[Senate Hearing 113-638]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 113-638

                THE CHILDREN'S HEALTH INSURANCE PROGRAM:
               PROTECTING AMERICA'S CHILDREN AND FAMILIES

=======================================================================

                                HEARING

                               before the

                      SUBCOMMITTEE ON HEALTH CARE

                                 of the

                          COMMITTEE ON FINANCE
                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS

                             SECOND SESSION

                               __________

                           SEPTEMBER 16, 2014

                               __________

                                     
                                     

            Printed for the use of the Committee on Finance



                                     ______
                                       
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                          COMMITTEE ON FINANCE

                      RON WYDEN, Oregon, Chairman

JOHN D. ROCKEFELLER IV, West         ORRIN G. HATCH, Utah
Virginia                             CHUCK GRASSLEY, Iowa
CHARLES E. SCHUMER, New York         MIKE CRAPO, Idaho
DEBBIE STABENOW, Michigan            PAT ROBERTS, Kansas
MARIA CANTWELL, Washington           MICHAEL B. ENZI, Wyoming
BILL NELSON, Florida                 JOHN CORNYN, Texas
ROBERT MENENDEZ, New Jersey          JOHN THUNE, South Dakota
THOMAS R. CARPER, Delaware           RICHARD BURR, North Carolina
BENJAMIN L. CARDIN, Maryland         JOHNNY ISAKSON, Georgia
SHERROD BROWN, Ohio                  ROB PORTMAN, Ohio
MICHAEL F. BENNET, Colorado          PATRICK J. TOOMEY, Pennsylvania
ROBERT P. CASEY, Jr., Pennsylvania
MARK R. WARNER, Virginia

                    Joshua Sheinkman, Staff Director

               Chris Campbell, Republican Staff Director

                                 ______

                      Subcommittee on Health Care

            JOHN D. ROCKEFELLER IV, West Virginia, Chairman

DEBBIE STABENOW, Michigan            PAT ROBERTS, Kansas
MARIA CANTWELL, Washington           ORRIN G. HATCH, Utah
BILL NELSON, Florida                 CHUCK GRASSLEY, Iowa
ROBERT MENENDEZ, New Jersey          MICHAEL B. ENZI, Wyoming
THOMAS R. CARPER, Delaware           JOHN CORNYN, Texas
BENJAMIN L. CARDIN, Maryland         RICHARD BURR, North Carolina
ROBERT P. CASEY, Jr., Pennsylvania   PATRICK J. TOOMEY, Pennsylvania

                                  (ii)
                                  
                                  
                            C O N T E N T S

                              ----------                              

                           OPENING STATEMENTS

                                                                   Page
Rockefeller, Hon. John D., IV, a U.S. Senator from West Virginia, 
  chairman, Subcommittee on Health Care, Committee on Finance....     1
Enzi, Hon. Michael B., a U.S. Senator from Wyoming...............     4
Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee 
  on Finance.....................................................     5
Brown, Hon. Sherrod, a U.S. Senator from Ohio....................     6
Casey, Hon. Robert P., Jr., a U.S. Senator from Pennsylvania.....     7
Schumer, Hon. Charles E., a U.S. Senator from New York...........     7
Menendez, Hon. Robert, a U.S. Senator from New Jersey............     8
Bennet, Hon. Michael F., a U.S. Senator from Colorado............     9
Portman, Hon. Rob, a U.S. Senator from Ohio......................     9

                               WITNESSES

Lesley, Bruce D., president, First Focus, Washington, DC.........     9
Perrin, James M., M.D., FAAP, president, American Academy of 
  Pediatrics, Elk Grove Village, IL..............................    12
Caldwell, Cathy, Director, Bureau of Children's Health Insurance, 
  Alabama Department of Public Health, Montgomery, AL............    14
Holtz-Eakin, Douglas, Ph.D., president, American Action Forum, 
  Washington, DC.................................................    15

               ALPHABETICAL LISTING AND APPENDIX MATERIAL

Bennet, Hon. Michael F.:
    Opening statement............................................     9
Brown, Hon. Sherrod:
    Opening statement............................................     6
Caldwell, Cathy:
    Testimony....................................................    14
    Prepared statement...........................................    35
    Responses to questions from subcommittee members.............    37
Casey, Hon. Robert P., Jr.:
    Opening statement............................................     7
Enzi, Hon. Michael B.:
    Opening statement............................................     4
    Prepared statement...........................................    39
Holtz-Eakin, Douglas, Ph.D.:
    Testimony....................................................    15
    Prepared statement...........................................    40
Lesley, Bruce D.:
    Testimony....................................................     9
    Prepared statement...........................................    47
    Responses to questions from subcommittee members.............    62
Menendez, Hon. Robert:
    Opening statement............................................     8
    ``The Way to Beat Poverty,'' by Nicholas Kristof and Sheryl 
      WuDunn, The New York Times, September 12, 2014.............    67
Perrin, James M., M.D., FAAP:
    Testimony....................................................    12
    Prepared statement...........................................    73
    Responses to questions from subcommittee members.............    77
Portman, Hon. Rob:
    Opening statement............................................     9
Rockefeller, Hon. John D., IV:
    Opening statement............................................     1
    Prepared statement...........................................    79
Schumer, Hon. Charles E.:
    Opening statement............................................     7
Wyden, Hon. Ron:
    Opening statement............................................     5

                             Communications

Academy of General Dentistry.....................................    81
Children's Hospital Association..................................    83
National Association of Pediatric Nurse Practitioners............    84

 
                    THE CHILDREN'S HEALTH INSURANCE

          PROGRAM: PROTECTING AMERICA'S CHILDREN AND FAMILIES

                              ----------                              


                      TUESDAY, SEPTEMBER 16, 2014

                               U.S. Senate,
                       Subcommittee on Health Care,
                                      Committee on Finance,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 2:54 p.m., 
in room SD-215, Dirksen Senate Office Building, Hon. John D. 
Rockefeller IV (chairman of the subcommittee) presiding.
    Present: Senators Wyden, Schumer, Stabenow, Menendez, 
Brown, Bennet, Casey, Enzi, and Portman.
    Also present: Democratic Staff: Anne Dwyer, Professional 
Staff; Elizabeth Jurinka, Chief Health Advisor; and Jocelyn 
Moore, Deputy Staff Director. Republican Staff: Becky Shipp, 
Health Policy Advisor.

   OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, A U.S. 
 SENATOR FROM WEST VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON HEALTH 
                   CARE, COMMITTEE ON FINANCE

    Senator Rockefeller. Good afternoon. My apologies for being 
late. There was a long discussion at caucus, several votes, and 
the discussions were important, actually. I will make my 
opening statement. I am very grateful to Senator Enzi for being 
here. He cannot stay a long time, but he is here, and that 
counts.
    I have been on this Finance Committee for a long time, and 
I have chaired this subcommittee for a very long time. I really 
do not remember ever having had a meeting of it before. The 
previous chairman had a different philosophy than the present 
chairman, who likes his subcommittees to be active. This, I 
have to say without sentiment, will be the last Health 
Subcommittee hearing that I chair. The first and the last. I 
think that has a certain panache. [Laughter.] I could not think 
of anything more important than doing it on the Children's 
Health Insurance Program.
    The year 2014 marks the 17th anniversary of one of the most 
successful programs for improving children's health care in the 
United States, which is the CHIP program. It is a marvel. Eight 
million American children and families look to CHIP for 
comprehensive and affordable health care coverage, including 
40,000 children from my own State in West Virginia. I am not 
sure about Wyoming and Ohio. Wyoming would have lower numbers. 
Ohio would have higher numbers.
    CHIP's success has played an essential role in cutting the 
number of uninsured children in half over the last 14 years, 
from about 14 percent to about 7 percent. That was as of 2 
years ago. This kind of progress is something we should 
celebrate. We must continue to invest in CHIP so that we can 
celebrate many more of the program's milestones.
    In 1997, Senators Kennedy and Hatch and I spent countless 
hours discussing how we could increase health care access for 
children in a way that members of both political parties could 
support, not only to pass the program, but to sustain it, to 
keep it going, which is what we are trying to do now. Creating 
this program has been one of the most meaningful things I have 
done in my career in public service. I just flat out say that. 
If you are helping 8 million children all across the country, 
how can that not be important? How can that not be important?
    So, without congressional action, I say again, CHIP will 
run out of funding next fall, placing at risk the well-being of 
hundreds of thousands of children and pregnant women. I hope 
that the members of this subcommittee will not let that happen.
    It is an interesting program, because the Governors, both 
Democratic and Republican, tend to like it because there is a 
lot of flexibility in the way they can allocate funds and work 
with the way it is carried out. So I do not think there are a 
lot of Republican Governors who are against it. I do not think 
there are many Democratic Governors who are against it. In this 
case, since so much rests with the States, I think that is 
important for our decision-making.
    But, it will run out of funding next fall. CHIP is a game 
changer for millions of children. No other form of coverage 
provides the same level of specific and comprehensive pediatric 
networks at an affordable cost for working families.
    The challenges that many children face are too similar to 
the ones I first saw when I was a VISTA volunteer in Emmons, 
WV, nearly 150 years ago. [Laughter.] Every sight I saw there, 
Chairman Wyden, has stayed with me--every sight I saw there. 
Like when we went to Sago. I remember the look in your eyes as 
you listened to those families. Experiences like that make for 
lifetime commitments.
    When I first arrived as a VISTA volunteer in Emmons, there 
were children in the town and across the State who had never 
seen a doctor because their families simply did not have the 
money to cover the cost of a physician visit or dental care. 
Dental care was out of the question. The wonderful thing about 
CHIP, generally speaking, is its coverage is better than that 
in the Affordable Care Act, which I do not like to say, but I 
have to in order to be honest. I thought then to myself, as I 
still do now, that no parent should have to carry the stresses 
of knowing that you cannot afford care for your children if 
something goes terribly wrong, and something goes terribly 
wrong very often with children in these rural areas and poor 
areas, which my State basically is.
    I am proud to say that ever since CHIP's inception, the 
program has consistently enjoyed strong bipartisan support. One 
member of the Finance Committee, Senator Hatch, has remained a 
steadfast champion of CHIP from the very beginning. We have 
shared a goal of making certain that every child in America 
gets a fair shot at a healthy start in life. While we have not 
always agreed on every provision in the CHIP program, I have 
always appreciated Senator Hatch's strong, fundamental 
commitment to it.
    For as long as I can recall, Congress has been able to, Mr. 
Chairman----
    Senator Wyden. You are Mr. Chairman.
    Senator Rockefeller. I am glad you are here, very glad.
    Congress has been able to put aside its differences and 
come together when it was called upon to do what is right for 
American children. That time has come again, otherwise we will 
run out of money, and we will put the States into total 
disruption if they are not able to plan. You are going to help 
us understand that.
    CHIP is currently at a crossroads. Funding for CHIP must be 
reauthorized soon, otherwise the program as we know it will 
come to an end, and as many as 2 million children could lose 
their coverage. This would threaten their health and their 
well-being, not to mention the significant gains that we have 
made over the past 17 years to reduce the number of uninsured 
children in this country. We simply cannot afford to take this 
major step backwards and jeopardize the future of generations 
by allowing CHIP to expire. We cannot do it. We just cannot do 
it.
    If it was a matter of high controversy, that would be one 
thing--Republicans and Democrats clawing at each other's 
eyeballs, et cetera--but that is not the case. It just is not 
the case on this one. We do coalesce around children. This is a 
good bill. It has helped. It has done even what the Affordable 
Care Act has not been able to do.
    A recent study by Wakely Consulting Group demonstrated that 
moving children into other forms of private insurance would 
cause a tenfold increase in out-of-pocket spending for CHIP 
families who cannot afford that. We just cannot have that. It 
is not right to shift the added financial burdens onto working 
families when a cost-
effective solution for maintaining the coverage they already 
have exists.
    Although funding for CHIP expires in 2015, the program is 
authorized through 2019. Now that is one of those anomalies 
that we produce sometimes in Congress. It usually helps, but if 
it does not, it is really bad. In other words, it is wonderful 
if the program is authorized, but it does not mean much if the 
money is not there. So, although the funding for CHIP expires 
in 2015, the program is authorized through 2019, which 
therefore could lead to significant disruption to State 
governments, private health plans, hospitals, and numerous 
other stakeholders, in addition to the families whose children 
are enrolled in the program. States have been budgeting and 
planning under the assumption that Congress would extend 
funding for another 4 years. They simply are not prepared to 
rapidly develop and implement plans to transition millions of 
children into other forms of coverage. In short, State 
legislatures and budget officials are relying on us to act now.
    Colleagues, let us do our job. Let us show the American 
people that we can work together, that we can do something 
good. With that, I lay my case on the mercy of the 
subcommittee, the full committee, and the Congress.
    [The prepared statement of Senator Rockefeller appears in 
the appendix.]
    Senator Rockefeller. Senator Enzi?

