POLICY STATEMENT

Children’s Health Insurance Program (CHIP):Accomplishments, Challenges, and PolicyRecommendations

abstractSixteen years ago, the 105th Congress, responding to the needs of 10million children in the United States who lacked health insurance, cre-ated the State Children’s Health Insurance Program (SCHIP) as part ofthe Balanced Budget Act of 1997. Enacted as Title XXI of the SocialSecurity Act, the Children’s Health Insurance Program (CHIP; or SCHIPas it has been known at some points) provided states with federalassistance to create programs specifically designed for children fromfamilies with incomes that exceeded Medicaid thresholds but thatwere insufficient to enable them to afford private health insurance.Congress provided $40 billion in block grants over 10 years for statesto expand their existing Medicaid programs to cover the intendedpopulations, to erect new stand-alone SCHIP programs for these chil-dren, or to effect some combination of both options. Congress reau-thorized CHIP once in 2009 under the Children’s Health InsuranceProgram Reauthorization Act and extended its life further withinprovisions of the Patient Protection and Affordable Care Act of 2010.The purpose of this statement is to review the features of CHIP as it hasevolved over the 16 years of its existence; to summarize what is knownabout the effects that the program has had on coverage, access, healthstatus, and disparities among participants; to identify challenges thatremain with respect to insuring this group of vulnerable children, in-cluding the impact that provisions of the new Affordable Care Act willhave on the issue of health insurance coverage for near-poor childrenafter 2015; and to offer recommendations on how to expand andstrengthen the national commitment to provide health insurance toall children regardless of means. Pediatrics 2014;133:e784–e793

LEGISLATIVE BACKGROUND AND EVOLUTION OF THE CHILDREN’SHEALTH INSURANCE PROGRAM

The Children’s Health Insurance Program (CHIP) emerged as a conse-quence of previous policy experiences and political realities thatcharacterized the late 1990s. The combination of successful Medicaidexpansions in the late 1980s and early 1990s and the failure of theClinton health reform proposals of the mid-1990s prepared the stagefor both Democrats and Republicans to cooperate in fashioning anextension of health insurance for 10.1 million uninsured near-poor

COMMITTEE ON CHILD HEALTH FINANCING

KEY WORDSChildren’s Health Insurance Program, CHIP, Affordable Care Act,health insurance, pediatrics

ABBREVIATIONSAAP—American Academy of PediatricsACA—Patient Protection and Affordable Care ActCHIP—Children’s Health Insurance ProgramCHIPRA—The Children’s Health Insurance ProgramReauthorization Act of 2009

This document is copyrighted and is property of the AmericanAcademy of Pediatrics and its Board of Directors. All authorshave filed conflict of interest statements with the AmericanAcademy of Pediatrics. Any conflicts have been resolved througha process approved by the Board of Directors. The AmericanAcademy of Pediatrics has neither solicited nor accepted anycommercial involvement in the development of the content ofthis publication.

The guidance in this statement does not indicate an exclusivecourse of treatment or serve as a standard of medical care.Variations, taking into account individual circumstances, may beappropriate.

All policy statements from the American Academy of Pediatricsautomatically expire 5 years after publication unless reaffirmed,revised, or retired at or before that time.

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children that would not establish a newentitlement program.1 The resultinglegislation, Title XXI of the Social Secu-rity Act (42 USC 7, xx1397aa–1397mm),inserted a provision into the BalancedBudget Act of 1997 (Pub L No. 105–33,111 Stat 251) that encouraged states toestablish programs to provide healthinsurance to noncovered children wholived in families with incomes up to200% of the federal poverty level. Theact incorporated specific design ele-ments that made it more attractive tostate governments, which would beara large responsibility for its imple-mentation. Using a level of federalmatching funds in excess of that pro-vided to the Medicaid program (70% ofthe cost of the program, on average,compared with 57% for Medicaid),2

states were enabled to craft programsthat were either extensions of theirexisting Medicaid programs or newstand-alone programs or a combinationof both.3 The stand-alone programswere permitted to include cost sharingand premiums, and their benefit pack-ages could differ from what was avail-able in Medicaid, whereas the Medicaidextension programs were required toadhere to the traditional Medicaidpackage.

