. Schwartz. Good morning, Chairman Pitts, Ranking Member
Pallone, and members of the Subcommittee on Health. I am Anne
Schwartz, Executive Director of MACPAC, the Medicaid and CHIP
Payment and Access Commission.
As you know, MACPAC is a congressional advisory body
charged with analyzing and reviewing Medicaid and CHIP
policies, and making recommendations to the Congress, the
Secretary of the U.S. Department of Health and Human Services,
and the states on issues affecting these programs. Its 17
members, led by Chair Diane Rowland and Vice Chair David
Sundwall, are appointed by the U.S. Government Accountability
Office.
While the insights and expertise I will share this morning
build on the analysis conducted by MACPAC staff, they are, in
fact, the consensus views of the Commission itself. We
appreciate the opportunity to share MACPAC's recommendations
and work as this committee considers the future of CHIP.
Since its enactment, with strong bipartisan support in
1997, CHIP has played an important role in providing insurance
coverage and access to health services for tens of millions of
low and moderate-income children with incomes just above
Medicaid eligibility levels. Over this period, the share of
uninsured children in the typical CHIP income range--those with
family income above 100 percent but below 200 percent of the
federal poverty level--has fallen by more than half from 22.8
percent in 1997, to 10 percent in 2013. Given that the last
federal CHIP allotments under current law are now being
distributed to states, the Commission has focused considerable
attention on CHIP over the past year in order to provide the
Congress with expert advice about the program's future. This
inquiry, which is ongoing, has considered the program in its
new context, given the significant change in insurance options
available to these families, including the exchanges and
employer-sponsored coverage.
In its June 2014 report to the Congress, MACPAC recommended
that the Congress extend federal CHIP funding for a transition
period of 2 additional years, during which time key issues
regarding the affordability and adequacy of children's coverage
can be addressed. In coming to this consensus recommendation,
the Commission considered what would happen if no CHIP
allotments were made to the states after fiscal year 2015. It
found that many children now served by the program would not
have a smooth transition to another source of coverage. The
number of uninsured children would likely rise, cost sharing
would often be significantly higher, and exchange plans
appeared unready to serve as an adequate alternative in terms
of benefits and provider networks. My written testimony and the
Commission's June report provide additional information about
the nature and extent of these concerns. We are currently
updating and extending our analyses of benefits, cost sharing,
network adequacy, and coverage gaps for inclusion in our 2015
reports.
When the Commission made its recommendation to extend
funding, it noted that there was insufficient time between then
and the end of the current fiscal year to address all the
issues it identified, either in law or regulation. In addition
to examining CHIP from the perspective of children and
families, MACPAC has also considered how different policy
scenarios affect the states. Under current law, states will run
out of CHIP funding at various points during fiscal year 2016,
with more than half of the states exhausting funds in the first
two quarters. In the absence of federal CHIP funding, states
with Medicaid expansion CHIP programs, which cover about 2.5
million children, must maintain their 2010 eligibility levels
for children through fiscal year 2019 at the regular Medicaid
matching rate, meaning at increased state cost. By contrast,
states operating separate CHIP programs, now serving over 5
million children, are not obligated to continue funding their
programs if federal CHIP funding is exhausted, and will most
likely terminate such coverage.
MACPAC's commissioners feel strongly about the need to
extend funding for CHIP. A time-limited extension of CHIP
funding is needed to minimize coverage disruptions, and provide
for a thorough examination of options addressing affordability,
adequacy, and transitions to other sources of coverage. An
abrupt end to CHIP would be a step backward from the progress
that has been made over the past 15 years. In addition,
congressional action is required so that states do not respond
to uncertainty about CHIP's future by implementing policies
that reduces children's access to services that support their
healthy growth and development.
Finally, while MACPAC has recommended a 2-year extension,
it has also stated that this transition period could be
extended if the problems it has identified have not been
addressed within the 2-year period.
Again, thank you for this opportunity to share the
Commission's work, and I am happy to answer any questions.
[The prepared statement of Ms. Schwartz follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Pitts. Chair thanks the gentlelady. Thanks to all the
witnesses for your testimony.
We will now begin questioning, and I will recognize myself
5 minutes for that purpose.
Start with CRS and MACPAC. What is the impact on the
federal budget if federal CHIP funding is or is not extended,
and how does that differ based on whether the current match
rate is increased or not, and whether or not it is a 2- or 4-
year extension? Ms. Mitchell?
Ms. Mitchell. I can't tell you for sure, that is definitely
a question for the Congressional Budget Office, but I can tell
you that we, as we have said, the children in CHIP Medicaid
expansion programs would continue to receive coverage at a
lower federal matching rate through at least fiscal year 2019
due to the MOE. If CHIP funding ends, we know that at least
some children will be covered under the qualified health plans
in the health insurance exchanges with some--with subsidized
coverage, and some children would be uninsured. And you are
talking about the 23 percentage point increase, if that is
taken away, then funding for the CHIP program would be less
than under current law because we would maintain the current E-
FMAP rates, rather than the 23 percentage point increase.
Mr. Pitts. Dr. Schwartz?
Ms. Schwartz. Yes, we received a cost estimate from the
Congressional Budget Office for MACPAC's recommendation, and
for the 2-year extension CBO estimated that it would increase
net federal spending by somewhere between $0 and $5 billion
above the current law baseline. That's a very big bucket. If
CHIP were fully funded, to speak to the 23 percentage point
bump, if CHIP were fully funded in fiscal year 2016, with the
23 percentage point bump, spending would be about $15 billion.
Without it spending would be $11.3 billion.
Mr. Pitts. All right, let us stay with you, Dr. Schwartz.
What is the impact on states if CHIP funding is not extended?
Ms. Schwartz. The impact on states differs as to whether
they operate their program as a Medicaid expansion CHIP
program, in which case they have a continued obligation to
provide services for those children under the Medicaid program
at their regular Medicaid match, which is lower, in the
aggregate, about a 43 percent increase for states because of
the difference between the two matching rates. It is different
across different states because of the design decisions that
they have made, and the extent of their enrollment that is
enrolled in Medicaid expansion CHIP versus separate CHIP.
Mr. Pitts. OK. Ms. Baumrucker, there are nearly 270,000
children in Pennsylvania in CHIP. The Affordable Care Act
required states to transition CHIP children aged 6 through 18,
in families with annual incomes of less than 133 percent
federal poverty level, to Medicaid beginning January 1 of this
year. This was a big issue for people in my district in
Pennsylvania. Nationally, do you know how many hundreds of
thousands of children lost their CHIP coverage this year, and
were instead enrolled into Medicaid as a result of the
Affordable Care Act?
Ms. Baumrucker. There was an estimate--there we go. There
was an estimate that was done by the Georgetown Center for
Children and Families in August of 2013 that suggested that 21
states were transitioning--were required to transition their
separate CHIP program children into CHIP Medicaid expansion
programs as a result of the ACA eligibility changes, and
according to Georgetown and Kaiser, this represented about 28
percent of CHIP enrollees, or approximately 562,000 children.
Mr. Pitts. OK. Let's go back to MACPAC. In 2007, CBO wrote
a paper saying the literature on crowd-out for CHIP children
ranged from 25 to 50 percent. A 2012 report from the National
Bureau of Economic Research found the upper bound of the rate
of crowd-out to be 46 percent. What concerns does MACPAC have
regarding to what extent this CHIP coverage crowds out private
coverage?
Ms. Schwartz. Clearly, crowding out private coverage is not
desirable, particularly in terms of federal spending. MACPAC
has not done its own analyses of crowd-out, and we have cited
the CBO report that you have cited. The Secretary's recent
evaluation of the CHIP report--CHIP program has a much lower
number. An article that came out in Health Affairs a couple of
months ago reported a much higher number. And I think that the
experts are somewhat at a loss as to a point estimate.
We observe private coverage declining, we observe CHIP
coverage increasing, but it is very difficult to design a study
that properly teases out the role of CHIP in that dynamic.
Mr. Pitts. Ms. Yocom, you want to comment on that question?
What concerns does GAO have that might duplicate private--that
this might duplicate private coverage and unnecessarily
increase federal expenditures?
Ms. Yocom. Well, similar to what Dr. Schwartz said, there
is always a concern if you are substituting federal dollars for
private dollars. One issue with crowd-out is, it is extremely
difficult to measure, and then even if measured, it is
extremely difficult to think about causality and what happens
with it.
One of the issues that we ran into in looking at this many
years ago now, which I think is still relevant, is the fact
that the insurance coverage available was not necessarily
comparable to what was being offered. So while there was a
substitution effect, you weren't substituting a similar type of
coverage. Under the Affordable Care Act, there will be more
standardization of what is a qualified health plan, and it may
be a little bit easier to take an analysis and look and see
what types of substitution might be happening.
Mr. Pitts. Thank you.