          OPENING STATEMENT OF HON. MICHAEL B. ENZI, 
                  A U.S. SENATOR FROM WYOMING

    Senator Enzi. Thank you, Mr. Chairman. I want to thank you 
for holding this hearing on a very important issue in health 
care. We may not always agree on every health care bill that 
comes before us, but we certainly can agree that the health of 
our young people is vitally important to our health as a 
Nation. You have made children's health the cornerstone of your 
career in the Senate, and I applaud you for your effort in 
raising the profile of this issue. I hope that your last 
hearing is your most productive hearing. [Laughter.]
    I want to reiterate again, you mentioned that the 
Children's Health Insurance Program, CHIP, has been extended 
through 2019, but the funding only through September 30, 2015. 
So this hearing is intended to focus on the fact that the 
program funding will expire and needs extension.
    We will draw attention to the administrative burden on 
States and the logistics and planning that require action 
sooner rather than later. I am pleased that we have such a 
distinguished panel to do that. The CHIP program is a valuable 
option for children who need health insurance, and I would like 
us to focus more on the core mission of the program in a way 
that builds on the good that many States are doing and which 
serves the population that truly needs help.
    Wyoming's Kid Care CHIP is an example of targeting kids who 
are really in need and building a program that leverages the 
best of the public and private sectors to get children who do 
not have any other options the coverage that they need. That 
program is doing well, partly because of the flexibility that 
is allowed under this.
    In 2003, Wyoming formed a public/private partnership with 
Blue Cross Blue Shield of Wyoming and Delta Dental of Wyoming 
to provide the health, vision, and dental benefits in Wyoming. 
All children enrolled in the program will receive a wide range 
of benefits including inpatient and outpatient hospital 
services, lab and 
x-ray services, prescription drugs, mental health and substance 
abuse services, durable medical equipment, physical therapy, 
dental, and vision services. The families do share in the cost 
of their children's health by paying copayments for a portion 
of the care that is provided.
    I am hopeful that we can have a very positive dialogue 
about the path forward for CHIP. I think one of the greatest 
things that this program has is the flexibility. I hope that we 
continue that. We need to focus our efforts here on identifying 
the core mission of the program in a way that builds on the 
good work that many States are doing and what serves this 
population that truly needs help.
    I appreciate the testimony of the people who are here. I 
have read through that and am impressed, and I hope that you 
will allow us to submit some questions when we cannot be here 
so that we can get additional information to get this right. So 
again, I thank you for holding this hearing.
    Senator Rockefeller. I thank you, sir.
    [The prepared statement of Senator Enzi appears in the 
appendix.]
    Senator Rockefeller. The chairman of the full committee, 
Senator Wyden.

   OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR FROM 
             OREGON, CHAIRMAN, COMMITTEE ON FINANCE

    Senator Wyden. Chairman Rockefeller, thank you very much 
for doing this. I want to commend you and Senator Enzi for 
bringing us together to talk about this important program. 
Colleagues, I think it is worth noting that, at a time of 
extraordinary dysfunction and polarization here in Washington, 
this is a program where there is a consensus that it genuinely 
helps people in need, and particularly our vulnerable children.
    This is medical care. It is dental care to millions of kids 
nationwide who otherwise, without CHIP, would be falling 
between the cracks. In particular, it has reduced disparities 
in health coverage for economically vulnerable Americans.
    I just want to take a couple of minutes to note how we have 
arrived at this point, because you do not see a consensus built 
for an incredibly important program for vulnerable people by 
osmosis. It just does not happen that way. This program has 
come together because of the extraordinary leadership of 
Chairman Rockefeller. We certainly had Senator Hatch all of 
these years, and he was in your corner, Chairman Rockefeller, 
but make no mistake about it: this has come about because a 
humble person who has been relentless, relentless in his 
admirable desire to stand up for those in need, said he was 
going to go to bat for this program every step of the way, and 
that is why this program is on the books, Chairman Rockefeller. 
This is a particularly meaningful day, and we are going to have 
other times, colleagues, to talk about the great contributions 
of Chairman Rockefeller, what he has done to protect the 
retirement security for miners. I sat next to him, have for 
years, in the Intelligence Committee. None of you can know that 
because that is kind of classified. [Laughter.]
    He did extraordinary work on cyber-security back when I had 
a full head of hair and rugged good looks and was director of 
the Gray Panthers. We passed petitions, actually, for work that 
Chairman Rockefeller did for seniors in terms of home health 
care.
    We take a few minutes today to recognize what he has done 
for those who are vulnerable, and that legacy is going to 
continue. That legacy is going to continue in the days and 
years ahead, that legacy of grace, tenacity, and particularly 
making sure that, every time debates are conducted here in the 
Finance Committee and in Washington, DC, those without power, 
those without clout, those without political action committees, 
have a big voice. That is what Chairman Rockefeller's legacy is 
all about, standing up for those people.
    I am going to have a chance to talk about other aspects of 
his career. I am particularly pleased that he is the leader of 
the Tall Senator's Caucus. [Laughter.] That is kind of 
meaningful to me, and I want to note one other point before I 
wrap up, and that is Chairman Rockefeller's selfless decision 
to decline the opportunity to chair the full Finance Committee, 
which allowed me to accept this position and the responsibility 
that goes with it. We all understand that Chairman Rockefeller 
would have been a superb chairman of the Finance Committee. I 
just want you and colleagues here to know that my gratitude for 
that selfless act, Chairman Rockefeller, is profound.
    My goal here in the Senate Finance Committee is going to be 
to try to live up to the standards that you have set during 
your time in public service. Thank you.
    Senator Rockefeller. That is pretty nice. [Laughter.]
    Actually, I was really happy as the chairman of the 
Commerce Committee. I am really happy that you are here.
    Senator Brown?

           OPENING STATEMENT OF HON. SHERROD BROWN, 
                    A U.S. SENATOR FROM OHIO

    Senator Brown. Thank you, Mr. Chairman. I appreciate the 
chance to say a couple of words, first about you and second 
about this issue which is so very important. I do not speak for 
others, but I know that others agree with this, that Senator 
Rockefeller has been a friend and a mentor to me. He has taught 
me a great deal about translating human need into action in 
what this committee has done.
    I am a relatively new member of this committee. I have been 
on--as has Senator Casey--for less than 2 years. I welcome the 
chance to help in a leadership role to build on the legacy of 
Medicaid and on CHIP that Senator Rockefeller has established 
in more than 2 decades on this committee. The work he has done, 
I followed that when I was in the House, saw what he did, and 
then got to work up close with him.
    My State's CHIP program, fortunately for us I guess, is an 
extension of Medicaid. Kids will continue to receive coverage 
if funding is not authorized. We also know, though, that that 
means significant budget cuts. The type of cut is more cost-
shifting to the States.
    One thing I think we have learned is, we cannot keep doing 
that with Medicaid. We have also learned that Medicaid payment 
equity expires at the end of the year. We have made some 
progress in leveling the field between Medicaid and Medicare 
payment. That is something we need to continue. I think there 
is bipartisan support, too, for that.
    Most importantly, Senator Rockefeller, thanks for making a 
difference in the lives of a lot of children on the other side 
of the Ohio River, on the north side, in addition to the south 
side of the Ohio River. Thank you.
    Senator Rockefeller. Thank you, Senator Brown. My only 
regret is that West Virginia owns the Ohio River. [Laughter.]
    Senator Brown. Which is actually true.
    Senator Rockefeller. Yes. I built eight bridges across, but 
you guys just put up about 20 cents.
    Senator Brown. Right.
    Senator Rockefeller. We had to carry the whole load.
    Senator Brown. I just think if you have a Rockefeller and a 
Brown, that Rockefeller puts up 80, Brown puts up 20. 
[Laughter.]
    Senator Schumer. Let us have no class warfare here, 
Sherrod.
    Senator Rockefeller. That is right. Logic rules.
    Okay. Senator Casey?

        OPENING STATEMENT OF HON. ROBERT P. CASEY, JR., 
                A U.S. SENATOR FROM PENNSYLVANIA

    Senator Casey. Mr. Chairman, thank you very much. I would 
want to incorporate by reference much of what Chairman Wyden 
said, as well as Senator Brown, in their praise of your public 
service and also your work for children.
    There is an old expression about being summoned to give 
testimony at some point in our lives, and whenever Jay 
Rockefeller has been summoned to give testimony, it was almost 
in every case about kids, fighting and fighting and fighting on 
their behalf and, as Senator Brown mentioned, the Children's 
Health Insurance Program as well as Medicaid, two vitally 
important programs.
    The chairman served as Governor. I want to mention another 
Governor, my father. After losing three times for that office, 
on his fourth try he won, and Pennsylvania was one of the first 
States to enact a Children's Health Insurance Program that 
became the national model, which you led with your colleagues.
    I think, Mr. Chairman, we will have longer statements for 
the record about the benefits of CHIP. Let me just read you 
this, then I will conclude. This is from one of the families 
giving their own testimony about CHIP. ``The CHIP Program has 
been great. We know that there is quality insurance, and we are 
finally able to sleep at night knowing that our kids can be 
seen by excellent pediatricians. I do not know what we would 
have done without CHIP. Now my children can play sports and go 
away to camp like other kids, and, if they get hurt, CHIP is 
there for them.''
    I could not, if I had an hour, say it better than that. 
That testimony is evidence of the benefit of the program, but 
also I think it is proof positive of your achievements in 
public service, especially for our kids.
    Thank you very much.
    Senator Rockefeller. Thank you, Senator Casey. Senator 
Portman was here, and I am glad he was, because he is for this.
    And now, Senator Schumer, if you can overcome your shyness, 
sir, you are on.

