1. T H E I M P A C T O F T H E C H I L D R E N ’ S H E A L T H I N S U R A N C E
P R O G R A M ( C H I P )
P R E S E N T E D
B Y
E R I C B E N J A M I N
W A L D E N U N I V E R S I T Y
1 9 T H O C T O B E R , 2 0 1 4
COMMUNICATING THE IMPACT OF CURRENT
AND EMMERGING POLICIES:

2. OUTLINE:
• Introduction
• Overview of policy topics
• Policy impact on health coverage of children
• Policy impact on scope of benefits/financial protection
• Policy impact on children’s access to care & use of
services
• Policy impact on children’s performance
• Conclusion
•References

3. Introduction:
There has been argument on what might be the health implications of the State Children’s
Health Insurance Program (CHIP) expansion policy. Hence, this paper presentation is
aimed at highlighting on the impact of current and emerging policies on the State CHIP.
Also, considering the difficulty to separate the impact of CHIP alone, this analysis will
co-examine the impact of both CHIP and Medicaid programs. According to the Henry J.
Kaiser Family Foundation (2014), several studies found that due to changes in family
income, children inter-switch between programs (CHIP & Medicaid) thus making it
difficult to access impact independently.

4. Structure:
• The State CHIP was created in 1997 by congress as a $40 billion block grant program
to provide insurance coverage to uninsured children under low-income but, whose family
income exceeds the Medicaid threshold in their state. CHIP was made optional hence,
enabling all states to participate. The policy made it easy for states to design their CHIP
programs to ensure streamlined eligibility and effective enrollment systems for optimum
outreach. As at 2010, 17 states had separate program, 12 had Medicaid expansion
program, while 21 had a hybrid program. Since inception, CHIP has been extended
severally with funding at the federal level except the extension to 2019 by Affordable
Care Act which limited funding to 2015 (Teitelbaum & Wilensky, 2013, P. 198).
Financing:
• Funds were disbursed on federal-state match basis at 65-85% depending on the
proportion of low-income uninsured children, general number of low-income children
and healthcare costs relative to other states. However, in order to allow for predictable
budgeting and state program expansion accountability, the reauthorized CHIP policy
annulled the funding formula. The new financing law required that funding be based on
previous CHIP expenditure rate and will last for two years. Hence, enable annual
increase in funding and account for growth in healthcare expenditure and create room for
program expansion for more children in the state. It also addressed the old problem of
returning unused fund to federal treasury by the state; thus eliminating the dependency of
state on redistributed fund to maintain its CHIP. (Teitelbaum & Wilensky, 2013, P. 198).

5. Overview cntd.
Funding:
• On the inception in 1997 $40 billion was allotted to CHIP as a 10-year block grant program.
Under the reauthorized CHIP in 2009, $33 billion was additionally allotted which saw the
program through 2013 (Teitelbaum & Wilensky, 2013). However, the Affordable Care Act
(ACA) extended CHIP funding to 2015 fiscal year with just 23 percentage point increase in
CHIP matching rates from 2016-2019 fiscal year depending only on subsequent extension of
CHIP. This decision unless reversed by the Congress before the end of 2015, may have grave
funding effect on the uninsured eight million low-income children (The Henry J. Kaiser
Family Foundation, 2014).
Benefits:
• The initial policy mandated state CHIP programs to include- basic inpatient/outpatient
services such as: surgical and medical services, laboratory and x-ray services, infant care and
age-based immunizations. However, more essential services have been included by the
reauthorized policy CHIPRA. For instance dental coverage for eligible but uninsured
children, prescription drug coverage, mental health services, optical services, and hearing
services. Certain standards where to be observed in designing their CHIP services-approval
by HHS secretary, availability to state employees, consider the HMO insurance plan and
more (Teitelbaum & Wilensky, 2013).

6. Overview contd.
Cost-sharing:
• CHIP does permit cost-sharing but with restrictions. For instance, under CHIPRA the
unused CHIP funds are converted to Medicaid performance bonuses for increased
enrollment and outreach. It also permitted states to implement enrollment simplification and
outreach policies. In this approach, states could impose cost-sharing requirements as a
disincentive to revert to CHIP (Teitelbaum & Wilensky, 2013).