Chair recognizes the ranking member, Mr. Pallone, 5 minutes
for questions.
Mr. Pallone. Thank you. I wanted to ask Dr. Schwartz, in
the CHIP reauthorization legislation in 2009, Congress gave
states the new option to reduce bureaucracy and help make the
Medicaid and CHIP enrollment process easier, called express
lane eligibility. And this state option was only authorized on
a temporary basis, but recently Congress acted to extend it
through September of next year. This provision allows states to
use family data from other programs like SNAP to determine
Medicaid and/or CHIP eligibility, and it is a win for families
that don't have to keep providing the same info twice, and it
is a win for states who have demonstrated this approach saves
administrative dollars.
It seems to make little sense that Congress would have to
keep authorizing this commonsense provision. So, Ms. Schwartz,
I believe that MACPAC has examined this issue, and could you
tell us what you have found, and also what the Commission
recommends with respect to express lane eligibility?
Ms. Schwartz. Yes----
Mr. Pallone. You put the mic on, yes.
Ms. Schwartz. One of our statutory requirements is to
comment on reports of the Secretary to the Congress, and in
April, MACPAC sent official comments to this committee and to
others on the mandated evaluation of express lane eligibility
by the department. In that letter, MACPAC noted its support for
making express lane eligibility a permanent option, presuming
that it does not result in incorrect eligibility
determinations.
The Commission also recommended that express lane be
extended to adults, which would be consistent with other
actions that have been taken to simplify and streamline
enrollment processes, and also would allow processing of the
family as a unit, rather than processing parents and children
separately.
The Commission also noted that it would allow states--the
13 states that have used express lane, that have invested in
this approach to continue to maintain the gains that they have
seen, noting, for example, that the state of Louisiana told the
Commission that they had reduced 200 eligibility worker
positions as a result of adopting express lane.
And finally, in that letter the Commission noted the need
for guidance from CMS to the states on how to measure the
accuracy of eligibility determinations.
Mr. Pallone. Thank you. Let me ask, as you know, just
having health insurance isn't enough; the coverage needs to be
affordable, both when you go to the doctor, and also in the
amount of money you have to pay to keep insured. And as you
know, Medicaid includes important out-of-pocket cost
protections for children with respect to premiums and
copayments. And sometimes we hear that beneficiaries need to
have more skin in the game, or states should be allowed to
charge beneficiaries more in the name of personal
responsibility. I believe MACPAC has looked into the issue of
how out-of-pocket costs like premiums affect access, and would
have you found, and again, what did you recommend?
Ms. Schwartz. Yes, in the Commission's March 2014 report to
the Congress, the Commission made a recommendation to align
premium policies in separate CHIP programs with those in
Medicaid so that families with incomes below 150 percent of the
federal poverty level should not be subject to CHIP premiums.
The research shows that children and families at this low level
of poverty are much more price-sensitive than higher income
enrollees, and below 150 percent of the federal poverty level,
premium requirements increased uninsurance substantially.
This recommendation would affect only eight states that
continue to charge CHIP premiums below 150 percent of the
federal poverty level.
Mr. Pallone. Well, thank you, Doctor. I hope we can see
Congress implement this commonsense MACPAC recommendation and
protect low-income children from losing coverage as a result of
unaffordable premiums.
And again, I just wanted to ask you, I have heard some
people argue that Medicaid is somehow harmful for patients, I
am getting into Medicaid now, and that is because there is
inconsistent quality or lack of information about quality, and
somehow the program is bad for patients, but I wanted to ask
you, do you think inconsistent quality or lack of quality info
is a problem unique to Medicaid, or is that something our
health system as a whole struggles with? I was particularly
interested in this recent study on the Oregon Medicaid program
that shows that Medicaid really does make a difference. And if
you could comment on that or any other states.
Ms. Schwartz. Yes. The Commission recently submitted a
comment letter on the department's report on use of quality
measures, the science of quality measurement, and the
infrastructure for both measuring and holding health systems
accountable for quality is growing. There is more work to be
done. A very important factor to keep in mind when looking at
differences in quality is an adjustment for health status
because, clearly, individuals who are sicker to begin with tend
to have poorer health outcomes. When the proper adjustments are
done for health status, Medicaid beneficiaries tend to do as
well as others. Of course, there is room for improvement across
the health system.
Mr. Pallone. All right, thank you very much.
Mr. Pitts. Chair now recognizes the vice chairman, Dr.
Burgess, 5 minutes for questions.
Mr. Burgess. Thank you, Mr. Chairman. And I apologize for
my absence. I am toggling between two subcommittee hearings
this morning. It is always a challenge.
Let me ask Ms. Yocom, you were talking to the subcommittee
chairman about the crowd-out issues. I am actually also
interested in the provider update rates. We oftentimes hear
SCHIP and Medicaid lumped in together, that a patient with a
private insurance policy has about a 75 percent chance of a
physician taking a new patient, whereas with Medicaid and SCHIP
lumped together, it is under 50 percent. Do you have a sense as
to where the actual CHIP program falls in that?
Ms. Yocom. The survey data that we looked at that surveyed
physicians, I believe we combined both Medicaid and CHIP
together. In looking at the MEPS data and the issues about
referring to specialist care, which seems to be where the
biggest access issue is, CHIP fared slightly better than
Medicaid, and both programs fared significantly better than
someone who was uninsured. There was a statistical difference
between those who were privately insured, however. There was
better access for someone with private insurance in specialty
care.
Mr. Burgess. I will just--I practiced for a number of years
in north Texas and my own experience was that it was hard to
find specialty physicians, particularly in Medicaid because a
larger proportion of my patients--I was an OB/GYN--and a larger
proportion of my patients were covered by Medicaid rather than
SCHIP but it was difficult. And one of the obstacles always
seemed to be the administrative barriers that were placed in
front of the physician for either being enrolled in the
program, difficulty getting paid, reimbursement rates are
always an issue, but over and above that, there was a hassle
factor associated with, particularly Medicaid, but I suspect in
both Medicaid and SCHIP.
Has GAO looked into that?
Ms. Yocom. Some of the studies we have done would confirm
that from the perspective of physicians, that it is not just
about the payment, it certainly is also about the paperwork and
the requirements that are involved.
The thing that is always difficult in looking at the
program is balancing those requirements for documentation
against some of the bad actors who are capitalizing on the
services, and I think that is a constant struggle.
Mr. Burgess. And, of course, it is just anecdotal, but I
did hear from physicians who would tell me, OK, I will see this
patient because I like you and you are a friend. I am not going
to submit anything for payment because it is just not worth
my--I will pay more in having my office submit this for payment
than I would ever be reimbursed. Is that just unique to north
Texas, or have you heard that in other areas as well?
Ms. Yocom. In the times that we have interviewed physician
groups and things like that, that has come up. There is no way
to quantify how big that is. I think many physicians do--they
do want to help people who need care, and they can't. They also
have to run a business.
Mr. Burgess. Right.
Ms. Yocom. So sometimes that is where some of those limits
come in.
Mr. Burgess. Let me just ask a question generally, and
really for anyone on the panel, but, Dr. Schwartz, it is
particularly to you. We kind of heard during this subcommittee,
during the passage of the Affordable Care Act, that once we
were able to be in the elision fields of the ACA, programs like
SCHIP wouldn't be necessary any longer. So is SCHIP still
necessary with the full implementation of the Affordable Care
Act?
Ms. Schwartz. I think when the Commission took a deep look
last year at the coverage and the benefits and cost sharing
that is available in the exchanges, these concerns surfaced,
and our analyses primarily relied on GAO's work comparing
benefits and cost sharing between separate CHIP programs and
benchmarks for the design of exchange benefits.
We are now looking, now that there are real data on
premiums, and real data on the benefits being offered by plans,
we are trying to get a better sense of where those differences
are and the magnitude of those differences. We have shared some
of that information with the Commission, and I would anticipate
some recommendations coming from the Commission by our June
report this year to address those issues around adequacy and
affordability. But right now, the Commission's concern is that
the changes are not ready for the CHIP kids, and that a
significant number of kids with CHIP would not be able to
afford the exchange coverage.
Mr. Burgess. Well, I appreciate that answer. And my time
has expired, so I will leave it there, but I do just want to
point out that June is great, but we will be talking
reauthorization prior to June, so all of the, you know,
expediting you can do with that report will be helpful to
members of the subcommittee.
So thank you, Mr. Chairman. I will yield back.
Mr. Pitts. Chair thanks the gentleman.
The ranking member has a UC request.
Mr. Pallone. Mr. Chairman, I wanted to ask unanimous
consent to submit for the record, on behalf of Congressman
Lance, a statement submitted for the hearing by the March of
Dimes.
Mr. Pitts. Without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Pitts. And the chair recognizes the gentleman from New
York, Mr. Engel, 5 minutes for questions.