         OPENING STATEMENT OF HON. CHARLES E. SCHUMER, 
                  A U.S. SENATOR FROM NEW YORK

    Senator Schumer. Unaccustomed as I am to public speaking--
--[Laughter.]
    We could use a lot of nice adjectives for our dear friend 
Jay, whom we are so sorely going to miss. But let me just read 
you one sentence that would be greater testimony to him from my 
State of New York than all of the adjectives in the world.
    When CHIP was enacted, New York had over 800,000 uninsured 
children. Today that number has decreased by 90 percent--what a 
legacy--all because of one person, Jay Rockefeller. His 
passion, his strength, and his caring have just been amazing. 
They have been an inspiration, I think, to many of us here in 
the Senate. Whether we had to fight the fights on the health 
care bill or in the CHIP program or throughout the 
appropriations process, there was no voice that was stronger or 
more effective than Jay Rockefeller's on behalf of kids and all 
of the voiceless in this country.
    Just on a more serious note, as Sherrod was saying, that 
somebody who came from a background of plenty could care so 
much for the people who had nothing and then accomplish so 
much, is still a testament to the greatness of America. So 
anyone who doubts the future of this country, look at the 
biography and accomplishments of Jay Rockefeller, and you will 
feel really good about the United States of America and about 
him. Thank you.
    Senator Rockefeller. I am getting confused here. I am not 
going to break out into tears because I do not do that, but I 
really thought this was a hearing about CHIP. [Laughter.]
    Senator Schumer. CHIP equals Rockefeller.
    Senator Rockefeller. All right. If I am going to hand out 
chances for punishment, I should certainly recognize Senator 
Menendez.

          OPENING STATEMENT OF HON. ROBERT MENENDEZ, 
                 A U.S. SENATOR FROM NEW JERSEY

    Senator Menendez. Well, thank you, Mr. Chairman. I am going 
to be brief, but I hope that in your modesty you will not 
continue to use humor to deflect the praise that is coming your 
way.
    I think that if I would sum up the lifetime of work that 
you have led here in the Senate, it is as a champion of 
children--children in the CHIP program, children in poverty, 
children in foster care. The people and the children of West 
Virginia, and for that matter, the children of the Nation 
including my home State of New Jersey, are better off because 
of Jay Rockefeller and his mission in life to help, as Senator 
Schumer said, the most vulnerable.
    Nearly a generation now of children have received the 
benefits of your leadership as a result of what you have done 
in CHIP. Your landmark study in 1991 opened the floodgates to a 
lot of these initiatives. That is a tremendous testament. As 
the only Hispanic on this committee, I want to also say that 
immigrant children have benefitted as a result of your resolve 
to make sure that all children are included in the benefits of 
CHIP and other programs.
    Jay, we have a great admiration for you. The best way we 
can show that admiration is to continue that legacy as we 
continue to reauthorize CHIP and these other critical programs 
so that future generations of children in West Virginia and 
throughout the country will continue to receive the benefits of 
what you have ultimately achieved for them and for our country.
    I have specific questions when we have the witnesses finish 
their testimony, but I did not want to lose this opportunity to 
join my colleagues in echoing their sentiments.
    Senator Rockefeller. You are a kind man, and I appreciate 
you. You all are.
    Senator Bennet?

         OPENING STATEMENT OF HON. MICHAEL F. BENNET, 
                  A U.S. SENATOR FROM COLORADO

    Senator Bennet. Thank you, Mr. Chairman. If I could, I 
would like to take just one minute also to say how grateful I 
am for your leadership on these issues. I came here having 
spent almost 5 years of my life being Superintendent of Denver 
public schools, wondering who in Washington cared about the 
kids in that school district. I never had any doubt that you 
did, and my time here has only reaffirmed that.
    The New York Times columnist, David Brooks, wrote in a 
different context not that long ago that the future has no 
lobby in Washington, DC. I think that is a huge part of the 
problem we have in this city, but he was not exactly right, 
because the future had a huge lobby in you. I think it is 
incumbent on all of us in this committee to carry on that work.
    So, thank you for everything that you have done, Mr. 
Chairman.
    Senator Rockefeller. Thank you, Senator Bennet, very much. 
Is it all right if I go to the witnesses? [Laughter.]
    Senator Wyden. I think Senator Portman just joined us.
    Senator Rockefeller. Senator Portman, thank you for being 
here, sir.
    Senator Portman. I was here earlier, Mr. Chairman, so I got 
to hear your opening remarks.
    Senator Rockefeller. I know. I saw you.
    Senator Portman. That is what I really came for. Forget the 
witnesses--no. Thank you all for being here. [Laughter.]

            OPENING STATEMENT OF HON. ROB PORTMAN, 
                    A U.S. SENATOR FROM OHIO

    Senator Portman. A toast to you from our United States 
Senate bottled water. I enjoyed being a colleague and a friend, 
and I appreciate your willingness to spend so much of your 
career focused on this issue of children's health and other 
important matters, important to West Virginia and to our 
country.
    As you know, you are a neighbor, and so I look forward to 
staying in touch and look forward to the testimony today, and 
the opportunity to have this be your final hearing on a topic 
that is a passion of yours and one that is incredibly important 
for all of our States. Thank you, Mr. Chairman.
    Senator Rockefeller. Thank you, Senator Portman. You are 
kind. You are very kind.
    Now we are going to turn to the witnesses. We have a very 
good panel.
    First, we have Mr. Bruce Lesley. Mr. Lesley is the 
president of First Focus, which is a bipartisan advocacy 
organization dedicated to making children and families a 
priority in Federal policy. Well actually, we will just go 
right to you.

           STATEMENT OF BRUCE D. LESLEY, PRESIDENT, 
                  FIRST FOCUS, WASHINGTON, DC

    Mr. Lesley. Thank you, Chairman Rockefeller, Chairman 
Wyden, and Senators Enzi, Brown, Casey, Menendez, Schumer, 
Portman, and Bennet, for having this hearing today about the 
Children's Health Insurance Program and the positive impact it 
has had on the lives of millions of children across the 
country. I would like to start by recognizing Chairman 
Rockefeller for his lifelong achievements in championing an 
array of issues that have been critically important to the 
children of West Virginia and this entire country, including 
his legacy with respect to CHIP.
    Mr. Chairman, as you know, CHIP has been an undeniable 
bipartisan success story. As those of us who worked on the 
issue back in 1997 can attest, the lack of health insurance 
coverage among children was a national tragedy. In fact, one in 
seven of our Nation's children had no health insurance 
coverage.
    As the National Commission on Children--which was chaired 
by Senator Rockefeller--found in 1991, perhaps no set of issues 
moved members of the National Commission on Children more than 
the wrenching consequences of poor health and limited access to 
medical care. If this Nation is to succeed in protecting 
children's health, there must be a major commitment from 
families, communities, health care providers, employers, and 
government to meet children's basic health needs and to ensure 
that all pregnant women and children have access to health 
care.
    Mr. Chairman, that commitment to protecting the health of 
our Nation's children was answered by Congress in your work in 
a bipartisan manner with the passage of CHIP in 1997. Through 
the leadership of the Senate and this committee, CHIP was 
created toward the goal of dramatically cutting the number of 
uninsured children in America.
    On that measure, if you look at Figure 1 on page 3 of my 
testimony, as those numbers indicate, CHIP has been an 
incredible success story, as the uninsured rate for our 
Nation's children has been cut in half--from 14 percent in 1997 
to just 7 percent in 2012--while the uninsured rates for adults 
during that period increased.
    In addition to the fact that CHIP is a national success 
story, it is also bipartisan. One of the hallmarks of CHIP has 
been the willingness of leaders on both sides of the aisle--you 
noted this in your work with Senators Hatch, Kennedy, Grassley, 
and others on this committee--to work together to increase the 
enrollment of children.
    CHIP is also a public/private partnership. CHIP gives 
States discretion in working with their providers and insurance 
plans to set premiums, cost-sharing benefits, income 
eligibility levels, and provider networks for children and 
pregnant women, rather than having a one-size-fits-all Federal 
standard.
    CHIP is also child-focused. By definition, CHIP is child-
focused, and that has been a critical factor in its success for 
children. CHIP provider networks have been built and improved 
over the 17 years of its history in every single State, and 
they meet specific pediatric quality standards that address the 
unique development and health care needs of children.
    CHIP has also been successful in reducing health 
disparities. In addition to the coverage improvements, a study 
published by the National Institutes of Health found that CHIP 
coverage has been critically important and successful in 
reducing disparities in access to care measures and quality of 
care.
    CHIP is also overwhelmingly popular with the American 
people. In poll after poll, CHIP has remained popular with the 
public. The American Viewpoint Poll this past May found that 
voters support extending CHIP by a wide margin of 74 to 14 
percent, and by more than a 3\1/2\ to 1 margin even among Tea 
Party supporters. No matter the political, ethnic, gender, age, 
or geographic breakdown, CHIP is overwhelmingly popular.
    Unfortunately, CHIP's 8 million children are at risk. 
Although CHIP celebrates its 17th birthday this year and has 
achieved a remarkable record of success, funding for the 
program expires on September 30, 2015, and there is some 
urgency to addressing this issue as soon as possible, because 
States are beginning their budget preparations now and are 
facing uncertainty about how to handle CHIP beginning in 
October 2015.
    The consequences of CHIP expiring would spell disaster for 
more than 8 million children. The reasons are, first, due to 
what is referred to as the kid glitch in the Affordable Care 
Act or ACA. It is estimated that up to 2 million children could 
lose coverage entirely if CHIP were to expire. Second, as a 
recent First Focus study highlights, rural children will be at 
the greatest risk if CHIP expires, because children in rural 
communities would disproportionately lose their health 
coverage. Last, even for the children who would be able to 
transition to the Affordable Care Act exchange plans or 
marketplace, a report by Wakely Consulting Group found that 
children in every single State would be left with fewer 
benefits and far-higher cost sharing if they lost CHIP 
coverage.
    Therefore, we urge Congress to, first and foremost, adopt a 
4-year extension of CHIP funding through 2019. This would 
rightfully align the funding with the program's reauthorization 
date. We urge the Congress to pass such an extension during the 
lame duck session, as there is some urgency to this.
    In addition, we would urge the extension of outreach and 
enrollment grants, the pediatric quality standards, and Express 
Lane Eligibility, which expires in March 2015, so that we 
continue to make progress toward the goal of covering all 
children.
    In closing, I would like to, once again, thank Chairman 
Rockefeller and the members of this committee for holding this 
important hearing about children's health. This committee has 
always provided the leadership on CHIP, and we look forward to 
working with you toward its extension.
    I would also like to personally recognize and thank 
Chairman Rockefeller--during my time on this committee, my 12 
years on the Hill, 10 years in the Senate--for his outstanding 
career as a champion for our Nation's most vulnerable citizens, 
its children. We appreciate all that you have done over the 
years for kids. Thank you very much.
    Senator Rockefeller. Thank you, sir, very, very much.
    [The prepared statement of Mr. Lesley appears in the 
appendix.]
    Senator Rockefeller. Dr. James Perrin is a primary care 
pediatrician and president of the American Academy of 
Pediatrics. In addition to being a lifelong advocate for 
improving children's health, he is a former professor of 
pediatrics at Harvard and director of the division of 
pediatrics at Massachusetts General Hospital.
    We welcome you, sir.