The new legislation budgeted $40 billionfor the 10 years of the program asa capped block grant to states ratherthan as an entitlement. To prevent statesfrom shifting children from Medicaid toa program with greater federal costsharing, the law mandated a mainte-nance-of-effort obligation and strictscreening of Medicaid eligibility. To dis-courage crowd-out from the commercialinsurance pool, the law also limitedavailability of the program to individualswithout other forms of potential cover-age and imposed waiting periods beforepatients could access the program afterlosing private coverage.4

As states were establishing their pro-grams in the early years of CHIP, the

federal allotments exceeded stateexpenditures. By 2000, however, everystate and territory as well as the Dis-trict of Columbia had established itsown program, so that by the middlepart of that decade, states were be-ginning to find that their expenditureswere outstripping the federal blockgrants allocated to them. To remedysuch shortfalls in 2006 and again in2007, Congress appropriated increasedfunds for the program above theoriginal 1997 allocation.

At the 10-year mark, despite consid-erable progress in coverage for near-poor children, CHIP continued toconfront 3 issues: provision of suffi-cient financing for the states to meetthe needs of the intended population;adequate outreach, enrollment, andretention efforts for eligible children;and a perceived need to focus more onaccess and the quality of care forthose covered.5 The 110th Congressattempted to reauthorize the programin 2007, but despite passage in bothhouses of Congress, the legislationwas twice vetoed.6 In the absence oflong-term funding, the Medicare,Medicaid, and CHIP Extension Act of2007 (Pub L No. 110–173) was enactedto appropriate funds at the 2007 levelto cover the costs of the program for2008 through March 31, 2009.7

After the 2008 presidential elections,the new administration set the exten-sion of CHIP as an important earlylegislative priority. President Obamasigned the Children’s Health InsuranceProgram Reauthorization Act of 2009(CHIPRA; Pub L No. 111-3) into law onFebruary 4, 2009,8 with several specificpolicy goals in mind. The law increasedappropriations for the program in ac-knowledgment of the shortfalls thatstates had been experiencing underthe previous funding levels and ex-tended the life of the program through2013. In addition, it included a numberof funding mechanisms, such as

Express Lane eligibility and state bonusesfor reaching enrollment goals that wereintended to extend Medicaid and CHIPcoverage to millions of additional un-insured children and to increase out-reach to many who lacked coveragedespite being eligible for these pro-grams. Finally, it improved benefits, en-hanced data collection, and created anew emphasis on measuring the qualityof care children received.9

One year later with the passage of thePatient Protection and Affordable CareAct (ACA; Pub L No. 111–148 [2010]),10

other modifications of CHIP cameonline: in particular, the ACA extendedthe funding for CHIP by another 2 years,through September 31, 2015. In addi-tion, because the ACA enabled all citi-zens younger than 65 years withhousehold incomes less than 133% ofthe federal poverty level ($31 322 fora family of 4 in 2013, to which a 5%income disregard will be applied whenconsidering eligibility)* to become eli-gible for Medicaid effective January2014 (if, in view of the June 2012 Su-preme Court decision, their state ofresidence agrees to participate in theMedicaid expansions),11 the ACA antici-pated that some children older than 6years previously covered by a stand-alone CHIP plan would transition intoMedicaid. In such cases, the ACAprovides states the enhanced CHIPmatching rates for those individuals.Furthermore, beginning in fiscal year2016, the federal CHIP matching rate isslated to increase by 23 percentagepoints to an average of 93%. Finally,

*To determine income eligibility for Medicaid un-der the ACA, the statute references an individual’smodified adjusted gross income and adds a stan-dard 5% “income disregard,” making the effectivethreshold for eligibility 138% of the federal pov-erty level. See “Determining Income for AdultsApplying for Medicaid and Exchange CoverageSubsidies: How Income Measured With a Prior TaxReturn Compares to Current Income at Enroll-ment” from The Kaiser Family Foundation Focus onHealth Reform at http://www.kff.org/healthreform/upload/8168.pdf.