Mr. Engel. Thank you very much, Mr. Chairman. Thank you for
holding today's hearing. Thank you, Mr. Pallone.
And let me first say, I have always been a strong supporter
of CHIP. With funding for the program set to end in less than a
year, I believe it is really imperative that Congress acts
quickly to provide assurances to the states and the children
served by this program, that their access to healthcare
services will continue. It is absolutely imperative. It has
been a tremendous success in my home state of New York. When
CHIP was enacted, there were over 800,000 uninsured children
living in New York. Now we are down to about 100,000 uninsured
children, which represents a nearly 90 percent decline. Our
program, titled Child Health Plus, is currently providing
quality affordable healthcare to approximately 496,000 New York
children. And after 2 decades of great success, I would like to
see funding continue for this very important program, which is
why I am pleased to be a cosponsor of Mr. Pallone's
legislation, the CHIP Extension and Improvement Act, and it is
my hope that the committee will act quickly on this
legislation.
Let me start with Dr. Schwartz. MACPAC unanimously
represented that CHIP funding be extended for 2 years. Can you
elaborate on what issues MACPAC recommends Congress, HHS, and
the states focus on in the intervening years to ensure that
children maintain access to vital healthcare services?
Ms. Schwartz. Yes. The Commission's key concerns are the
extent to which children will have an alternate source of
coverage, the affordability of that coverage, the adequacy of
the coverage in terms of the benefits that are covered, and the
adequacy of the networks, and the differential impact on
states. Those are the areas in which we are looking, and that
is the reason for the 2-year recommendation for funding because
those questions can't be solved quickly, but we believe that a
2-year time frame would provide the impetus to make those
changes to a smooth transition to other sources of coverage.
Mr. Engel. Well, thank you. Let me also say, Dr. Schwartz,
I couldn't agree more with the statement in your written
testimony, and I am going to quote you when you said, ``an
abrupt end to CHIP would be a step backward from the progress
that has been made under CHIP.'' And that is so true because
the cost of living in my area of New York is quite high, and
there is a significant difference in healthcare costs for those
on CHIP, and the child-only policies available through our
exchange, New York State of Health.
CHIP has been tremendously successful in providing lower-
middle-income children with affordable health insurance, and
for them to possibly lose that coverage would be very
unfortunate.
So, Dr. Schwartz, we touched on it a little bit before in
one of the questions, but can you or any of the other witnesses
elaborate on the cost differences between CHIP and plans
available in the various state health insurance exchanges that
have been examined? Ms. Yocom?
Ms. Yocom. Sorry. Yes. We did find that cost was one of the
areas where we could pretty consistently see that there was a
difference between CHIP and the benchmark plans. There is a
higher use of deductibles and larger deductibles. Premiums were
more likely to be lower in CHIP. And the other thing, of
course, is that CHIP is limited to 5 percent of a family's
income. On the benchmark and qualified health plan side, there
is a limit on premiums, but other costs are not necessarily
counted in that limit. So it is a little more difficult to be
sure that things remain affordable.
Mr. Engel. Thank you. Let me also ask anyone on the panel,
if CHIP funding does not continue past this fiscal year, what
will happen to the children in states that run separate CHIP
programs, but do not have plans in place through their
exchanges that are comparable to CHIP in benefits and cost
sharing? And coupled with that is, do states have any
obligation to help transition beneficiaries to affordable
exchanges plans?
Ms. Yocom. The states' obligation is to take those children
and screen them first for Medicaid eligibility, and then to
consider them for coverage under the exchange. Our work
identified about 1.9 million children who are likely not to
qualify for the exchange because of having a parent that has
employer-sponsored coverage. And affordability has been defined
as a single, self-only coverage amount, and not a family
coverage amount. That difference, in looking at what the costs
are, could place some people out of the market in terms of
being able to afford----
Mr. Engel. And that just shows how imperative it is that
CHIP funding continues past this fiscal year.
Thank you, Mr. Chairman.
Mr. Pitts. Chair thanks the gentleman.
We still have two more hearings next week in the Health
Subcommittee, but let me just say in case I don't get to say it
next week, we are going to be losing Dr. Gingrey, a very valued
member of our Health Subcommittee, and I am pleased to
recognize him for 5 minutes for questions at this time.
Mr. Gingrey. Chairman Pitts, thank you very much. I
certainly appreciate that. I am going to miss you guys and gals
on this great committee.
My question and comment will pertain to fiscal
responsibility and, indeed, sanity. So before I get into that,
I want to make sure everybody understands, my colleagues
especially, that I think the Medicaid program is a great
program, going back to 1965. And I think the CHIP program, in
Georgia we call it Peach Care, I think it is a great program,
going back to 1997 and 2009, and all that has been discussed,
but naturally, I am a fiscal conservative, and--as we all
should be, and worried about the increased spending and
responsibility, particularly to our states.
Obamacare included a provision which requires, as you know,
the states to maintain income eligibility levels for CHIP and
Medicaid through September 2019 as a condition of receiving
payments under Medicaid and SCHIP, notwithstanding the lack of
corresponding provision federal appropriations for fiscal year
2016 through 2019. This provision is often referred to, as has
been mentioned, the Maintenance of Effort, or MOE, requirement.
While Medicaid and CHIP costs are increasing, is this
effectively an unfunded mandate on states? And the last
question, and more importantly, while a lot of states, a lot of
states, have suggested extending the CHIP funding for these--
that 4-year gap, is it fair to say that they are assuming that
the MOE, Maintenance of Effort, remains, but they might feel
differently if MOE was scraped. And I, indeed, have called many
times since March of 2010 for eliminating that Maintenance of
Effort requirement. I think if--you might have more states
accepting Medicaid expansion up to 133 percent of the federal
poverty level if they could make sure that the people that were
enrolled were indeed eligible, and doing that periodically, if
it is every 1 or 2 or 3 years or whatever, because we want the
money to go to those that really need it.
So any member really of the panel, and we can start with
Ms. Baumgartner if you like. I know I mispronounced your name,
but why don't you go ahead and respond to that for me, if you
will?
Ms. Baumrucker. So I hear--there are a lot of issues that
you discussed in the--in your question and in your comment
about whether or not CHIP funding--what is the responsibility
of states after the MOE--with the MOE in place. And so as we
have discussed on the panel today, Medicaid expansion children
continue to be enrolled in the Medicaid program, and are
matched at the federal matching rate for the Medicaid program.
The separate CHIP children, if there are qualified health
coverage through--if there are Secretary-certified plans
available in the exchanges, separate state children would first
be screened for Medicaid, and if they are eligible, they would
be enrolled there. Otherwise, the CHIP program requires them,
under current law, to be--if there are certified coverage
that--enrolled in that coverage. So if you remove the MOE
requirements, then it would be up to states as to whether or
not they would continue their child coverage going forward, but
at this point, that 2019 requirement requires states to
maintain Medicaid, and the CHIP question----
Mr. Gingrey. Well, Dr. Schwartz, would you like to respond
to that as well?
Ms. Schwartz. I would just say that in talking with the
folks who run CHIP programs in the states, that they are very
concerned about needing to know what the future is for their
state budgeting purposes, and concerned about what will happen
to the kids that they are currently responsible for. And I
believe that is well reflected in the letters from the
governors----
Mr. Gingrey. Well, I am going to interrupt you just for a
second. I apologize for that, because my time is running out
and I wanted just to make a comment.
The question was brought up about the express lane process,
and expanding that into the future. I am very concerned about
the express lane if people that are eligible, let's say, for
the SNAP program are automatically eligible for Medicaid
expansion or SCHIP, when there are some states, and we know
this, who make people eligible for the SNAP program by virtue
of the LIHEAP program, where they are giving them $1 a month to
make them eligible, and then they are automatically eligible
for SNAP. And now this express lane would make some of those
people automatically eligible for the SCHIP program and
Medicaid expansion. So it goes on and on and on. And we have a
responsibility on this committee to make sure that we look at
that problem and solve that before we go expanding coverage and
appropriations for an additional 4 years.
So, Mr. Chairman, thanks for your indulgence, and I yield
back.
Mr. Pitts. Again, the chair thanks the gentleman.
And now recognize the gentlelady from California, Ms.
Capps, 5 minutes for questions.
Mrs. Capps. Thank you, Mr. Chairman, Ranking Member
Pallone, for holding such an important hearing.
Since its inception, CHIP, or C-H-I-P, has been a critical
healthcare program for children. I think we all agree upon
that. It has let parents rest easier and has shown the Nation
what bipartisan support can do to make a real impact on each of
our communities. And my background as a long-time school nurse,
I can't impress upon my colleagues, and I know I have run this
into the ground, but the importance of our children having a
formal connection early on to the healthcare system, not just
for when they get sick, but to keep them healthy, to keep them
thriving and ready to learn.