 STATEMENT OF JAMES M. PERRIN, M.D., FAAP, PRESIDENT, AMERICAN 
          ACADEMY OF PEDIATRICS, ELK GROVE VILLAGE, IL

    Dr. Perrin. Thank you, Senator Rockefeller. I am Jim 
Perrin, and I join you today on behalf of the 62,000 primary 
care pediatricians, pediatric subspecialists, and pediatric 
surgeons at the Academy of Pediatrics. I am in Massachusetts 
and currently president of the Academy.
    Let me start by thanking you and your colleagues here for 
the opportunity to testify before the subcommittee regarding 
the CHIP program. Strongly bipartisan in its beginning and 
strongly bipartisan today, CHIP has developed into a critical 
program that finances health coverage for over 8 million 
children across the country and has improved three important 
aspects of children's health. One is access to coverage, second 
is utilization of those services, and third is the population 
health of millions of children who have benefitted from this 
program.
    Coverage is important for a number of reasons, and I think 
we know that. Uninsured children are three times more likely 
than children with insurance to lack access to needed 
medications and five times more likely to have an unmet need 
for medical care. And a just-released report from the CDC shows 
that uninsured children receive substantially lower rates of 
preventative services.
    We all know that children are different from adults, and 
the needs of children--in the sense of their health care needs, 
in the context of their developmental needs over time, the 
changing manifestations of disease at different times in the 
child's life, and the different response to treatments--all 
require children-specific kinds of benefits. That is exactly 
what the Children's Health Insurance Program has provided to 
us.
    Most children are healthy, so the epidemiology of pediatric 
disease really does differ from that of the adult population. 
Care for all children is marked by adequate immunization and 
other preventative services. Pediatricians really think 
prevention is a critical aspect of what we do. Nevertheless, we 
also have large and increasing numbers of children with chronic 
health conditions that affect their health and development and 
require specific care to generate, maintain, and restore age-
appropriate functioning to maximize their potential--another 
area of prevention that is incredibly important.
    Children also are different because they represent the most 
economically, ethnically, and racially diverse population in 
the United States, with very high rates of childhood poverty. 
The resulting health care disparities that relate to poverty 
really increase the risk of adverse outcomes. So these 
differences between children and adults require distinct and 
specific services for infants, children, and adolescents that 
do emphasize the preventative notion.
    Now, we have not achieved coverage of these services for 
every child in the United States, but we should all be proud 
and thankful for the vast strides we have made since SCHIP was 
established, as Bruce just reminded us. Today CHIP is critical 
in helping to ensure that no child falls through the cracks and 
that the vast majority of U.S. children have access to high-
quality affordable health insurance. In fact, even with 
persistent poverty among children, since SCHIP's enactment in 
1997, the number of uninsured children has been cut in half 
while, on the other hand, the number of uninsured adults rose 
significantly.
    So the reauthorization in 2009 included several 
improvements, such as better age-appropriate health benefits; 
coverage of dental, mental health, and substance abuse services 
to the same extent as medical and surgical treatments; and a 
strong Federal investment for the first time ever in children's 
health care quality improvement.
    The Academy urges Congress to fully fund CHIP through at 
least 2019, and to do so during this Congress, for a host of 
reasons. Pediatricians are intimately familiar. We work closely 
with our friends in Alabama, for example, with the interaction 
between the Federal and State Governments related to Medicaid 
and CHIP.
    States, in particular, need the time to plan and to have an 
understanding of what the Federal Government will do in order 
to make wise budgetary decisions. Children and families need 
the stability that a medical home offers, consistent rules 
regarding what their insurance covers and the managed care 
company with which they will interact, and the peace of mind, 
which we heard about earlier, that quality, affordable health 
care offers. Pediatricians need to know that they will be able 
to operate their practices with a reliable payer as well, so 
that they can keep the medical home open to as many publically 
insured families as possible.
    CHIP has made important contributions to the advancement of 
health care delivery to near-poor children in recent years and 
has the potential to accomplish more in the years to come. The 
Academy specifically offers the following recommendations to 
strengthen the CHIP program for children: first, to fully fund 
the program through 2019; to expand awareness of CHIP among 
eligible families (and indeed, the movement towards exchange 
plans has helped enroll people in CHIP, which we are very 
excited about); to facilitate enrollment in CHIP for eligible 
children; to maximize comprehensive coverage and affordability 
for children whose care is financed by CHIP; to enhance and 
continue the very important quality measurement funding and 
quality improvement funding in the CHIPRA Act; and to ensure 
adequate payment for physicians who care for CHIP patients.
    Children and pediatricians owe tremendous thanks to you, 
Chairman Rockefeller, to Senator Hatch, Senator Wyden, Senator 
Roberts, and the other Senators who are here and have been here 
today, for your bipartisan leadership and working to keep CHIP 
strong for children. America's pediatricians urge Congress to 
support your efforts and others in Congress to continue CHIP's 
success for at least 4 more years.
    Thank you very much.
    Senator Rockefeller. Thank you, sir, very much.
    [The prepared statement of Dr. Perrin appears in the 
appendix.]
    Senator Rockefeller. Ms. Cathy Caldwell is the Director of 
the Bureau of Children's Health Insurance in the State of 
Alabama at its Department of Public Health.
    You head up the CHIP program, All Kids. I think that is 
what it is called. It provides coverage to about 85,000 
children. I am interested in what you have to say, and I will 
have follow-up questions as to the disruption in State 
government and planning, generally.
    We welcome you here very much.

  STATEMENT OF CATHY CALDWELL, DIRECTOR, BUREAU OF CHILDREN'S 
    HEALTH INSURANCE, ALABAMA DEPARTMENT OF PUBLIC HEALTH, 
                         MONTGOMERY, AL

    Ms. Caldwell. Chairman Rockefeller, Chairman Wyden, Ranking 
Member Roberts, Ranking Member Hatch, Senator Enzi, and 
distinguished members of the committee, I thank you for 
allowing me to speak.
    In Alabama, more than 82,000 children are currently 
enrolled in CHIP. More than 56,000 are enrolled in All Kids, 
which is a separate, stand-alone program, and 26,000 enrollees 
receive services through the Medicaid program. I am here to ask 
you to extend CHIP funding beyond fiscal year 2015. Extension 
is critically needed to continue providing quality care for our 
children.
    CHIP is a successful program. For example, 90 percent of 
our enrollees have at least one visit with a primary-care 
physician annually, and our immunization rate for 2-year-olds 
exceeds 70 percent. We encourage families to seek preventive 
care over emergency care, and we have seen success. For 
instance, only 10 percent of our enrollees with asthma have an 
asthma-related trip to the emergency room, and more than 80 
percent of our enrollees with diabetes have an annual A1c test. 
We provide an enhanced, child-based dental benefit, and more 
than 60 percent of our enrollees receive a dental visit within 
90 days of enrollment.
    We also take care of very sick children. Last year alone, 
we provided coverage to 33 children who have leukemia. In May, 
we covered a sound processor for a cochlear implant for a 14-
year-old boy with hearing loss, allowing him to hear clearly. 
In June, we enrolled a 7-year-old uninsured child hospitalized 
with pneumonia, and we enrolled a 13-year-old uninsured girl 
with cystic fibrosis who had not been able to buy her 
medication.
    These stories are not unique. We hear them every day. We 
are passionate about taking care of these children who, without 
CHIP, likely would be uninsured and unable to get the care they 
need. Across the Nation, there are 8 million children enrolled 
and depending on an extension of CHIP funding.
    While some CHIP children may have access to coverage 
through an employer group, the cost of dependent coverage may 
be cost-
prohibitive for the family. In addition, employer-sponsored or 
marketplace coverage may have higher deductibles, premiums, and 
co-pays than CHIP, leaving even insured children without access 
to the services and medications they need.
    CHIP is a very efficient program. In Alabama, our 
administrative cost is less than 6 percent of the total cost of 
our program. We process 99 percent of applications within 10 
days, and 90 percent of our claims are processed within 14 
days, ensuring our providers are paid timely.
    It is important that a decision to extend CHIP funding be 
made soon. States are developing budgets for fiscal year 2016 
now. States cannot make adequate plans with the uncertainty of 
continued funding for CHIP. Families are relying on you to make 
this decision soon. The uncertainty of CHIP continuation is 
stressful for them. The uncertainty also is stressful for 
employees of these programs. We may lose our very best 
employees because of this uncertainty. They may seek employment 
elsewhere.
    Before CHIP, the un-insurance rate for children in Alabama 
was 15 percent. In 2013, the un-insurance rate for Alabama was 
8.2 percent. CHIP is successful. It was started to give kids 
access to health insurance. There is still a need for CHIP. 
Through CHIP, you have provided routine and life-saving care to 
our kids.
    I ask you to extend funding for the Children's Health 
Insurance Program, and to do it soon.
    Thank you again, chairmen, ranking members, and 
distinguished members of the committee, for allowing me to 
speak.
    Senator Rockefeller. Thank you very, very much, Ms. 
Caldwell.
    [The prepared statement of Ms. Caldwell appears in the 
appendix.]
    Senator Rockefeller. Finally, we have Dr. Douglas Holtz-
Eakin, who is the president of the American Action Forum and is 
former Director of the Congressional Budget Office, which is 
fairly awesome. He is an acclaimed expert on fiscal policy 
matters who has held positions at multiple conservative think 
tanks and congressional fiscal commissions.
    We welcome you.

