Future of children's healthcare program already under debate

Though years away, the expiration of the popular Children's Health Insurance Program (CHIP) is already getting some attention on Capitol Hill.

It was just one line at the end of a long speech praising CHIP. But Sen. Max Baucus's (D-Mont.) comment this month that the popular initiative might assume "a different role" as healthcare reform evolves has raised the eyebrows of some children's welfare advocates, who fear that shifting kids to private exchange plans will hike costs and erode services.

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"If the exchange is as good as CHIP, then fine," said Bruce Lesley, president of First Focus, a children's welfare group. "But these plans are not going to be as strong as CHIP — there's no way."

In Baucus's comments, Lesley said, "I see flashing danger lights."

Sen. Bob Casey Jr. (D-Pa.) this week also warned of the potential dangers of eliminating CHIP.

"Children are not little adults," Casey said Friday in an e-mail. "They have their own unique health and healthcare needs. We bring children to see pediatricians because they are doctors that have the knowledge and expertise to treat children specifically; likewise, CHIP is a program built specifically for children."

It's not the first time the issue has surfaced. During the months-long debate over healthcare reform, Baucus, who chairs the Finance Committee, had initially proposed to eliminate CHIP, shifting those kids instead to either Medicaid or private plans on state-based exchanges. (CHIP, under Baucus's plan, would have remained as a secondary insurance option to cover services that exchange plans didn't.)

Meanwhile, House Democrats proposed to repeal CHIP altogether.

The Congressional Budget Office (CBO), at the time, estimated that the Senate proposal would push greater costs on affected families, leading some kids to lose coverage altogether.

"Some of those children," wrote CBO Director Douglas Elmendorf, "would be eligible for subsidized coverage in the exchanges but would not be enrolled in an exchange plan (owing at least in part to the higher premiums and higher out-of-pocket costs)."

The warning hasn't been tested. Instead, Sen. Jay Rockefeller (D-W.Va.) amended the Finance bill to extend CHIP's funding by two years, through 2015 — a provision that ultimately became law.

The timeline is already on Baucus's radar.

"In 2015, Congress will revisit CHIP in a new context," Baucus said last week during a speech marking the program's 13th anniversary. "CHIP has been instrumental in providing children with access to care where none existed before, but it may need to take on a different role as health reform is implemented."

A Finance aide said Friday that the remarks were not a reference to any specific proposal. Rather, "Baucus wants to ensure that as the new healthcare law is implemented, the CHIP program has the flexibility it needs to do whatever is best for the kids and families that rely on the program," the aide said in an e-mail.

"[H]e is keeping all options on the table for CHIP’s future."

Some kids' healthcare advocates support that plan. Tricia Brooks, health policy expert at Georgetown University's Center for Children and Families, said Friday that the program providing the coverage — be it Medicaid, CHIP or the exchange — is no matter as long as kids are getting the care they need.

"There are many paths to coverage," Brooks said Friday. "The important thing is that they serve kids well."

But Lesley argues that the costs and benefits of exchange plans under the reform law are already well-known — and they don't measure up to the benefits of CHIP plans.

"I don't necessarily know what people are waiting to see," Lesley said.

All sides of the debate agree that the 13-year-old CHIP program — which covers kids too wealthy to qualify for Medicaid, but not wealthy enough to afford their own health insurance — has been a boon for kids' health coverage, particularly in the recession.

Indeed, between December 2007, when the recession officially started, and December 2008, the number of uninsured adults rose by 1.5 million, while the number of uninsured kids fell by 800,000, according to the Kaiser Family Foundation. The difference is attributed largely to state efforts to maintain, and even expand, their CHIP programs, which currently cover more than 9 million kids and pregnant women.

"CHIP isn’t just a program that was built for children — it is a program that is working for children," Casey said Friday. The Pennsylvania Democrat had pushed a provision, passed in the health law, requiring the White House to certify which exchange plans offer pediatric coverage comparable to CHIP.

Still, supporters of repealing CHIP — a group that includes a number of liberal Democrats who once championed the program — argue the advantages of having parents and kids all covered under the same plan. They also note the inconvenience — not to mention the uncertainty — of having to renew the program every few years. Additionally, they hope to centralize control of CHIP, which is a block-grant program managed by state officials with powers to scale back coverage when budgets get tight.

"Families in the exchange or Medicaid will not have the same problems,” Rep. John Dingell (D-Mich.) said during the healthcare debate last year.

Other Democrats aren't so sure. Rockefeller, for instance, has made clear what he thinks about moving youngsters from CHIP to the exchange, "where they’re at the mercy," he said last year, "of people who will have them for lunch."

He was talking about private insurance companies.

"I don’t think there’s any reason," Rockefeller said, "to dismantle a program that works."