The CHIP program is key to the health and economic security
of all of our families, linking over 8 million of our Nation's
children to care, and together with Medi-Cal, my state's
Medicaid program, which we call CHGP in California, these
programs have cut the rate of children's uninsurance by half.
This is something that must be supported and continued.
And one thing I want to touch on briefly in response to a
question earlier from our chairman, MACPAC does offer
impressive coverage statistics for children over the history of
CHIP. The share of near-poor children without health insurance
has dropped 22.8 percent in 1997, to 10 percent in 2013, which
is remarkable. Even while private coverage rates declined from
55 to 27.1 percent. Simply put, at a time when employer-
sponsored coverage was declining, we still managed to bolster
coverage for children.
Private coverage rate--rates also declined precipitously
for near-poor adults, from 52.6 percent to 35.8 percent. So
clearly, CHIP wasn't the reason why private rates declined, but
it and Medicaid were the reason why children's coverage
improved, despite an overall decline in private coverage.
Similarly, all of you--each of you has highlighted
significant issues that could arise if the CHIP program is not
funded for additional years. Children could become uninsured,
eroding the progress we have made since the beginning of the
program, and cost to taxpayers would go up, since keeping kids
in CHIP costs the Federal Government so much less than moving
them to an exchange marketplace coverage.
So my first question, just to get on the record, and I
don't care who answers this, if CHIP funding is not extended,
what would happen to the overall rate of uninsured children?
Anyone want to put that out?
Ms. Schwartz. I don't think we have calculated an overall
rate of uninsured children, but the estimate that we have
relied on to date is that about 2 million children would lose
coverage. We are now doing additional analyses to get a better
sense and more clarity around that number.
Mrs. Capps. Thank you. And I think that gives us the big
picture of how important this program is.
And for those CHIP children who would become insured
through the exchanges, how would this affect their level of
appropriate age-specific benefits and the affordability of
coverage? Again, sort of a generalized question for anyone.
Thank you, Ms. Yocom.
Ms. Yocom. Sure. Affordability certainly would change, and
costs would likely be higher for families who move from CHIP to
the exchange. In terms of benefits, we identified a few
benefits that were generally better under CHIP than under
Medicaid----
Mrs. Capps. Yes.
Ms. Yocom [continuing]. Sorry, under the exchanges, and
those were vision and dental----
Mrs. Capps. Yes.
Ms. Yocom [continuing]. And some on rehabilitative
services, but that was a bit more mixed. There were also CHIP
plans that did not have rehabilitative services as well.
Mrs. Capps. I see. So, Dr. Schwartz, specifically for you,
in terms of logistics, if CHIP funding is not extended, what
are the implications for state legislatures?
Ms. Schwartz. State legislatures will begin meeting soon.
Those that meet for less than the full year, in January, are
very concerned about this issue, and need to have some kind of
contingency plan if the federal funding runs out. The National
Conference of State Legislatures have said that this is
problematic for all state legislatures, whether they have a
full-time legislature or one that meets every 2 years, or one
that meets annually.
Mrs. Capps. Is there an estimate on when states would run
out of CHIP money, and when families would have to be notified
that they will no longer have coverage?
Ms. Schwartz. With regard to when the funding would run
out, it is different in different states, as I mentioned in my
testimony. But every state will run out by the end of 2016.
On the question of notice requirements, there are notice
requirements under current law. This is a somewhat unique
situation, and so that would be an area where, certainly, we
would like to get some clarity from CMS about what states would
be required to do.
Mrs. Capps. I know I am over my time, but for our part, I
don't believe we as a committee would allow that to happen, and
that is why H.R. 5364, the CHIP Extension Improvement Act, is a
good bill to sign on to. Happy to have done that.
Thank you very much again for being here.
Mr. Pallone [presiding]. Gentlelady's time has expired.
The chair now recognizes the gentleman from Virginia, Mr.
Griffith, 5 minutes for questions please.
Mr. Griffith. Thank you, Mr. Chairman.
And if anyone could respond to this, or all of you, in
response to Chairman Upton and Ranking Member Waxman's letter
and questions, Virginia Governor, Terry McAuliffe, raised the
issue of allowing coverage of medically necessary institution
for mental disease, and the placements for CHIP-eligible
children, which is currently available to children on Medicaid.
Given the work that this committee has done on mental health
under Chairman Murphy, or in the Oversight and Investigations
Committee that Chairman Murphy chairs during this past year,
and hearing that testimony, and, of course, being aware of the
tragedies that took place, while it may not have been helped,
at Virginia Tech and elsewhere in Virginia, I think this is
something that ought to be considered.
Do any of you all have thoughts on whether or not CHIP
should include providing this type of mental health coverage?
Ms. Schwartz. I would just say that MACPAC began this fall
a focused inquiry on behavioral health services in Medicaid and
CHIP. We are still learning and identifying the problems and
the concerns. Coverage in institutions of mental diseases in
Medicaid has certainly been a concern, and that will be an area
where you will see more from us in the future.
Mr. Griffith. Because one of the areas--just to underline
this for you all--one of the areas that we have identified, and
Chairman Murphy's hard work on this issue and those of us on
that committee, is that so many young people, particularly
young males between the ages of 14 and it goes over to like 28,
which would not apply to CHIP, but particularly these 14-year-
olds I am concerned about and up to the 18 age, they are not
getting treatment. They know there is something wrong, the
families know there is something wrong, but they are not even
going in to get treatment for over a year before they begin,
and that creates a lot of--or starts the process, and in a lot
of cases it ends up in very tragic situations without getting
that treatment.
All right, let us move on to other subjects while I still
have some time.
The American Action Forum, run by former CBO Director, Doug
Holtz-Eakin, estimated in September that 1.6 million children
currently in CHIP would fall into the family glitch.
Ms. Baumrucker, can you explain for those who might be
watching this hearing later or now, what is the family glitch
and why is that of concern particularly related to CHIP?
Ms. Baumrucker. So under the regulation from CMS, or IRS,
affordability or whether or not you have access to insurance
coverage that is affordable, so whether you would have access
to subsidized coverage through the exchanges, is defined
against an individual, not a full family. And so the idea
behind families that would fall into that family coverage
glitch is that they may have access to employer-sponsored
insurance, but that that insurance coverage would be under the
9.5 percent of their annual family income, and so would be
considered affordable, but may or may not be based on their
income against poverty level.
Mr. Griffith. OK, so if I can clarify, and I understand it
but I want to make sure the public understands it as well. What
you are talking about is, is that in order to be affordable, it
has to be 9.5 percent of the individual's income or the family
income, but that is determined against the individual
employee's wages, and if they happen to have, particularly in a
single-parent household and they have three or four children at
home, when you add the cost of covering the children, it is no
longer 9.5 percent or less of their income, it goes up above
that, but for purposes--the Affordable Care Act did not take
that into calculation, or at least the regulations based upon
the Affordable Care Act, did not take that into consideration,
and so we have families out there who, notwithstanding the fact
it is deemed affordable by the Internal Revenue Service, it may
not be affordable. Is that a correct restatement of what you
said?
Ms. Baumrucker. I would agree with that.
Mr. Griffith. I appreciate that. Thank you so much.
That being said, and I am going to have to truncate this a
lot because I talk too much, which often happens. Dental
insurance, there is a real concern there with the dental
insurance aspects related to the Affordable Care Act, and of
course, we know there was the double counting issue. Related to
CHIP, what can you all tell me about how many children are
currently getting dental services under CHIP, and how this may
be impacted as well by the Affordable Care Act? And I saw Ms.
Yocom nodding. I would be happy for you to give me an answer.
And I have 20 seconds left.
Ms. Yocom. OK. No pressure. We did do some work on dental,
and it is sort of a good-news, bad-news. The good news is
dental coverage and use of dental services in Medicaid and CHIP
has actually shown some improvement over the last few years.
The bad news is it is still not on par with private insurance.
OK?
Mr. Griffith. I appreciate that.
And my time being up, I yield back. Thank you, Mr.
Chairman.
Mr. Pitts. Chair thanks the gentleman. And----
Mrs. Capps. Mr. Chairman.
Ms. Pitts [continuing]. Mrs. Capps, you are recognized for
a UC request.
Mrs. Capps. Yes. I apologize for not doing this on my time
but I wanted to ask unanimous consent to insert into the record
the statement from the National Association of Pediatric Nurse
Practitioners in support of the Child Health and Disability
Prevention Program, and swift passage of funding for this
program. And I yield back.
Mr. Pitts. And without objection, so ordered.
[The information appears at the conclusion of the hearing.]
Mr. Pitts. Ms. Castor, you are recognized for 5 minutes for
questions.
Ms. Castor. Thank you, Mr. Chairman. And I want to thank
you and Ranking Member Pallone for your leadership on SCHIP.
And I would like to thank our witnesses who are here today for
lending your expertise on the financing of SCHIP, and the
impact of various policy decisions at the federal and state
level.