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although the ACA extended authorityfor CHIP through 2019 and includedmaintenance-of-effort requirements foreligibility, identification, and enrollmentof children in Medicaid and CHIP throughthat time period, it provided federal CHIPallotments to finance the program onlythrough fiscal year 2015.12

ACCOMPLISHMENTS OF CHIP

Insurance Coverage

Incontrovertible evidence demonstratesthat the CHIP program increasedinsurance coverage to its intendedpopulation above what it would havebeen in the absence of the program(see Fig 1). Although at the time ofCHIP’s enactment in 1997, states al-ready had, under the existing Medic-aid program, the option of expandingcoverage for children in families up to200% of the federal poverty level, only6 states had availed themselves ofthis opportunity.13 From the enact-ment of CHIP in 1997 to 2011, enroll-ment has grown from under 1 millionto 5.3 million children.14,15 Further-more, the enactment of CHIPRA hashad important spillover effects on theenrollment of eligible children intoMedicaid so that the combined impacton the rate of uninsurance amongchildren has been significant.16

Although the percentage of US childrenwith private employer-sponsored healthinsurance decreased from 66.2% to53.0% over this time, the proportioncovered by public insurance, includingMedicaid or CHIP, increased from 21.4%to 42.0% so that the total percentage ofuninsured US children decreased from13.9% to 6.6% at a time when theuninsurance rates among adults wereincreasing.17,18 Moreover, the reductionsin uninsurance were concentratedamong the population of children infamilies at or below 200% of the federalpoverty level. The percentage of chil-dren covered by employer-sponsoredinsurance in this group fell from34.4% to 24.9%, whereas the percent-age of those on Medicaid or CHIP in-creased from 41.3% to 60.4% so thatthe uninsurance rate among thesechildren decreased from 24.6% to15.3% over this period.17 Beyondextending coverage to more children,specific provisions in CHIPRA made itmandatory for stand-alone CHIP pro-grams to include dental coverage forchildren (section 2103[c]5)19 and tocover mental health services and sub-stance abuse services on parity withmedical and surgical coverage.

Even subsequent to the 2008 recession,CHIP continues to increase its enroll-ment, although at a slower rate than

before. Some have speculated that thisslowdown is partially attributable to themigration of some children from CHIP toMedicaid as parents have lost employ-ment.15 How much of the decline inprivate insurance coverage can be at-tributable to enrollment in the CHIPprogram has generated intense debatein the “crowd-out” literature, but a re-cent review of the evidence noted thatonly 4 of 22 pertinent studies examinedfound statistically significant crowd-outeffects.20 Among those who did findevidence of crowd-out, the magnitude ofthe estimates varied widely from 0% to50% depending upon the underlyingassumptions of their statistical model.21

Access to Care

For children enrolled in CHIP programs,most researchers, with occasional dis-senting voices,22 have found that accessto care and utilization of primary andpreventive care appear to improve afterenrollment.20 Although methodologicchallenges abound in trying to arrive atrobust estimations in this regard,23

evaluations conducted in individualstates24–26 or across combinations ofstates16,27 have found, in general, thatenrollees report improvements in hav-ing a usual source of care, in complet-ing visits to physicians or dentists, andin having fewer unmet health needsafter enrollment. Furthermore, someobservers cite evidence indicating thatracial/ethnic disparities in access andutilization detectable among new CHIPparticipants before they enrolled wereeither eliminated or greatly reducedafter enrollment.28 Other researchershave reported that the benefits of CHIPenrollment with respect to reductionsin unmet needs are greater for childrenwith chronic health conditions.29 Finally,older children (older than 13 years)from low-income families who had notbeen eligible for public health in-surance coverage before the enactmentof CHIP appear to have had dispropor-tionately greater increases in the

FIGURE 1Health insurance rates for children in the United States, 1997–2012. Source: National Center forHealth Statistics, 2013.18

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likelihood of a physician visit andgreater declines in rates of unin-surance as a result of the enactment ofthis program, when compared withyounger children from poor and near-poor households.30

Health Status and Quality of Care

Unambiguous evidence of the effects ofCHIP on improvements in children’shealth status as measured either bymortality rates, morbidity, improvedfunctional status, or parent-reportedhealth assessment is more difficultto substantiate for a variety of rea-sons.23 Some of the studies31,32 reportedbenefits of improved publicly fundedhealth insurance lump effects ofMedicaid with those of CHIP, eventhough they apply to different pop-ulations and may have been studied indifferent time periods. Despite thesecaveats, there are suggestions that en-rollment in CHIP may have had positiveeffects on certain measures of healthand well-being among participants.33,34