7. Policy impact on health coverage of children
• Research reports have it that:-
• About 37% of the uninsured children in U.S. are now covered reducing the percentage
from 14% to seven percent
• The retention rate differs at state levels with three-quarter of the eligible children
maintaining their CHIP enrollment status
• Among the children covered, 52% are Hispanics and 56% are Blacks contrary to 26%
Whites and 25% Asian children
 From the above data two points can deduced. First the Medicaid and CHIP expansion
program had a significant impact in reducing the population of uninsured children by
half. Indicating that millions out of the uninsured 8 million as at 2009 have been covered.
Secondly the significant variation among racial groups indicated that the decline
concentrated much on the Hispanic and Black population; which is also a pointer that
both are the most uninsured group (The Henry J. Kaiser Family Foundation, 2014).

8. Policy impact on scope of benefits/financial protection
• A study correlated the effect of out-of-pocket medical spending for low-income children
with Medicaid/CHIP spending, found that out-of-pocket cost for a year would risen from
$42-$314 as opposed to spending on their behalf by CHIP/Medicaid from $909-$1,247
• A comparison study on coverage that were to be offered by separate CHIP programs and
Qualified Health Plans (QHP) in 2014 found that premiums, deductibles and cost-sharing
were consistently lower for CHIP
• Another study of comparison between CHIP and QHPs in Arizona where 14,000 children
missed coverage in 2014, found that higher limitation to benefits imposed by QHPs is
likely to subject low-income children to chronic health care condition as their families
might be unable to afford out-of-pocket cost
 The distinction above is made possible by the co-pay flexible plan. The CHIP plan so
made it easy for legible families to pay just 5% out-of-pocket cost of their income
including premiums (The Henry J. Kaiser Family Foundation, 2014).

9. Policy impact on children’s access to care and use of services
• Various research report reveal that enrollment with CHIP and Medicaid increased access
to primary and preventive care; thus reducing use of emergency unit
• A study in New York proved that participation in Medicaid/CHIP eliminated racial pre-
existing disparities in access and unattended needs
• A report of CHIP evaluation within congressionally-mandated region proved that nine out
of ten studies presented with 50% reduced rate of unattended needs
• According to federal data the average percentage of Medicaid/CHIP children who
attended primary care in 43 states in 2012 fiscal year was 97%
• A study in 2009 compared the dental cost for children with Medicaid/CHIP and children
with private coverage and found a significant contrast- $53 and $327 respectively
• A study also in 2008, found that 28% of Medicaid/CHIP children visited Emergency
Department at least once against15% of uninsured and privately insured children combined
 Although there has been a few contradictory research data on access to specialist care
among children with Medicaid/CHIP, the above data indicate that the Medicaid/CHIP
expansion policy had a positive impact on low-income children with Medicaid/CHIP
coverage; especially in New York where racial/ethnic disparity in access pre-existed (The
Henry J. Kaiser Family Foundation, 2014).

10. Policy impact on children’s performance
• In a study of Oregon’s Healthy Kids program, more parents testified to improved general
health of their children after 12 months participation in the coverage program but, non for
those less than 12 months
• Another study reported 3% reduction in mortality rate out of 10 percentage point increase
in Medicaid/CHIP eligibility
• In another 10 percentage point increase in Medicaid eligibility, there was 5% reduction in
high-school drop-out rate, 1.5% increase of college enrollment, and 3.5% increase in four-
year college completion
• Report have it that eight in ten low-income non Medicaid/CHIP partisan parents have
been encouraged to enroll their children with coverage need
 Notwithstanding the fact that there are discrepant results on the impact of
Medicaid/CHIP expansion policy on the outcome of health care; the above data proves that
the expansion policy have been effective in advancing the end goal of both programs. As
evidenced by the Oregon’s case, more time is needed for coverage to manifest more
positive result and eliminate discrepant research results (The Henry J. Kaiser Family
Foundation, 2014).

11. Conclusion
 The CHIP/Medicaid program has from all indication of health coverage, financial
protection, increased access to health care, and positive outcome improved the general well-
being of millions of American children. The improvement is a determinant factor of the
children’s long-term sustainable health, as well as the economic productivity of the general
society (The Henry J. Kaiser Family Foundation, 2014).

12. References
Teitelbaum, J. B., & Wilensky, S. E. (2013).Essentials of health policy and law (2nd ed.).
Burlington, MA: Jones & Bartlett Learning
The Henry, J. Kaiser Family Foundation (2014). The impact of children’s health insurance
program (CHIP): What does research tell us? Retrieved from http://kff.org/medicaid/
uninsured