 STATEMENT OF DOUGLAS HOLTZ-EAKIN, Ph.D., PRESIDENT, AMERICAN 
                  ACTION FORUM, WASHINGTON, DC

    Dr. Holtz-Eakin. Thank you, Mr. Chairman, Senator Portman, 
and Senator Casey. It is a privilege to be here today to talk 
about this topic. I have a longer statement I have submitted 
for the record.
    In these opening remarks, I have three simple points, the 
first of which is that inaction looks very problematic, to say 
the least. The second is that the ACA has changed the landscape 
and that, going forward, the CHIP program should likely be 
modified to reflect that changed landscape. And three, the CHIP 
Program has a lot of features which have proven to be very, 
very successful and durable and should be kept in the program 
as those modifications take place. Let me elaborate a little 
bit on that.
    There are three key aspects of the budgetary situation that 
really stand out. The first has been noted: funding ends after 
2015. The second is that the ACA has a requirement of a 
Maintenance of Effort for States in their CHIP programs through 
2019. The third is that the CBO baseline funding for the 
program is only $5.7 billion for the years after 2015.
    The first two of those features mean that if nothing is 
done, States are going to be in significant budgetary trouble. 
They have an obligation to continue the programs, and, 
depending on how they have done it--as a stand-alone, Medicaid 
expansion, or a partnership--they are going to face deficits of 
one type or another. The third feature means that if the 
Congress chooses to go forward with a program that is anything 
like the size of the current one, it is going to need more 
budgetary resources. So something is going to have to give, and 
action will be required.
    The second key point is that the ACA has really changed the 
landscape. First and foremost, the exchange subsidies are now 
available for those at 138 percent of the Federal poverty line, 
up to 400 percent, overlapping with the traditional CHIP 
eligibility. Indeed, when the ACA was first passed, I thought 
we would not need a CHIP program anymore. I think many people 
thought that, but it turns out that is just not true.
    As has been mentioned, there is this family glitch in the 
ACA where employers can satisfy their obligation under the 
mandate by offering the employee coverage, but not family 
coverage, and, as a result, he or she will have a family and 
children who are not eligible for subsidies in the exchanges. 
Our estimate at the American Action Forum is that there are 
about 1.6 million children in CHIP right now who will find 
themselves in that situation. There are another 645,000 who are 
uninsured at the moment who will find themselves in that 
situation. That is a population that CHIP traditionally has 
covered and should cover going forward.
    It is also true that, depending on how States have done it, 
some of those who use CHIP money to expand Medicaid are going 
to have insufficient funding if nothing is done. That is 
another almost 500,000 children at risk. That brings a targeted 
population of about 2.7 million that have a real need for a 
CHIP program, despite the passage of the ACA.
    The third thing I would mention is, simply, in trying to 
remodel the program for the future, hold on to some things that 
have been successful. The bipartisanship has been mentioned in 
the past, and I want to echo that. When I was CBO Director, 
working on CHIP was a relative pleasure. Very few Senators 
yelled at me. [Laughter.]
    It would be wonderful to see that tradition continued. It 
also is a program that, in part, got that success because it 
was narrowly targeted. It is not an open-ended entitlement. 
Congress thought hard about who belonged in there and provided 
the funds for that.
    Right now, if we did the 2.7 million that I mentioned, that 
would be under $6 billion a year, based on a rough estimate of 
ours. Or you could continue the program in its current 
incarnation, and that would be, maybe, $20 billion in 2016. So 
there is a real range of funding amounts that would come out of 
trying to figure out the population that the Congress wants to 
cover.
    And the last thing is the great success at letting the 
States manage this in a flexible fashion. I think that has been 
a hallmark of the CHIP program and something that both the 
committee and the Congress should think about as they build a 
CHIP program for the future.
    In closing, just let me add my voice to those 
congratulating you on an outstanding record of public service 
and say it is a privilege to be here today and to answer your 
questions. Thank you.
    Senator Rockefeller. Thank you, sir, very, very much.
    [The prepared statement of Dr. Holtz-Eakin appears in the 
appendix.]
    Senator Rockefeller. I am interested in the children who 
still have to be reached out to, in the Alabamas and West 
Virginias and Pennsylvanias and Ohios, et cetera. There are 
still so many.
    Let us just take Alabama. I am going to ask you a two-part 
question, Ms. Caldwell. The business of outreach is often not 
the question of the State, or a group of doctors, or citizen 
action groups reaching out. It is getting past the parents and 
getting the parents to buy into the program.
    Having health insurance is a fabulous thing. So is having 
an education. But you and I both know that in West Virginia and 
in Alabama, with bus service often scanty for most rural areas, 
parents will withhold the child going to school, saying, if you 
go to school, it is not going to get you anywhere anyway, so 
stay home and let us work on the garden.
    In other words, that is a problem. That is a problem. It is 
not something that the parents faced--they had education, they 
did not have education--but, with respect to their children, 
they just think differently, and they think in terms of 
convenience. From their real-world perspective, getting an 
education does not seem to prove that it is going to turn into 
a lot of dollars.
    So, one, how do you go about outreach in Alabama, or how 
should we do it generally? And second, this whole question of 
disruption is really hard for me. I will just put it this way: 
it is a really popular program. But it was, I think, Senator 
Casey, Senator Portman, the last amendment at 2 o'clock in the 
morning on the--what was it?--8-day markup we had on the 
Affordable Care Act. It was the last amendment, and the 
presiding person at that session turned to me--I was sitting at 
his side--and asked me not to bring up CHIP. I did not ask him 
what his reasons were. I just said that I was not going to 
follow those instructions. I was going to bring it up, and it 
did pass.
    We talk about bipartisanship, how people agree on things, 
but then things can come up, either placement or disposition of 
time, or the mood of the leadership, or whatever it is. 
Politics can come into it. So you cannot always count on 
something which has been bipartisan to continue to be 
bipartisan. I hope we can. All I know is, I am fighting really 
hard, knowing that there are people who do not want to see this 
happen.
    So could you address the question of outreach and also the 
question of disruption and why having multiple ways of going at 
the CHIP program is comforting to your Governor and to 
Governors throughout the United States?
    Ms. Caldwell. I would love to, and I too would like to add 
my thanks for your service, particularly to the children of our 
country and your great CHIP Director, Sharon Carte. She is one 
of my very special colleagues and friends, and she is retiring 
in the near future as well, but she has just worked so hard for 
the children of West Virginia.
    So, outreach--I think Alabama has some best practices 
around previous outreach. We had always conducted a lot of 
outreach targeted to all uninsured children in our State. The 
higher percentage of those were Medicaid-eligible, as is seen 
in every other State. 
The bulk of the uninsured children in our country are actually 
Medicaid-eligible, then a smaller proportion are CHIP-eligible.
    Approximately 2\1/2\ years ago, we stopped outreach in 
Alabama because of State budget problems. There just was not 
sufficient State funding for us to continue the outreach we 
were doing. Particularly, we could not really afford for our 
program to grow at the rate it had been growing, so we stopped 
outreach. Nobody was particularly happy with that. It was just 
the reality of funding.
    What we found through all of the years we were doing 
outreach is that it is important to keep the message out there 
continuously, because families find themselves in different 
situations. If your children have always been privately 
insured, you may tend to not pay that much attention to 
Medicaid or CHIP. Then all of a sudden, there may be a job 
loss, and the family needs these programs.
    So we found that we needed to be out there telling families 
what Medicaid was, what CHIP was, really targeting all of the 
uninsured children. We have always partnered with all of our 
provider groups. The Alabama chapter of the American Academy of 
Pediatrics is just one of our number one partners.
    So, even though the State has not conducted organized 
outreach in the last few years, our community partners have 
absolutely stepped up. So, in getting the word out, getting the 
information out to all of our partners, we certainly have 
always partnered very closely with school nurses and other 
school staff. So just being everywhere and targeting all of the 
uninsured children I think is great, and I certainly have hated 
that we have stopped outreach in Alabama. Hopefully it will 
come back before too long.
    As far as the disruption, if funding is not continued for 
CHIP, it is going to be a nightmare. It is going to be a 
nightmare on many levels. Certainly on the State level, we are 
already dealing with issues related to the uncertainty of CHIP 
funding. We are preparing our 2016 budget right now. What I 
have asked my staff to do is to prepare a budget assuming we 
are funded and assuming the current match rate, because, as you 
know, the law calls for an increase of 23 percentage points for 
the Federal match rate for CHIP beginning in 2016. That would 
be 100-percent Federal funding for Alabama.
    That versus no continuation of funding which--I see a zero. 
That is two opposite ends of the spectrum, zero funding versus 
100-
percent Federal funding. So we are picking something in the 
middle of the road.
    That is just my guidance to my staff. Now, as far as how 
the legislature will view funding the program under this 
uncertainty, I think we will just have to wait and see. We have 
families already getting stressed. We have staff already 
getting stressed.
    When we enroll a child in CHIP, we award them 12 months of 
continuous coverage. So right now, within just a month, when we 
award a child 12 months of coverage, we are not certain that we 
can actually guarantee that 12 months of coverage because, by 
that point in time, if funding has not been extended, possibly 
the program may not even be in existence. Even that question 
comes with a huge amount of uncertainty in that, if we knew the 
program was ending September 2015, we would really need to 
start ramping down, quit enrolling new kids, possibly start 
disenrolling current enrollees well before that.
    We cannot really do that because, if funding was extended 
at the last minute, then we would be in violation of 
Maintenance of Effort. The truth is, there seems to be an awful 
lot of uncertainty around a State's obligation to the 
Maintenance of Effort requirement even if funding is not 
continued.
    So those are just a few examples of why I think it would be 
a nightmare, and the families and the enrolled children are 
going to be the most affected by far, because just the peace 
and comfort that enrollment in CHIP has given so many 
families--this issue just brings about a lot of anxiety. For 
many of the children who are dis-enrolled from CHIP, they may 
find coverage through an employer plan or a marketplace plan, 
but it is my belief that many will not, and they will go back 
to being uninsured and not have access to the health services 
that they need.
    Senator Rockefeller. I thank you very, very much, and I 
apologize to Senator Casey and to Senator Portman that I have 
overrun my time.
    So let us go to Senator Casey, followed by Senator Portman.
    Senator Casey. Mr. Chairman, thank you very much. You have 
that prerogative anytime, but I guess you have it especially 
today, to go over your time.
    We are grateful for the witnesses' testimony. There is a 
lot to focus on, but I wanted to focus on the consequences of 
inaction, the consequences of not moving forward in the 
direction that we all hope. Mr. Lesley, could you walk through 
that, just kind of what could happen if we do not act?
    Mr. Lesley. A couple of things, I think, are important. I 
think my colleague talked about some of the things that her 
State faces. I would also say that--and I would emphasize Ms. 
Caldwell's point on what happens to the families and the 
uncertainty around that and whether the State can commit to a 
12-month continuous enrollment.
    There is also the issue of the States and their contracts 
with providers and plans. So how does a State sign a contract 
with a managed care provider, and how does a managed care 
provider sign contracts with their provider networks, when 
there is so much uncertainty about the future of the program, 
and so much uncertainty about the funding levels, and so much 
uncertainty about the Maintenance of Effort provision and what 
all those things mean?
    So for us, I think that, even with all the positives about 
CHIP and all the issues that we found that would happen to kids 
if they lose insurance, we all know--I have worked up here for 
12 years--things happen in Congress, and, if we wait until next 
year, you would have to look at the vehicles. Would we try to 
attach it to the SGR? Would there be some sort of budget 
reconciliation package? There is so much uncertainty around any 
of that.
    In 2007, we know we had this experience: President Bush 
vetoed the Children's Health Insurance Program at one point, 
and, as we went through the process, the program actually 
expired. States were beginning to send out dis-enrollment 
notices to families. So dis-enrollment notices went out to 
families in something like more than a dozen States at some 
point as funding was starting to lapse. Fortunately, Congress 