I come from the state of Florida, and we take great pride
that an early precursor to SCHIP was developed in the state of
Florida, in the late '80s and early '90s. I think it was very
smart, they created insurance that is specific to children's
needs, and they started with public school enrollment to create
a large group that gave the state negotiation power to go out
and get the best rates to cover children, and they used the
data that they gathered there to demonstrate to other states
that it is very cost-effective, that--compared to adults a lot
of time, children are pretty inexpensive when it comes to
taking care of their healthcare needs. So that allowed other
states and the Federal Government to say, hey, this is a smart
policy to invest in children, negotiate lower rates for
healthcare coverage.
So now, years later, it is widely embraced, and in response
to the committee's July correspondence to states asking for
their input, the overwhelming number of states have said, yes,
Congress, please extend funding for State Children's Health
Insurance Program. So we should do this as soon as possible,
the Congress should act. First, it would give families the
peace of mind that they need that their children are going to
be able to get to the doctor's office, get the vaccination
thingy, get the dental care that they need, but as Dr. Schwartz
has pointed out, early in the new year, states are going to be
putting their budgets together and they really need this
information from the Congress and on the federal side of what
the funding is going to be. So I would urge us to try to get
this done in the lame duck to give that certainty, or at least
in the early part of the new year tackle it and move it through
as quickly as we can.
I would like to ask a couple of questions about who remains
uninsured, and what the barriers are, because even with all of
this progress over the past years, we still have--I don't know,
Dr. Schwartz, did you say 10 percent uninsured? It varies state
to state. In my State of Florida, we are still not doing all
that we should.
What are the barriers today to getting children enrolled?
Does it involve the waiting lists, and then I will have a
couple of other questions to ask you.
Ms. Schwartz. Well, I think there are many different
factors, and I am not going to be able to quantify how much
each contributes to that amount. There are many children who
are eligible for Medicaid and CHIP who are not enrolled because
of lack of awareness or lack of understanding. Certainly,
waiting periods for CHIP coverage do mean that those children
remain uninsured in the period in which they have applied, but
are not eligible for coverage. There are children as well whose
immigration status does not permit them to be covered under
Medicaid and CHIP.
Ms. Castor. So on the waiting list issue, the MACPAC has
advised the Congress that one way to ensure that children get
covered is to eliminate those waiting lists. And hasn't this
been the trend in states over the past couple of years? I think
I read that at least 20 states have eliminated that waiting
list. Unlike the State of Florida, unfortunately, I think they
still say, OK, families and kids, you have to wait 2 months,
which really doesn't seem to make a lot of sense when you
acknowledge it is important for children to be healthy and
ready to learn in the classroom. What is going on with the
waiting list?
Ms. Schwartz. Yes, you are correct that states have been
eliminating their waiting lists. The 37 states that began 2013
with CHIP waiting periods, by 2014, 16 had eliminated those.
The Affordable Care Act also required states to limit waiting
periods to 90 days. And as well, there are a number of
exemptions to the waiting period. Some states have told u s
that it takes a lot of work to go through and tick off all
those exemptions, and it is just better to have no waiting
period at all, and that was one of MACPAC's recommendations.
Ms. Castor. Great. Great. And then what role do you think
the transition to Medicaid Managed Care has played in erecting
barriers to children being covered, and the fact that a number
of states have not expanded Medicaid? Does that also play a
role in creating a barrier to enrollment?
Ms. Schwartz. The expansion of Medicaid that states have
the option of taking, of course, applies to adults. It does not
apply to children. Children are covered in every state. I am
not aware of any research that shows that Managed Care is a
barrier to insurance, and in fact, there are many who would
argue that Managed Care provides a system of care for a child
with someone--and an organization responsible for that care. So
I am not able to provide an answer on that.
Ms. Castor. MACPAC has not examined that?
Ms. Schwartz. Not from that perspective.
Ms. Castor. OK, thank you very much.
Mr. Pitts. Chair thanks the gentlelady.
And recognizes the gentleman from Florida, Mr. Bilirakis, 5
minutes for questions.
Mr. Bilirakis. Thank you, Mr. Chairman. Appreciate it.
Thanks for holding this hearing.
Ms. Mitchell, CHIP is a capped allotment and not mandatory
spending like some other federal programs. Can you talk about
how CHIP has provided more robust federal budget discipline
compared to Medicaid and Medicare? Does the flexible benefit
design help to control costs and increase outcomes in the
program?
Ms. Mitchell. Medicaid and CHIP are very different from a
financial standpoint. They are both mandatory funding. CHIP has
the capped allotments that states receive every year. Medicaid
is open-ended. So for every dollar a state spends on their
Medicaid program, they receive a portion of that back,
according to their FMAP rate. And the FMAP rate for Medicaid is
less than the E-FMAP rate that states receive for CHIP. In
fact, it is--the E-FMAP rate is--for the states are 30 percent
reduction in what states receive under the FMAP rate. So that
is the difference between the financing on those two.
Mr. Bilirakis. OK, thank you. Another question, under the
President's healthcare law, about half the states have expanded
Medicaid to cover childless adults, and again, this is for Ms.
Mitchell. Yet, CHIP is facing a funding cliff. I am concerned
that we could be subsidizing the care of able-bodied adults,
and may have lost our focus on the poor and underserved
children. That is what it was intended to do, in my opinion.
When CHIP was initially passed, who was the target
population, I want to hear, and under the broad eligibility
provisions today, how has that eligibility income level
shifted? This is for Ms. Mitchell.
Ms. Mitchell. When CHIP was passed in 1997, the target
population was targeted low-income children that did not have
access to insurance. So that was the point of CHIP. Did you
have anything to add to that?
Ms. Baumrucker. Sure. As part of the CHIP program, or CHIP
Reauthorization Act, as well, there was attention that the
Congress put on finding and enrolling uninsured children in the
Medicaid program eligibility limits, and to try and bolster
that lower income--those lower-income families over the CHIP
children at higher income thresholds. So there is that target
group. Without CHIP funding, there is a potential, as we have
noted on the panel, that some could become uninsured going
forward.
Mr. Bilirakis. Thank you. Thank you.
Ms. Yocom, OMB has labeled CHIP as a high-error program, an
estimated 7 percent improper payment rate. I know that GAO has
looked at program integrity within Medicaid, but have they
looked at the CHIP program?
Ms. Yocom. We have not.
Mr. Bilirakis. OK. Can you talk about some of GAO's
Medicaid integrity recommendations, since some states run CHIP
inside the Medicaid program?
Ms. Yocom. Sure. Many of GAO's recommendations on program
integrity and Medicaid relate to making sure that CMS and the
states work together and collaborate on both information
systems and oversight. We most recently have recommended that
there be a more intensive look at Medicaid managed care, in our
most recent study, we really found that CMS and the states, and
even the Inspector Generals, were not spending time looking at
whether payments made by managed care organizations and
payments made to managed care organizations were done in a
fiscally responsible way. So that is an area of significant
need right now.
Mr. Bilirakis. Thank you very much.
Dr. Schwartz, has MACPAC looked at the feedback the
governors provided about the current design of the CHIP
program, and if so, can you talk about how this will factor
into what recommendations MACPAC may be making?
Ms. Schwartz. Yes. At the staff level we have seen some but
not all of the letters that I believe have been sent to the
committee. I understand the committee is releasing them and--in
which case we will brief our commissioners at our meeting next
week, and that will provide the strongest voice for the state
perspective in MACPAC's deliberations, because our analyses and
our recommendations focus on children, families, the Federal
Government and the states. So we are very grateful to the
committee for asking for those letters from the states because
I think we will find them very useful.
Mr. Bilirakis. Very good. Thank you.
I yield back, Mr. Chairman.
Mr. Pitts. Chair thanks the gentleman.
Now recognize the gentleman from Pennsylvania, Dr. Murphy,
5 minutes for questions.
Mr. Murphy. Thank you, Mr. Chairman.
Ms. Yocom, one of the concerns of Medicaid is that the
program doesn't always provide good access to care, in part due
to the low reimbursement rates. And I believe in your report
from GAO, the GAO report also says that the ways to improve
access to providers is to change their reluctance to be part by
changing what is basically low and delayed reimbursement and
provider enrollment requirements. That is from the GAO report.
So I understand that GAO did some work comparing Medicaid and
CHIP kids' access to care in that 2011 report. Can you talk a
little bit about the findings of that report, what may be the
difference in care for children in CHIP versus Medicaid?
Ms. Yocom. OK. Yes. The report that you are referring to
did not get to the point of what was the quality of care
received. We did get to the point of looking at how much
utilization occurred in each type of program, and whether or
not there were perceptions of access with each of these
programs. We did find that perceptions of access at the primary
care level were equally strong across Medicaid, private
insurance, and CHIP. And in terms of utilization of primary
care services, we didn't find a statistically significant
difference in utilization across the private insurance, across
Medicaid, and across CHIP.
