GAO: How well do exchange plans serve kids?

She might be better off with CHIP. She might be better off with CHIP.

Funding for the Children's Health Insurance Program (CHIP) is set to run out Sept. 30, 2015 -- at the end of federal fiscal year 2015.

Some policy watchers have suggested that the existence of the Patient Protection and Affordable Care Act (PPACA) Medicaid expansion program and the start of the PPACA public exchange system might reduce or eliminate the need for CHIP coverage.

The thought is that Medicaid will cover more low-income children, and public exchange plans will be available to the families of the moderate income children.

Advocates for people with disabilities and chronic health problems have mostly favored putting the people they represent in a program that covers the general population, not a program for people with specialized health care needs. Representatives for people with health problems have argued that those people tend to get better coverage in programs aimed at the general population than in specialized programs.

Some advocates for children say that the opposite may be true for children, and that children may be better off staying in CHIP plans than in moving to exchange qualified health plans (QHPs).

The U.S. Government Accountability Office (GAO) looked into that matter for a House Energy and Commerce subcommittee. Carolyn Yocum, a GAO director, testified at the hearing that the GAO found some advantages to keeping children in CHIP plans.

For more about her testimony, read on. 

Baby

1. Exchange plans often have much higher out-of-pocket costs.

When GAO investigators looked at QHPs with subsidy levels geared for families with moderate income levels, they found that the QHP premiums were considerably higher than typical CHIP premiums for the same families, and that out-of-pocket costs were much higher.

Families of most CHIP enrollees in the five states the GAO studied were paying less than $200 per year for the premiums.

The families would have to pay at least $471 in premiums for QHP coverage, even with subsidies, Yocum said.

See also: 3 important health enrollment findings

Girl

2. Children may have an easier time qualifying to get CHIP coverage with an affordable premium.

Many moderate-income children have a parent who is eligible for self-only coverage.

Those children could usually qualify for CHIP coverage, but, because the Internal Revenue Service bases decisions about whether a family has access to affordable coverage on whether at least worker in the family has access to affordable self-only coverage at work, the children would not qualify for PPACA QHP subsidies, Yocum said.

See also: Will regs create a dependent mini med market?

Boy

3. Children in CHIP may be more likely to have dental coverage.

CHIP covers dental services.

A QHP is supposed to cover dental services for children, but many state exchanges set up coverage in such a way that the QHPs do provide dental coverage themselves. The parents can buy dental coverage.

In practice, in many cases, the children do not end up with dental coverage, either because the families do not know they must add on dental coverage, or because the families cannot afford the dental coverage premiums, Yocum said.

See also: Dental insurers fight for D.C. niche

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