stepped in at that point and did an extension. But it was a 
disaster, because States were looking to fire employees, 
families were freaking out because they were being told they 
were about to lose their coverage, and providers did not have 
any certainty.
    One of the things that we know is so important about CHIP 
in this whole issue of 12-month continuous coverage is that the 
incentives are to make sure that the kids remain healthy. It 
really disrupts that, to use Senator Rockefeller's term.
    Senator Casey. I wanted to highlight the chart that you 
have on page 3 of your testimony and just note it for the 
record, and not by way of a question, just by way of 
highlighting it. Based upon your Figure 1 on page 3, if you 
start in 1997, 14 percent of the children in the country were 
uninsured. As of 2012, that was cut to 7 percent, so cut in 
half in that time frame. Obviously, 7 percent is still too high 
in my judgment. We have work to do, but it is a substantial 
achievement.
    Moving to Dr. Perrin, I guess the point that you made is an 
oft-repeated maxim, which is that children are not small 
adults. You cannot just take a health care program and impose 
that upon the life of a child and expect to get the results we 
hope for.
    I think what your testimony gave us in addition to 
validating the program from the perspective of the American 
Academy of Pediatrics--we certainly appreciate that--is a to do 
list at the end of your testimony: fully funding CHIP through 
at least 2019, number 1; number 2, expanding awareness; number 
3, facilitating enrollment; number 4, maximizing comprehensive 
coverage and affordability; number 5, enhancing the quality 
measurement; and number 6, ensuring adequate payments for 
physicians. So, among other things, that is critically 
important. I wanted to ask you if there is anything else, any 
other point you wanted to make from the vantage point of the 
Academy?
    Dr. Perrin. Senator Casey, thank you. As a native 
Pennsylvanian, you know a lot about what is going on in CHIP in 
Pennsylvania. It is an incredibly robust program, really 
important to the children and families in your great State, so 
I think it is really critical that we maintain it.
    I talked about prevention. I really want to stress that. 
Obviously we are interested in prevention of coronary artery 
disease in 50-year-old people as well, but the prevention 
aspect of what we do with children is so critical to what is 
going on. We know so much more about the science of development 
than we did even 10 years ago. We know how much more important 
it is that we provide early intervention services in the health 
realm, to really keep kids growing well and successfully.
    We know how important it is to our future economy, frankly, 
that we have a healthy workforce ready to go to work and keep 
our economy robust. So that preventive aspect is really 
critical, and it is one of the key aspects of the CHIP program, 
also of the Medicaid program, by the way, really a critical 
part of what is going on there.
    I will make one other quick comment, which is, we did pass 
Medicare a couple years ago, in 1965. At that time, a third of 
elderly Americans lived below the poverty line. Today it is 8 
percent, and it is partly because families were kept from 
health-related bankruptcy.
    The CHIP program does some similar things. It does not cut 
our poverty rate as much as I might like for children, but it 
surely keeps families able to do things to raise their kids 
effectively, to be able to let them play sports safely. All 
those sorts of things are really critical here and, again, 
because it is a child-specific benefit that really works.
    Thank you for that.
    Senator Casey. Thanks, Doctor. Thanks for the plug for our 
State too.
    Senator Rockefeller. Senator Portman?
    Senator Portman. Thank you, Mr. Chairman, and thanks to our 
witnesses. You have given us some good information to be able 
to prepare for the reauthorization before the end of next year.
    I am just a little confused on the cost run. Probably, that 
is on purpose, but when you look at it, really it is 
interesting. We have a situation now where we are funding 
through September 30th of next year, which will be the fiscal 
year, and yet you have an authorization through 2019. Under the 
Affordable Care Act, you have a Maintenance of Effort 
requirement, as I understand it, through 2019, which is really 
an unfunded mandate, because the funding level is at best 
uncertain and there is no requirement for funding beyond 
September 30th of next year.
    I also think, on the ACA requirement, it does not have the 
flexibility you would need, as Ms. Caldwell just talked about 
in response to the chairman's question.
    So, Doug, help us here. As a former Budget Director, what 
is the situation here in terms of what is in the baseline? What 
are the assumptions that CBO makes? Is it true that because it 
is built into the baseline that, say a 2-year extension, for 
instance, would actually not end up having a cost attached to 
it because it is assumed that it will be extended? What is the 
budget situation?
    Dr. Holtz-Eakin. The CBO budget numbers reflect what I 
would label a gimmick in the final passage when it was last 
funded. In that year, they provided funding for 2015 that 
consisted of three pieces: a lump sum of about $11 billion, one 
time, and then two 6-month appropriations at a rate of $2.85 
billion for the first and the second half of the year.
    CBO, under its rules, when it is asked to extend a program 
that has not been refunded or reauthorized, continues at the 
last funding level that the Congress has authorized, so that is 
$2.85 billion for 6 months, or $5.7 billion per year. That is 
what is in their baseline.
    That clearly will not cover the cost of the existing 
program if you were to run it out for another 2 years. So the 
Congress would have to come up with more resources in the 
process of doing any such extension. And that is a problem for 
the Congress that was created by the way this was done the last 
time they passed it.
    Senator Portman. You got into this a little bit earlier in 
your testimony, but do you have an estimate of what that cost 
increase would be, what the shortfall would be, through a 2-
year extension?
    Dr. Holtz-Eakin. You are running somewhere between the $5.7 
billion you have and the $20 billion you need at the Federal 
level to fund the program under current law. So you have to 
come up with another $14 billion a year.
    Senator Portman. In terms of the ACA requirement, have you 
spent any time looking at that?
    Dr. Holtz-Eakin. Not in great detail. We know it exists. 
The CBO, again, in its baseline, does not reflect the higher 
match rate that the States are counting on, because there is no 
money to pay that higher match rate, so it simply assumes it 
does not happen.
    Senator Portman. So it goes to a 50-percent match for most 
States?
    Dr. Holtz-Eakin. It just stays at the current match rate, 
so they do not get the 23 percentage point bump, and it is 
silent on how the States are supposed to manage that at the 
other end. The cost of the program still is what it is, but 
there is no money there.
    I am not a legal expert. Just what you do in terms of 
Maintenance of Effort when it is not funded, I think remains 
uncertain at best.
    Senator Portman. Yes. I see a lot of heads nodding. 
[Laughter.]
    Uncertainty is a concern in Ohio, I know. Every State has a 
little different approach to this, but one thing we talked 
about earlier was the fact that States get the opportunity to 
design these programs so they work best for their children. 
That flexibility, it seems to me, is the positive thing, 
actually something that, under Medicaid, we could use some more 
of. In States like Ohio, where we do have some good innovative 
ideas, we are looking for the ability to design and administer 
the program that way.
    One question I would have--and I guess, Ms. Caldwell, you 
would be a good person to answer this--is, could you talk a 
little about the structure of CHIP as a State block grant and 
how your State has used that flexibility that you have to 
provide coverage that is best suited to the children of 
Alabama?
    Ms. Caldwell. Absolutely, and I think Alabama is a great 
model. We have a separate stand-alone CHIP program administered 
in the Alabama Department of Public Health. So we are even in a 
separate State agency from Medicaid, but we have always worked 
very, very closely with the Medicaid agency. We have a joint 
application. We have always had a joint application. Certainly 
with the Affordable Care Act implementation, we built a joint 
eligibility system.
    When decisions were made about Alabama's CHIP design, there 
were some very vocal advocates who said, we would like to see a 
separate stand-alone program, not an expansion of Medicaid, and 
that is how it was designed. We actually deliver our CHIP 
benefits through Blue Cross and Blue Shield of Alabama. So our 
enrollees have access to the exact same network as almost every 
privately insured individual in our State. I am not saying that 
would be the best model for every State, but I am saying that 
it has been a great model in Alabama.
    Senator Portman. By the way--I guess this is maybe obvious 
to all of our witnesses, but, in a State like Ohio, where CHIP 
is part of our Medicaid program, we take a hit too. So it is 
not as though, just because you have a stand-alone program, at 
the end of next year you are going to be in some special 
situation. All States will have to face this.
    I guess if maybe one of our other witnesses could just talk 
briefly--Mr. Chairman, my time has expired. I am sorry.
    Senator Rockefeller. Go ahead.
    Senator Portman. Could someone just talk briefly about what 
impact it would have on States like Ohio where we have it as 
part of our Medicaid program?
    Mr. Lesley. Senator Portman, thank you. I will speak to 
that issue and also your previous question too, if that is all 
right.
    So first of all, if CHIP expires, then you would go back to 
the regular matching rate, and, because of the MOE, you would 
still be covering the kids. So children would lose coverage, 
and the State would be out significant financial resources. I 
believe in Ohio, it would be tens of millions of dollars 
annually over the course of that period of time. I know with 
California it would be something like $500 million dollars, for 
example. So that is a huge impact that it would have on the 
States.
    With respect to the costs, one of the interesting things we 
know is, when Senator Rockefeller offered his amendment in the 
Finance Committee to save the CHIP program, one of the things 
that happened with the CBO scoring was that yes, there was a 
cost because you were keeping CHIP operating, but there was a 
savings because the children were not transferring into the 
Affordable Care Act, for example. The costs were estimated by 
CBO in the Affordable Care Act to actually be 25 percent 
greater than the costs in CHIP.
    As a result of that, there actually was a scored savings 
for Senator Rockefeller's amendment, which then allowed for 
some other improvements to the Affordable Care Act. One of the 
things we know is that MACPAC asked the CBO to look at this 
issue, and we understand, secondhand--I have not seen a score 
on this--that, if you keep CHIP in place without the bump, it 
actually saves money. With the bump, it actually costs a little 
bit, but it is within $1 to $5 billion over the 4-year period.
    Senator Portman. Thank you. That is very helpful.
    Dr. Perrin?
    Dr. Perrin. If I could just make a quick comment, Senator 
Portman. You, I know, have been very supportive of the really 
strong network of children's hospitals in Ohio. It is one of 
the real great activities in Ohio. It is one of your stellar 
parts of the State----
    Senator Portman. I wish my wife were here to hear you say 
that. She is very involved in one of them.
    Dr. Perrin. I attended medical school in Cleveland, so I 
was a part of that for a bit of that time. Seriously, it is an 
incredible benefit to the State and to the children of the 
State of Ohio.
    Those hospitals are highly dependent on Medicaid and CHIP 
funding. The ability to build the kind of extraordinary 
programs you have in Cincinnati, Columbus, Youngstown, Dayton, 
Cleveland, Toledo, et cetera----
    Senator Portman. Akron.
    Dr. Perrin. Akron, sorry. Thank you, sir. [Laughter.]
    It is really quite amazing. These places would change 
dramatically without CHIP. There would be cuts in staff. There 
would be cuts in critical programs to take care of kids with 
asthma in the State of Ohio, et cetera. There a lot of things 
that are going on that would change very dramatically in your 
State if this happened.
    Senator Portman. Yes. That is a great point, and we are 
blessed to have some of the great ones, three of the top ten in 
the country as rated by at least some rating agencies, 
including yours, probably.
    Thank you, Mr. Chairman.
    Senator Rockefeller. Thank you, Senator Portman, very much.
    I remember when we got our children tested for sensitivity 
to ragweed and all kinds of things. We took them out to the 
University of Cincinnati. It was a wise decision. You did not 
mention Cincinnati, so I thought I would. [Laughter.]
    Senator Portman. Cincinnati Children's Hospital Medical 
Center, number three in the country based on the latest rating.
    Senator Rockefeller. Of course. Of course. [Laughter.]
    Just as a follow-up to the question of funding which was 
addressed, CBO actually has come out with an estimate on what 
all of this would cost. It is not $20 billion; it is in the 
area of zero up to $10 billion over that period of 4 years. I 
only say that, not to argue with you, but simply to say that, 
in this program, where everything is ``maybe, but, if,'' it is 
important not to scare people. That was not your purpose, but I 
just wanted to put that on the record.
    To you, Dr. Perrin, the whole question of prevention and 
health care for children strikes me as so vastly greater than 
it would have been 10 years ago. I spent a lot of time--every 
one of my 30 years I have been on the Veterans Committee--
working on the Gulf War Syndrome and post-traumatic stress 
disorder. Actually, there are some remarkable experiments going 
on with that which are FDA-approved, clinical trials, which 
show that, by doing certain things, with 2 years of 
psychotherapy, you can reduce PTSD in veterans--of course, that 