Where we did find a significant difference was with
specialty care, both in terms of physicians reporting
difficulty referring individuals for specialty care, and then--
in Medicaid and in CHIP, and then also with utilization rates
of specialty care. Also perceptions of access for specialty
services were also lower for Medicaid and for CHIP.
Mr. Murphy. Well, let me--they are lower for Medicaid and
CHIP. One of the questions I have about access, and you heard
Mr. Griffith make reference to the hearings we have had on
mental health and mental illness, one of the barriers we find
that the Federal Government has created under the Medicaid
program is what is called the same-day billing rule. You can't
see two doctors in the same day.
Ms. Yocom. Yes.
Mr. Murphy. Now, to me, that is an absurd barrier we have.
Knowing that early symptoms of severe mental illness begin to
appear, in 50 percent of cases, by age 14. Some may even appear
earlier. And to have access to a pediatrician or a family
physician might, say, Ms. Jones or Ms. Smith, your child is
showing some problems here, we need to get them to see a
psychiatrist/psychologist right away.
Ms. Yocom. Yes.
Mr. Murphy. Medicaid says, nope, you have to come back.
When we know that they can be referred in the same day,
compliance is very high when they have to come back, it is a
problem. And there is an average of 112 weeks between the first
symptoms and first professional involvement.
Does CHIP have the same barrier that Medicaid has, do you
know----
Ms. Yocom. I----
Mr. Murphy [continuing]. Or would anybody in the panel know
about that?
Ms. Yocom. I don't believe so, but I don't know of any now.
Mr. Murphy. But that--because that is one of the critical
barriers in terms of----
Ms. Yocom. Right.
Mr. Murphy [continuing]. Access and quality if Medicaid--
and I think one of the reasons there is stigma with mental
illness is you can't get help.
Ms. Yocom. Right. And I----
Mr. Murphy. And so----
Ms. Yocom. I do know there are states and options that can
allow you to bill two providers on the same day, and--by
identifying the providers. So hopefully, not too similar to
MACPAC, but we also are doing a look right now at behavioral
health services and some of the issues related to obtaining
access.
Mr. Murphy. I hope some of you can give me an answer to
that question----
Ms. Yocom. Yes.
Mr. Murphy [continuing]. Because the committee--if funding
for the CHIP program is not extended, I am concerned that many
kids are going to lose their coverage and be enrolled in the
exchange under the Affordable Care Act, but what we have also
heard from a number of employers and a number of families is
what appears to be a lower cost is a very high deductible. And
so basically now they are given catastrophic insurance where
they are paying thousands of dollars as a deductible.
Now, in your testimony, you indicated that approximately
1.9 million children would not qualify for a subsidy in the
marketplace due to the employer-based coverage being available.
Without CHIP, isn't it likely that many of these children are
just going to go uninsured then, Ms. Yocom?
Ms. Yocom. I believe it is likely, yes, absent----
Mr. Murphy. And anybody else have a comment on that, would
some of these kids just then go without care?
Ms. Schwartz. That is MACPAC's concern as well, and what we
are trying to get better data on--at the moment are what the
offers are for dependent coverage for the parents that have
employer-sponsored coverage, and what the costs for that
coverage look like.
Mr. Murphy. Well, I just want to say, and Mr. Pallone may
be surprised to hear me say this, but there are some government
programs that are doing pretty well, and I think in this one,
CHIP has got some value, I know in Pennsylvania has a strong
demonstrated value, and rather than cut something that is
working, we should find a way of learning lessons of value from
this and not making families go without insurance. So I thank
you very much.
I yield back, Mr. Chairman.
Mr. Pitts. Chair thanks the gentleman.
Now recognize the chair emeritus of the full committee, Mr.
Barton, 5 minutes for questions.
Mr. Barton. Thank you, Mr. Chairman. I just got here. I am
going to pass on questions. I guess I will ask one question
just for the record.
In your opinion, if the next Congress significantly changes
the Affordable Care Act, which I think we will, would you
recommend that we maintain SCHIP as a separate program, or
would it--would you recommend we fold it in with whatever we
end up doing with the Affordable Care Act? And I will let
anybody who wants to answer that.
Ms. Schwartz. It was MACPAC's--the Commission's intention
in making its recommendation for a 2-year extension of CHIP
funding to use that 2 years to find a way to make sure that
there is integration of children into other forms of coverage,
to ensure that that coverage works well for children, and that
there is not loss of coverage for people.
Depending upon what the Congress does, the strategies for
that integration might have to change, but that clearly is part
of the intention behind the rationale behind the Commission's
recommendation.
Mr. Barton. Anybody else? OK, well, Mr. Chairman, I am
going to--Ms. Yocom, did you want to say something?
Ms. Yocom. I was going to point to one study that GAO did
that looked at the association between parents and caretaker
coverage with children's coverage, and we did find that there
is a stronger--there is a strong association with parents who
have coverage--they're far--their children are far more likely
to be covered if they have coverage that is similar to their
parents. When the coverage gets mixed, the likelihood of a
child obtaining insurance is slightly lower. We did not find
anything about utilization or access, however.
Mr. Barton. OK. Mr. Chairman, I am going to yield back. I
was one of the authors of the last reauthorization of the SCHIP
program, so I am a supporter of it. I haven't studied the issue
well enough to know where we are going to go in the next
Congress, but I will definitely work with you and other members
of this subcommittee to do that.
Mr. Pitts. The chair thanks the gentleman.
Now recognize the gentlelady from North Carolina, Ms.
Ellmers, 5 minutes for questions.
Mrs. Ellmers. Thank you, Mr. Chairman, and thank you to our
panel for being here today.
One of the issues that I have been working on that is very
important to me is access to healthcare services for children
with life-threatening illnesses. Congressman Moran and I have
sponsored bipartisan legislation, the Children's Program of
All-Inclusive Coordinated Care, or ChiPACC--Act of 2014, which
is H.R. 4605. A little promotion there.
Basically, this is based on a collaborative model of care
developed by Children's Hospice International. This model
provides comprehensive and coordinated care for Medicaid-
eligible children who suffer from life-threatening diseases.
Currently, the ChiPACC program is operating in five waiver
states. This legislation would allow states the flexibility to
implement ChiPACC as a Medicaid state plan option. The program
provides improved access to critical care services for this
population of children, while resulting in cost savings through
their state Medicaid program.
I would just ask that you look into that piece of
legislation because, again, we will be putting it forward into
the new Congress.
My questions, starting off with Dr. Schwartz. When our
committee asked our state about CHIP funding, the state
emphasized that the CHIP funding expires qualified plans. A
federal facilitated marketplace could experience an increase in
cost sharing by thousands of dollars per year. Of course, that
depends on the number of children, health status and state of
the children at the time. Therefore, would a compromise be made
to continue the CHIP program with a greater financial
contribution higher than the current 5 percent threshold, but
lower than the cost sharing that would be incurred on the
federally facilitated marketplace? In other words, how do we--
from the beneficiary's perspective, increase their portion?
Ms. Schwartz. MACPAC is currently undertaking analyses to
look at the impact of cost sharing, particularly in the
exchanges on families----
Mrs. Ellmers. Yes. Yes.
Ms. Schwartz [continuing]. And that impact varies quite a
bit based on the healthcare use of the children. So the
children you are most concerned about stand to have the highest
cost sharing----
Mrs. Ellmers. Yes.
Ms. Schwartz [continuing]. Because of the service level
cost sharing.
Mrs. Ellmers. Yes.
Ms. Schwartz. But that could be--what you suggest could be
certainly one approach that we could look at.
Mrs. Ellmers. OK. Also, as a follow-up to that, under
current law for 2016, or will be implemented in 2016, the CHIP
enhanced federal medical assistance percentage is scheduled to
increase by 23 percent. Now, according to MACPAC or CBO
estimates, will the additional billions of dollars that will be
generated from that in federal funding result in more children
receiving health coverage? Will there be an increase in the
number? And I apologize if any of these questions have already
been posed to you because I did come in late.
Ms. Schwartz. OK, the increased funding results from when
you have a higher matching rate, the states use the money more
rapidly, and so to get through the same period of time with the
same enrollment----
Mrs. Ellmers. Yes
Ms. Schwartz [continuing]. It requires more dollars. It is
not based on a change in enrollment.
Mrs. Ellmers. So it won't increase the number of children
receiving services?
Ms. Schwartz. That is affected by the eligibility level,
not by the match rate.
Mrs. Ellmers. OK. Ms. Yocom, I have a question for you. How
much money could Congress save in federal taxpayer dollars if
the 23 percent increase were set aside or scraped?
Ms. Yocom. I am sorry, I don't think I can answer that. One
of the things that happens with increasing that matching rate
is the funds will disappear more quickly----
Mrs. Ellmers. Yes.
Ms. Yocom [continuing]. And that could lead to states
struggling to continue to cover their----
Mrs. Ellmers. Yes. But that hasn't necessarily been
something that the GAO has already looked into?
Ms. Yocom. It is not something we have looked at now.
Mrs. Ellmers. OK. OK, well, thank you very much.
And, Mr. Chairman, I yield back the remainder of my time.
Thank you.
Mr. Pitts. Chair thanks the gentlelady.
Now recognize the gentleman from New Jersey, Mr. Lance, 5
minutes for questions.
Mr. Lance. Thank you very much, and good morning to you
all. I have been involved in another hearing. This is an
incredibly important topic.
A number of members on the subcommittee, including me, are
from states that extend CHIP coverage to pregnant women. As I
understand it, it is estimated that about 370,000 pregnant
women are covered each year in the 18 states that offer the
coverage. Is there data to suggest that pregnant mothers have
better health outcomes with CHIP as opposed to Medicaid?
Whoever on the panel would be interested in responding to that.
Ms. Yocom. I am not aware of data that shows that, so no.
Mr. Lance. Anybody else? Regarding another aspect of this
issue, Ms. Tavenner said to a senate committee that existing
CHIP regulations require assessment for all other insurance
affordability programs, including Medicaid and the premium tax
credit when CHIP eligibility for a child is ending. Can any of
the distinguished members of the panel elaborate on what this
assessment entails, or qualified health plans, for example,
currently available that would be considered adequate for
children leaving CHIP?
Ms. Yocom. Yes. One of our more recent studies did take a
look in five states. We looked at benchmark plans which were
the basis for coverage under qualified health plans, and we
have some ongoing work as well right now. But essentially, we
did find that costs would be higher, in some cases,
particularly with vision and hearing services, that the
coverage under the benchmark plans was not as robust as what is
offered under CHIP.
Mr. Lance. Thank you. Others on the panel? Let me urge the
distinguished members of the panel to consider the situation
that was suggested by Chairman Emeritus Barton. The new
Congress may very well try to amend the Affordable Care Act in
significant ways. The President could sign that or veto that,
but regardless of our action or his action, it is my legal
judgment that the Supreme Court may rule as not consistent with
statutory law, current subsidies to the Federal Exchange. I
think it is an extremely important case, and I think the Court
could quite easily conclude that black letter law does not
permit subsidies to the Federal Exchange.
If that were to occur then the Affordable Care Act might
collapse under its own weight, and if that were to occur, then
Congress will certainly have to address the CHIP issue
separately and distinctly from the Affordable Care Act. And so
I would encourage the panel to consider what actions we should
take moving forward if that were to occur, and it is my legal
judgment that it might very well occur.
Do any of the members of the panel have initial thoughts on
what I am suggesting? Dr. Schwartz?
Ms. Schwartz. Only to say that to the extent that premium
subsides are not available, that obviously----
Mr. Lance. Yes.
Ms. Schwartz [continuing]. Changes the options for children
significantly.
Mr. Lance. Yes.
Ms. Schwartz. And so it is always a question of CHIP
relative to what, and so I think your point is well taken and
it is one that the Commission will be considering.
Mr. Lance. Thank you. There are pros and cons in having
CHIP folded into the ACA, I understand that, but CHIP predates
the ACA, there are many of us who support CHIP who certainly
are vigorously in opposition to the ACA, and I hope that we
cannot confuse the two or conflate the two. And the Supreme
Court has granted certiorari in this case, well, there will be
oral arguments in March, I suppose, and a decision by June, but
I would encourage all on the panel to consider what might occur
if what I suggest eventuates.
Thank you very much, Mr. Chairman.
Mr. Pitts. The chair thanks the gentleman.
That concludes this round of questioning. We will go to one
follow-up per side.
I will recognize myself 5 minutes for that purpose.
And let me continue on Mrs. Ellmers' question. She asked it
of GAO. Let me ask it of MACPAC. What many of the advocates and
public health groups are saying is that CHIP is a success today
under today's match rate. Can you confirm that if Congress were
to scrap the 23 percent increased FMAP in current law, and only
extend CHIP for 2 years, the CBO's current projections are that
extending CHIP for that time could save federal money, reduce
the deficit. Dr. Schwartz?
Ms. Schwartz. The savings do come from comparison to the
alternative. That is, as long as states are putting in more
money, the Federal Government is putting in less, and so yes,
that would potentially result in savings.
Mr. Pitts. All right, let me continue with you. States have
told us that under the MAGI, the Modified Adjusted Gross
Income, calculations, there are lottery winners currently
enrolled in Medicaid. In fact, in 2014, one state reported to
us that roughly one in four of their lottery winners were
enrolled in Medicaid, or had a family member in Medicaid. And
this includes at least one individual who won more than $25
million, but still was receiving Medicaid services. Since CHIP
uses MAGI calculations as well, is it possible that CHIP is
providing coverage for lottery winners?
Ms. Schwartz. I am not familiar with the specific cases
that you cite, but it would be my understanding that, to the
extent that lottery winnings are considered taxable income,
that they would be taken into account in a MAGI calculation.
Mr. Pitts. Ms. Yocom, would you respond to that question?
Ms. Yocom. Yes. I can't do much more than echo what Dr.
Schwartz just said. Yes.
Mr. Pitts. Anyone else? All right, that concludes my
questioning.
I will recognize the ranking member 5 minutes for a follow-
up.
Mr. Pallone. Dr. Schwartz, let me ask you, I want to follow
up on the earlier question relating to the transfer of children
from CHIP to Medicaid. As you know, the Early Periodic
Screening, Detection and Treatment benefit is available for all
children in Medicaid, but not necessarily in CHIP. Do you have
any estimate of the number of children of those 500,000
children who saw an improvement in coverage as a result, and do
you have any estimate of the number of children who now benefit
from reduced cost sharing as a result of the--that transfer?
Ms. Schwartz. That is a great question, but I don't think
we have the data to answer that question.
Mr. Pallone. So you think you could get back to us, or you
don't have sufficient data?
Ms. Schwartz. We would have to look at the states which
were transitioning kids, and we would have to look at the
difference between the benefit package in their CHIP program
versus the Medicaid program. I would be hesitant to say that we
could then say anything about their specific healthcare use,
and so we will look into what we can provide the committee.
Mr. Pallone. All right, I appreciate that. I just wanted to
mention, it is not a question, but I just wanted to mention
that in formal responses to the Energy and Commerce Committee
and the Senate Finance Committee, governors from 39 states
expressed support for CHIP, and urged Congress to extend the
program, and noted the role the program plays in providing
affordable and comprehensive coverage to children. On July 29,
the chairman and ranking members of both Energy and Commerce
and Senate Finance sent letters to all 50 governors asking for
their input to inform Congress' action on CHIP, and, yes, taken
together, the letters that we received from the governors
indicated support for extension of CHIP, and outlined a number
of suggestions for program improvements that could accompany
any funding reauthorization. And we do have that information on
the committee's Web site. So I did want to mention that, Mr.
Chairman.
And I yield back.
Mr. Pitts. Chair thanks the gentleman.
That concludes the questioning from the members. I am sure
we will have more we will submit to you in writing. We ask that
you please respond promptly. I remind Members that they have--I
am sorry? Did you have a follow-up? I am sorry.
Mr. Griffith. I had some clean-up questions, Mr. Chairman,
but it is up to you. I can submit them in writing or----
Mr. Pitts. Well----
Mr. Griffith [continuing]. However you want to do it.
Mr. Pitts. Yes. Do you object or--go ahead. Mr. Pallone
says it is all right.
Mr. Griffith. CBO's projections, Ms. Mitchell, reflect what
is effectively a grandfathered scoring provision, which assumes
a $5.7 billion expenditure on CHIP in the baseline each year,
however, since that is merely a budgetary assumption, is it
fair to say that in reality, any additional funding is new
funding which, if not offset, we probably ought to offset it,
but if not offset, would increase the deficit?
Ms. Mitchell. I am not sure that I can answer that
question.
Mr. Griffith. OK.
Ms. Mitchell. That gets into sort of CBO's score----
Mr. Griffith. But in basics, if you don't----
Ms. Mitchell [continuing]. Scoring----
Mr. Griffith. If you don't do an offset of something that
has been built into the base, if you don't do the offset then
you probably have an increase, wouldn't that be correct?
Ms. Mitchell. I think the $5.7 billion assumption in CBO
sort of complicates this a little bit, so I would defer to
them----
Mr. Griffith. OK.
Ms. Mitchell [continuing]. For sure.
Mr. Griffith. I appreciate that.
CHIP was designed for lower-income children, yet today,
some middle and even upper-middle-income families have members
with CHIP coverage. For example, I note that one state, some
enrollees are covered--the children are covered up to 350
percent of the federal poverty level. For a family of four, 350
percent is an income of $83,475, yet the median income in that
particular state is $71,637.