takes you all the way back to Civil War veterans--by 83 
percent. It does not mean it will happen. It is not an approved 
protocol at this point, but it is on its way.
    It is not just adults or veterans who get stressed out and 
have trauma. Children have extraordinary trauma. You can see 
that going on now in football. You can see that with kids being 
molested, kids being beaten up. People have kids who really do 
not want to have kids, so the family is in turmoil--a mother-
in-law does not agree with something, or a father-in-law. Kids 
can be put down, slammed down really hard at a very early age, 
and remember it for a long time.
    To me, all of that enters into the world of prevention. I 
remember--and this is a little heretical to say--back in 1989, 
Senator Jack Danforth, who was a marvelous, marvelous Senator, 
and I put out the first kind of discussion about end-of-life 
care, which was immediately slammed down, but we kept bringing 
it up year after year. It began to be discussed.
    I think that sort of discussion is also important for 
children. What is prevention? It is not just looking for 
tonsillitis or whatever, giving an immunization shot. There is 
a lot of psychological aspect to it. I think that this country 
has opened up enormously to the whole field of mental health, 
and it is much more tolerant, families are becoming more 
tolerant, they are becoming more open, about talking about 
their own situations on that, but much less their children's 
needs on that.
    I would love you to take the field of children and expand 
it from when you were practicing, let us say 20 years ago, to 
today's context of horrible television and all kinds of traumas 
going on in all directions. In what ways are children, do you 
think, more vulnerable and, therefore, more needy of the kind 
of prevention that the CHIP program provides?
    Dr. Perrin. Thank you, Mr. Chairman. This is a tremendously 
important area for how we think as pediatricians. So we are 
really committed to the notion that a number of folks are 
working on about making communities places where children can 
be healthy, where we have a culture of health as part of what 
our communities are about, rather than a culture of abuse or a 
culture of violence or a culture of danger where children are 
not allowed to go outside because they may get shot, et cetera.
    We really are working to change that kind of notion. That 
is the kind of prevention that we really are working on. It is 
really critical. We know so much more about the science of 
brain development than we did 15 years ago, and we know that 
those experiences you just mentioned, about being slammed down 
and so forth, leave permanent scars, permanent changes in brain 
architecture and neuroendocrine function of the brain, that 
really stay there forever and really do limit the child's 
ability to do the kinds of things that she ought to be able to 
do as she grows up. So that is where we think of prevention, 
and we as clinicians are increasingly working on the area of 
prevention in our collaboration with our other partners in 
communities to make communities a place of health.
    So one of the things that is really exciting about CHIP and 
Medicaid today is a return to the notion that mental health 
really belongs in community health. It should not be carved out 
as it was for probably 25 years, making it such that I could 
not see a patient in my office with a diagnosis of attention 
deficit hyperactivity disorder because that was a psychiatric 
diagnosis. I certainly saw kids with that diagnosis in my 
office all the time, but I was not allowed to do so under the 
carve-out arrangements.
    Preventative services--identifying children early, 
identifying family issues early--were very difficult to do 
because we carved them out of regular health. We considered 
mental health not regular health. Well, we are bringing it back 
in.
    Senator Rockefeller. You could see it, but you could not do 
anything about it.
    Dr. Perrin. You could not do anything about it; right. We 
are bringing that back in. Medicaid and CHIP programs across 
the Nation, in so many of our States, are moving to 
reintegration of mental health into primary care.
    I will tell you, by the way, clinically, it is incredibly 
exciting to me. It is so much fun. It is so interesting to work 
with families to sort of help them understand their strengths, 
not their weaknesses, to help them build on that, help them 
think about how to nurture children effectively. That is where 
we are going, and again, Medicaid and CHIP are moving back in 
that direction and allowing us to do it. These are really 
exciting times.
    Senator Rockefeller. I am already over my time, and I want 
to go to Senator Stabenow and, of course, the chairman.
    One of the things that always disturbs me--I work a lot 
with seniors, as the chairman has done for his whole life. One 
of the things you see is doctors in medical school going into 
geriatrics, and they are very intense, very determined on that.
    When they get into the field, it does not pay as well as 
some of the other specialties. That was, sort of, one of the 
things that brought about that ``resource base relative to 
value scale'' adjustment back in--what was it?--1989 or 
something like that, where you try to get more parity between 
primary care physicians and the better-paying specialties.
    We found that geriatricians were wandering away from 
geriatrics and going into other fields for which they were, for 
the most part, trained. On the contrary is this new emphasis 
and the excitement which you exhibit, and all of you exhibit, 
in terms of taking care of children. And they are not little 
adults, but they are getting a lot of what adults are getting, 
but have no defenses against it. They just absorb it and so it, 
sort of, sits in there roiling.
    Are you finding that people are more attracted to being 
pediatricians? Are the rolls growing on that?
    Dr. Perrin. So we have been fortunate in pediatrics in 
continuing to maintain a pipeline of young people excited about 
this field and coming into it. I think we are, actually, still 
doing all right. We are not sure why, because it never pays 
well compared to all of our other areas in medicine.
    Behind me is a young person from the great State of West 
Virginia who is a young person training in medicine and 
pediatrics together. These are people who are committed to 
doing this, and that is what we still recruit. We have not seen 
a drop-off in people coming into pediatrics. I am really 
excited to be able to say that.
    Now, you know, we still have lots of problems in financing, 
paying for the kind of care we are trying to provide. Our 
pediatric subspecialties are not a great pipeline right now. We 
have a lot of places where we are not getting the people who 
are kidney specialists, or heart specialists, or blood and guts 
specialists coming into pediatrics. We need to be working on 
paying them better, but the Medicaid payment increase is only 
for primary care. We do not want to treat a child with cystic 
fibrosis as being worth only two-thirds what a child without 
cystic fibrosis is.
    So we do have some issues to deal with here, but the 
exciting thing is, it is an incredibly rewarding life. I can 
say that personally, how wonderful it has been to be a 
pediatrician in my career. We are still getting wonderfully 
bright, interesting, committed, passionate people coming into 
our field. It is different from geriatrics.
    Senator Rockefeller. That is great.
    Senator Stabenow?
    Senator Stabenow. Well, thank you very much, Mr. Chairman. 
I am so glad I got here before the meeting was over. I 
apologize, I was----
    Senator Rockefeller. It was not going to be over until you 
got here.
    Senator Stabenow. Well, thank you. I was on the floor, as 
you know, from 3 o'clock to 4 o'clock with other business. I 
loved when I came into the room that you were talking about 
mental health, one of the many, many reasons that we are not 
letting you leave, by the way. You may think you are leaving, 
but we are not letting you. Senator Wyden, our chairman, has a 
room, and we are locking you in it. So we are not going to let 
you leave. [Laughter.]
    I really, rather than to ask a question, came specifically, 
not only to say you need to reauthorize CHIP so that anywhere 
from 2 million to 4.5 million children who are currently 
enrolled will not lose their insurance, but also to thank you 
as the father of CHIP. You are the health care father to 
millions of children who would not have health care or mental 
health services, would not have preventative services, without 
the incredible work that you have done.
    I just want to thank you for that. You have not only 
touched children and families in your beloved West Virginia, 
but in my beloved Michigan, and Oregon, and everywhere in 
between. There are generations of adults who will live 
healthier, happier lives, and parents who have gone to bed at 
night not having to worry about whether or not the kids got 
sick, because of your efforts. That is primarily what I wanted 
to say.
    I am also passionate about treating the entire person, the 
child or adult, and very pleased that, with Chairman Wyden's 
support, we actually have put in place the beginning of the 
change here with a first-step pilot project to equalize funding 
in the community for mental health and public health. I have 
said over and over again, we need to treat illnesses above the 
neck the same as below the neck and in a comprehensive way.
    So I look forward to working with all of you on that, and 
to doing everything possible to make sure that CHIP is 
reauthorized. I think, most importantly today, it is an 
opportunity to say ``thank you'' on behalf of tens of millions 
of people in the country who are living better lives because of 
Senator Jay Rockefeller. So, thank you.
    Senator Rockefeller. I will allow that to stay in the 
record. [Laughter.]
    I want to call on the chairman and then Senator Menendez.
    Senator Wyden. Thank you, Chairman Rockefeller.
    Senator Stabenow's comments were, of course, spot-on. I am 
now trying to figure out how we are going to enforce some of 
these rules. Senator Stabenow said that Chairman Rockefeller 
was going to be locked in that room nearby, and I am going to 
have to discuss that with Sharon. [Laughter.]
    I think at this point, Chairman Rockefeller, you have 
gotten the drift about how strongly our colleagues feel about 
you.
    What I want to do--and today has been a hectic afternoon--
is get back to, kind of, one question which I think is pretty 
key to preserving Chairman Rockefeller's legacy. It deals with 
what I am sure we are going to get in this debate as it gets 
fast and furious. I think we are going to get the question with 
respect to, so we have the ACA, we have the Affordable Care 
Act, and it expands coverage. So, if we have the Affordable 
Care Act and it expands coverage, so how come we need this 
other deal called CHIP?
    You and Senator Menendez and everybody else here, you can 
agree that Chairman Rockefeller is the best thing since night 
baseball, which has been pretty clearly annunciated here. But 
people might still say, so, how come we need the CHIP program?
    So I want to go through something that I think really 
outlines it, because it really raises the issue of what I think 
people in the field have come to call the kid glitch in terms 
of what might happen, and it actually is sort of a branch of 
what I am concerned about with respect to health policy 
generally, which we talked about during the course of the 
Affordable Care Act, and that is the family glitch. When the 
free choice voucher that I added to the Affordable Care Act was 
eliminated, that meant we were going to have a bunch of 
families falling between the cracks. There is going to be a 
family glitch.
    Let us talk about kids, specifically. Now, my understanding 
is, for the purposes of determining if a person is eligible for 
a Federal subsidy to buy health insurance, the IRS bases the 
calculation off the cost of an individual, rather than a family 
plan. So we are going to have some real barriers for families 
who cannot afford to pay the monthly premium for a real family 
plan. It is going to be more expensive.
    So parents may be covered through an employer, though they 
are unable to afford the cost of insuring their child as well. 
We will still be in the situation where Medicaid is often not 
an option, as these families often make too much to qualify, 
thereby leaving the kids in that no-man's land with respect to 
being uninsured, generally.
    So to me, that would be a real kid glitch which would come 
about, certainly if CHIP were eliminated, but even if it was 
reduced substantially. You would have a lot of kids getting 
hammered by this kind of kid glitch. So I thought of asking 
this question of two people I have admired for quite some 
time--Bruce Lesley and Doug Holtz-Eakin. We have others who are 
very knowledgeable in this field as well.
    Mr. Lesley and Dr. Holtz-Eakin, why don't you give me your 
view about what your take is with respect to the kid glitch. Am 
I missing something? What are the implications, because it sure 
looks to me that, certainly if CHIP were even cut back in a 
significant way, we would have a lot of kids in this no-man's 
land I have been calling the kid glitch.
    Mr. Lesley, Dr. Holtz-Eakin, either of you. I know Senator 
Menendez has a busy schedule, but I wanted to ask that one 
question.
    Mr. Lesley?
    Mr. Lesley. Yes, sir. Thank you very much, Chairman Wyden.
    The kid glitch is absolutely a tremendous problem with 
respect to the interaction between CHIP and the Affordable Care 
Act. If CHIP were to expire, we estimate that somewhere in the 
neighborhood of 2 million kids could lose coverage because of 
exactly what you described. The family member would be deemed 
to have affordable coverage, or the employee, but the dependent 
coverage would not be affordable.
    So, even if the family was offered coverage that was maybe 
like 8 percent of their family income, they would be deemed to 
have affordable coverage. The family coverage could be as high 
as 30 percent of family income, which is absolutely 
unaffordable. Often, we know for a fact that employee coverage 
is less subsidized for family coverage, and family coverage is 
2.7 times the cost of employee-only sponsored coverage.
    It is a huge issue. In addition to that, I would note that 