So the question becomes, in some states, is CHIP
subsidizing the upper-middle-class families in those particular
states? Yes, ma'am?
Ms. Baumrucker. I am happy to take that question. So again,
as a part of the CHIP Reauthorization Act of 2009, there were
provisions that were put into place, into current law, to
target the CHIP coverage to the Medicaid-eligible children
first, and then also to limit coverage above 300 percent of
federal poverty level by reducing the CHIP enhanced match rate
to the Medicaid federal matching rate for new states expanding
above that 300 percent level. So there was an attempt to ensure
that the CHIP dollars were being spent on the lower income--or
under 300 percent of FPL.
Mr. Griffith. And I guess where it gets confusing is the
different states have different levels because that number is
twice as much as the median income in my district, and so that
makes it--that 350 percent of federal poverty level is about
twice what the median household income is in my district.
MACPAC, if we find that we are subsidizing the middle-
class, do you all think that is appropriate?
Ms. Schwartz. The Commission hasn't taken up the question
of eligibility levels within Medicaid--I mean within CHIP. I
just would remind the committee that almost 90 percent of the
kids now covered by CHIP are below 200 percent of poverty.
Mr. Griffith. And obviously, that is a good thing and we
appreciate that.
Mr. Chairman, I appreciate your patience, and I yield back.
Mr. Pitts. Chair thanks the gentleman.
We have been joined by a gentleman from Texas, Mr. Green.
You are recognized 5 minutes for questions.
Mr. Green. Thank you, Mr. Chairman, and ranking member
for--and to our witnesses for testifying today.
CHIP has been a critical source of health insurance
coverage for millions of low- and moderate-income families who
cannot access affordable care for their children in the private
insurance market. Recent evaluations of CHIP reiterated what we
have long known; even when employer-sponsored insurance is
offered for children, the affordability of such plans is a
major barrier to many families. And I have a district that is
an example of that.
There are a number of ways Congress can help to include and
strengthen and improve CHIP and children's coverage. For
example, my colleague and I, Joe Barton, have legislation that
would provide for a 12-month continuous coverage under Medicaid
and SCHIP, because that would have that continuity. Most health
insurance policies are a yearlong. Hopefully, that would be
something we consider in the reauthorization.
People rarely lose their Medicaid and CHIP coverage because
they become long-term ineligible for the program. Instead,
people are often disenrolled due to bureaucratic problems or
short term changes in income that have no impact on their long-
term eligibility for Medicaid and SCHIP. This disrupts that
continuity of care, and creates a bureaucratic chaos for
hospitals and providers, and ends up costing the healthcare
system much more.
While that legislation focuses on people who are removed--
or lost their CHIP, the issue of churn exists between Medicaid,
SCHIP and the marketplaces. Due to the small changes in income,
an individual could switch from being eligible for Medicaid, to
being eligible for subsidized coverage in the exchanges.
Switching back and forth between insurance coverage can be
changing benefits, changing in participating providers,
pharmacies, changing out-of-pocket, not to mention
administrative paperwork for the state or the insurance
companies, and the doctor's office.
One program to help reduce that churn is the Transitional
Medical Assistance, or TMA. Dr. Schwartz, I understand that
MACPAC has recommended that Congress make TMA permanent, in
part because of the churn factor. Can you elaborate?
Ms. Schwartz. Yes. MACPAC has recommended making TMA
permanent, rather than having to consider it on an annual
basis. The Commission has also recommended and strongly
supports policies of 12-month continuous eligibility for both
children and adults as a way of minimizing disruptions in care,
and also minimizing the bureaucratic aspects of churn.
Mr. Green. OK. Some might say that we have exchanges, we do
not need the TMA. I don't believe that because, simply, in
Texas we don't have Medicaid expansion, which is, I think, a
majority of the states. Why would we still need TMA even with
the Affordable Care Act?
Ms. Schwartz. MACPAC has looked at that issue, and its
recommendation was to make TMA optional in those states that
have taken up the expansion for childless adults because that
serves to cover that population without having a TMA program.
Nonetheless, it stays relevant for those below the exchange
eligibility level.
Mr. Green. You know, the goal of the SCHIP program is to
get the most vulnerable population, and you are right, if a
state did expand it, they don't need Medicaid expansion plus
SCHIP, and they are not going to have two programs, but they
need to be in one or the other. That is important.
Ms. Yocom, in terms of physician access, I understand that
you and other researchers have reported that CHIP and Medicaid
enrollees experience similar challenges as individuals covered
by private insurance. Would you agree that issues with access
experienced by families with children in CHIP reflect broader
system-wide challenges, rather than problems with CHIP itself?
Ms. Yocom. There are certainly issues with access,
particularly with mental health, with dental care, and with
specialty services. I would agree that those issues that arise
in CHIP appear to be similar for the private sector, but more
intense for CHIP and for Medicaid.
Mr. Green. Ms. Schwartz, I only have a few seconds, but can
you discuss the issues that still need to be resolved with
regard to network adequacy and access to pediatric services and
qualified health plans?
Ms. Schwartz. Yes. This is an area which we are looking
into. There is an assumption that CHIP networks work best for
children because it is predominantly a child program. We
convened a roundtable earlier this week, bringing together
plans, providers, state officials, federal officials, and
beneficiaries, to kind of explore what some of the solutions
might be, and you will be hearing more about that from us in
the future.
Mr. Green. All right.
Mr. Chairman, thank you, and thank you again for having the
hearing.
Mr. Pitts. Certainly. Thank you.
That concludes the questions from the Members. As I said,
Members will have follow-up questions. We ask that you please
respond promptly. And I will remind Members that they have 10
business days to submit questions for the record, and Members
should submit their questions by the close of business on
Wednesday, December 17.
Thank you very much for being here, for your patience, for
all the good information. Look forward to working with you.
Without objection, the subcommittee is adjourned.
[Whereupon, at 12:13 p.m., the subcommittee was adjourned.]
[Material submitted for inclusion in the record follows:]
Prepared statement of Hon. Fred Upton
CHIP is an important program that provides health coverage
to children who might otherwise go uninsured and it has
historically enjoyed bipartisan support. I am especially proud
that because of this program, Michigan has one of the lowest
rates of uninsured children in the nation. But funding for CHIP
is set to end next year, and while I support extending that
funding, it is important that we address several questions
about the future of the program to ensure we continue to
provide care for the nation's most vulnerable kids.
Much has changed in health care since CHIP was created back
in 1997. While the rate of children without insurance has
declined, health care costs have continued to grow.
In its repeated reauthorizations, the CHIP program has
usually been extended in a bipartisan manner. Most recently,
however, the Children's Health Insurance Program
Reauthorization Act (CHIPRA) in 2009 and the Patient Protection
and Affordable Care Act in 2010 made significant changes to the
program. The president's health care law reauthorized CHIP
through FY2019, but only provided funding for the program
through September 30, 2015. This has effectively created a
funding cliff raising questions about the future of CHIP.
First, we must consider cost. It's important to understand
the cost of extending CHIP coverage and ensure that any
additional federal spending is fully offset. CHIP is a good
model of a program that provides coverage and flexibility while
also providing budget discipline. We need to ensure that this
remains the case.
Second, crowd-out must be considered. CHIP was designed to
provide coverage for lower-income Americans. There is a
legitimate policy concern that, if not properly focused, CHIP
coverage may unduly crowd-out private health coverage. It is
imperative that CHIP remain a program targeted to those who
need it most.
A third area of concern is coverage. My colleagues and I
who support extending CHIP funding do so because we believe in
high quality, affordable coverage. As Congress considers the
interactions between CHIP, employer-provided coverage,
Medicaid, and exchange coverage, we need to carefully examine
the benefits of different types of coverage. We need to examine
what we know about cost, quality, outcomes, access to care, and
other critical metrics.
Finally, we must consider the construction of the program.
One of the great benefits of the way the CHIP program is
designed is that it empowers states. We have heard recently
from governors all across the country about the successes of
the CHIP program. Michigan currently covers nearly 45,000
children and has provided services to over 300,000 since the
program's inception. The Director of Michigan's Department of
Community Health recently wrote, ``We believe the flexibilities
afforded by CHIP have contributed to our success.'' While
states need to be accountable for the federal dollars they
spend, we should maintain the CHIP program in a manner that
provides states like Michigan with appropriate tools to oversee
and operate their programs, enabling them to build upon past
success. This means policies that enhance program integrity,
state flexibility, and other factors should be a priority.
I want to thank the Congressional Research Service,
Government Accountability Office, and Medicaid and CHIP Payment
and Access Commission (MACPAC) for their testimony. I look
forward to working across the aisle to adopt common-sense
policies that keep the CHIP program strong for the future and
provide needed coverage to millions of kids.
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