the Wakely Group report shows that, even for the kids who can 
migrate and who can get subsidies, we also know, even for them, 
the cost of coverage, as Chairman Rockefeller talked about 
earlier, is as much as nine times more expensive in the 
Affordable Care Act plans than it is in CHIP.
    The cost would go up substantially in either setting. The 
interesting thing to note is that CHIP has been deemed to be a 
cheaper package than that in the exchange plan. So it does not 
make a lot of sense that we would move kids from one to the 
other and leave kids stranded, either uninsured or with more 
costly out-of-pocket costs and fewer benefits for more money. 
It would cost the Federal Government more money.
    That whole rationale, it leads us to very strongly support 
the extension of CHIP.
    Senator Wyden. Dr. Holtz-Eakin, is there anything you want 
to add?
    Dr. Holtz-Eakin. As I emphasized in my remarks at the 
outset, this is a real problem. There is no way around that. 
Our numbers are a bit higher. We think if you combine the kid 
glitch and those who get CHIP money devoted to Medicaid 
expansions, we have 2.7 million children in this category of 
risk.
    The thing I would emphasize for the committee and the 
Congress is, it is really not a matter of bigger or smaller. 
CHIP should change. It is in a different environment. There are 
other vehicles for coverage for other people, and it now 
resides in an insurance landscape. This is very different than 
the one in which it was created. It would be beneficial for 
Congress to address the funding cliff that it faces, but also 
to think about a CHIP program for the future that fits into 
this landscape.
    Senator Wyden. Thank you. Thank you, Mr. Chairman.
    Senator Rockefeller. Thank you very much.
    Senator Menendez?
    Senator Menendez. Thank you, Mr. Chairman. I want to talk 
about two dimensions of CHIP that I think sometimes do not get 
the attention they deserve. Having heard the last answer about 
the kid glitch, in my mind it is even more imperative.
    Mr. Lesley, in your testimony, you mentioned something that 
I do not think gets enough attention when discussing CHIP, and 
that is the impact it has on reducing racial and ethnic 
disparities. And then there is the success of the promotora 
models of engagement. As a matter of fact, this past Sunday, 
Nicholas Kristof and Sheryl WuDunn published an article in the 
New York Times highlighting the benefits of early intervention 
with pregnant women and newborn babies.
    Mr. Chairman, I would ask unanimous consent that that 
article be included in the record.
    Senator Rockefeller. So ordered.
    [The article appears in the appendix on p. 67.]
    Senator Menendez. It highlights a substantial benefit to 
children and families from early intervention and home 
visitation. For example, these early intervention programs 
resulted in a 79-
percent reduction in child abuse and neglect, a greater than 
50-
percent reduction in arrests later in a child's life, and more 
than 2 fewer years on public assistance programs. So, if you 
combined those evidence-based programs, they offer nearly a $6 
return for every dollar that we invest.
    The article also highlights the work of the Nurse-Family 
Partnership, a group that I have worked with extensively on the 
Maternal, Infant, and Early Childhood Program, which provides 
women and children incredibly important and successful 
services.
    So that is a big preface, but what I want to get from you 
is, can you speak to the impact on children starting at 
childhood and moving through adolescence when they have access 
to services like home-visitation alongside other health care 
services as well?
    Mr. Lesley. Yes. Thank you, Senator Menendez. First and 
foremost, I would also like to acknowledge an amendment that 
you offered that was so important in all of this, which is the 
Child Only Option, which really recognized that children and 
families often get their coverage separate and apart from their 
parents. Their parent may be a veteran and have VA care, but 
the child gets coverage under Kinship Care. Their grandparents 
may be on Medicare, but they need to get CHIP coverage. That 
amendment has been huge, and we are really working to try to 
make it work.
    CHIP and Medicaid have had an enormous impact on health 
disparities. I would note a National Institute of Medicine 
report in my testimony that talked about some of the impact on 
disparities. There are also reports from the CDC and ASPE that 
talk about that.
    The coverage differences have been remarkable. We have 
really shrunk the disparities in coverage. I would note exactly 
what you said--also noted in Dr. Perrin's testimony and a 
question I answered--which is this importance of prevention. 
And NFP has proven that for every dollar you spend, you save 
enormous amounts of money in long-term savings. It is a medical 
model where nurses go into the home, and we really believe that 
it has really facilitated the combination of Medicaid and CHIP 
in partnership with organizations like NFP.
    Also, you mentioned the community health workers or 
promotoras program. When I worked for Senator Bingaman, there 
was a grant that went to a promotora program in Las Cruces, NM, 
and they had a target of trying to reduce the uninsured rate. I 
think the uninsured rate in Las Cruces was something around 35 
percent, about a third. Literally, these two women got this 
grant and went from county fair to county fair doing the 
outreach that Senator Rockefeller was talking about doing--
outreach to the community. They had a target of ``x,'' and they 
actually exceeded it.
    The other day we were laughing, because you have 102-
percent coverage in Las Cruces now. It was enormously 
successful, and, not only was it successful in getting coverage 
to people, but it was also successful in helping families 
navigate the system. That is another bill you have done in the 
past, the Patient Navigator, which really helps people navigate 
the health care system. It was huge for the people in Las 
Cruces, the combination of those things working together.
    Senator Menendez. I appreciate it. Part of our challenge 
when we score here is that I wish we scored in ways in which we 
recognize the upside, like the ratio I just described, so that 
we could factor that in.
    If I may, Mr. Chairman, could I ask one other question?
    Senator Rockefeller. Please.
    Senator Menendez. Dr. Perrin, first of all, I want to thank 
you and the Academy for the work that you did with me and 
Senator Enzi on the Autism Care Act earlier this year. I think 
it is incredibly important.
    As you know from that, the State of New Jersey has the 
highest incidence of children diagnosed with an autism spectrum 
disorder--one in 49 receiving a diagnosis by the age of 8, 
compared to one in 68 nationally. Providing resources for 
children with autism and their families is one of my top 
priorities, and we are elated that the President signed the 
Autism Care Act into law, which continues some critical Federal 
autism programs that were set to expire and a provision that I 
included in the Affordable Care Act requiring autism services 
to be included as essential health benefits in all new 
marketplace insurance plans.
    I want to see if you can help me discuss the role that CHIP 
plays in providing critical behavioral health and autism 
services to children, and how that help and intervention 
impacts a child in the autism spectrum disorder in terms of how 
we maximize whatever their God-given ability might be, and how 
it affects them as they grow up?
    Dr. Perrin. Thank you, Senator Menendez, and thank you so 
much for your incredible advocacy for the Autism Care Act. We 
are really grateful for that. We think that is an incredibly 
important act for America's children, and it is doing really 
some extraordinarily important things.
    I have been talking about prevention and early intervention 
all afternoon. I think it is really the critical part of it. We 
know in an area like autism that it is really critical that we 
provide services early on, because the brain is still more 
plastic in a child who is 6 months or a year old to 2 years old 
than in a child who is really over the hill at age 5--not 
really, of course, but still, it is really critical to identify 
kids early and to get them the kind of early intervention 
services.
    You mentioned before, home-visitation as well. It is an 
area that we have been incredibly supportive of as well, and it 
is one where we are working very much to integrate and really 
connect much more actively what is happening in home-visitation 
and what is happening in community-based pediatrics, because we 
are working with the same families. We are trying to make sure 
that the communication is really going well in that context and 
that we are using that opportunity, again, to build community 
linkages, link families with resources, and try to help 
families find the kinds of resources to let them do better.
    CHIP is really very important, because the benefits in CHIP 
are preventive and child-oriented benefits. Yes indeed, we 
wanted the Affordable Care Act to have similar benefits in the 
exchange plans, but, as we know well, as the exchange plans 
have been implemented in large numbers of the States, the 
benefits for children, especially in behavioral areas and 
abilitative services, are not really very good.
    The CHIP benefits are substantially better in those realms. 
That is one of the reasons that we are really strongly 
advocating for the persistence of CHIP here. We will work to 
make the exchange plans better, no question about it. But right 
now the benefits for children in exchange plans in general--
very much State options as you know--are not great. That is why 
we are really very committed to CHIP as an important preventive 
benefit for children.
    Senator Menendez. I appreciate that. Thank you, Mr. 
Chairman.
    Senator Rockefeller. Thank you, Senator Menendez.
    I have a guilt complex because I have not asked you any 
questions, Mr. Lesley, but I am going to forgive myself in the 
interest of everybody else in this room. [Laughter.]
    All of us have asked you questions but me. So I apologize.
    Let me just say, in bringing this to a conclusion, I am 
struck by that number. Senator Menendez, you said one in 49 in 
New Jersey, one in 68 nationally?
    Senator Menendez. Yes.
    Senator Rockefeller. That is stunning. It has not been 
reauthorized, CHIP. It is still out there, floating. We are--
for reasons that only God could possibly understand--going into 
recess again in 3 days. The reason for that is actually 
something which is fairly important in public life, not 
attractive to many, but important, and that is elections.
    That puts terrible pressure on the lame duck session. We 
are talking about dealing with everything from continuing 
resolutions, all of the appropriations, what are we going to do 
about ISIS, and all the rest of it, in a lame duck session 
forum. That, in turn, will be shaped by whoever wins the 
Senate. If we keep the Senate, if we do not keep the Senate, 
that will have its affect.
    That, in turn, will have its affect on how CHIP is treated 
or put in priority. Lots of things are favored and wanted on a 
bipartisan basis, but they do not make it because the stars and 
the watches do not align properly for a discussion to be had, 
for votes to be held, or somebody can hold that up and cannot 
be talked out of not holding it up.
    The Senate has many, many mysterious ways of protecting the 
rights of the minority and others, but it can fall short in 
terms of passing legislation. So I want to emphasize that CHIP 
is not yet included. It is not included. It is out there still. 
I think it has terrific bipartisan support, but people are so 
good at picking something in it they do not like, and they do 
it dramatically, and then it blows up and goes viral.
    I worked very hard with Olympia Snowe to start something 
called the E-Rate to provide connectivity in schools and 
libraries. I am really happy that we did that, and sometimes I 
am really unhappy that we did it, because that is now the 
source of hacking, that is the source of bullying of children, 
that is the source of all kinds of invasions of privacy, and 
even shutting down whole hospital systems or power plants. It 
can have a devastating effect, and often the kids who can do 
this are less than 15 years old. It is the property and the 
power that we have given to people for one purpose but that has 
been used for other purposes.
    This is not that kind of a discussion. This is simply a 
matter of making sure that we get the CHIP program passed, that 
we get it extended, and that we get it done in what will have 
to be the lame duck session.
    The lame duck session does not sound like anything, but it 
is. It is a regular session. It is just that some people are 
there who will not be there, myself included, in the future. I 
do not want to fool around with CHIP. There just are not that 
many efforts which are as broadly supported.
    I have experienced so many things. Mike Enzi comes from a 
big coal mining State, but it is a different kind of coal 
mining State. It is, sort of, digging it out from the earth 
from the top. West Virginia has underground mining, which is 
not so much prevalent in Wyoming, and we had a terrible series 
of explosions there. Senator Enzi came and met with the 
families, with myself and a few other Senators. You could just 
see it working on him and within him.
    One of his colleagues on the Republican side, Senator 
Isakson, was one of those who came, and he still carries in his 
wallet the picture of one of the coal miners who died, which 
had been given to him by one of the coal miner's children.
    So who knows what it is that passes bills and does not pass 
bills. An endless amount of time helps. We never have that, 
because the world is in such crisis. Things are happening so 
disastrously and so unhealthfully. We have to do it as best we 
can.
    CHIP is something we can do. CHIP is something we have to 
do. I just encourage all of us to think about children, about 
the problems they face, and about our responsibility to help 
them navigate their way through those waters.
    I thank all of you for your courtesy in coming, and I wish 
all of us well on the legislation.
    The hearing is adjourned.
    
    [Whereupon, at 4:48 p.m., the hearing was concluded.]
    
                            A P P E N D I X

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