Finally, over and apart from the directeffects that CHIP has had on the access,utilization, and health status of near-poor children, the provisions in CHIPRAthat focus on the quality of caredelivered to children are of signal im-portance. A major innovative element ofCHIPRA was the incorporation of qualitychild health measurement standards,monitoring capabilities, and reportingrequirements for states in section 401aof the statute.35 The legislation estab-lished a mechanism by which the Cen-ters for Medicare and MedicaidServices collaborated with the Agencyfor Healthcare Research and Quality toidentify an initial core set of childhealth quality measures on whichstates could voluntarily agree to re-port.35,36 CHIPRA also allocated a total of$100 million in awards to 18 states toencourage creation of quality demon-stration projects. Since the law’s en-actment, the US Department of Health

and Human Services has been requiredto report on the quality of care re-ceived by children covered by Medicaidand CHIP.

PROBLEMATIC ISSUES FOR CHIP

CHIP and the ACA

Whereas it is important to acknowl-edge the signal achievements of theACA in extending health insurancecoverage, reforming practices in thehealth insurance market, and in-centivizing opportunities to moderatehealth care costs, it is equally neces-sary to be alert to aspects of the newlaw that raise concerns regarding thefuture of CHIP. Many of these concernsemerge only from a detailed un-derstanding of specific features of thelegislation and are outlined as follows:

� First and foremost is the questionof ongoing funding particularly inview of provisions of the ACA thatpreserve federal funding for CHIPonly through 2015. After this date,it is not certain whether the pro-gram will be continued or whethersome subset of children currentlycovered under CHIP who satisfyother eligibility criteria will beexpected to transition into the newhealth insurance marketplaces,whereas others will be left withoutcoverage entirely. This latter sce-nario may constitute an inferioroutcome, even for children who doqualify to be covered by the market-places. At least 1 comparative anal-ysis in 17 states found that thebenefits and cost-sharing levels inexisting CHIP programs were supe-rior to those in the marketplaces.37

� Second, initial experience withfederal- and state-sponsored insur-ance marketplaces suggest that net-work restrictions limiting access tochildren’s hospitals and certain sub-specialists constitute a significantcost-containment strategy in manygeographic areas. These restrictions

within the ACA framework are lessbeneficial to children compared withwhat they currently experience inCHIP.

� Third, the majority Supreme Courtdecision upholding the ACA butrendering state participation inthe new Medicaid expansions op-tional11 creates further inconsisten-cies that might leave certain poorolder adolescents ineligible for anypublic funding in states that refuseto accept the new Medicaid expan-sions.38 Even if the ACA is imple-mented such that all states opt toembrace the Medicaid expansions,a considerable number of childrenwill find themselves in situationswhere their coverage is with a pub-lic plan, whereas their parents ei-ther have no coverage because theydo not qualify for Medicaid underthe proposed expansions or havedifferent coverage from their chil-dren because they are in one ofthe marketplace plans, hence com-plicating coordination of benefitswithin the family.39

� Fourth, another distinct disadvan-tage for children under the ACAinvolves the calculation of eligibil-ity for premium tax credits underthe law. The Internal Revenue Ser-vice has ruled that those whosepremiums cost more than 9.5% oftheir gross adjusted income areeligible for tax credits from thefederal government, but only thecost of an individual policy is takeninto account in making this calcu-lation. Because family coverage ismore expensive than individualcoverage, parents with childrenmay find themselves paying morethan 9.5% of their income to obtaincoverage but being neverthelessineligible for these credits (a fea-ture known as the “kid glitch”).

� Fifth, although the ACA permitschildren up to the age of 26 years

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to remain on their parents’ poli-cies, this benefit does not extendto grandchildren (ie, children whomight be born to these youngadults).

� Finally, although provisions in theACA have made redistribution offunds among states more respon-sive to the differential shortfalls infunding that emerge across differ-ent states over time, the blockgrant nature of the CHIP makes itdifficult for all states to adjusttheir programs to the changingneeds and numbers of near-poorchildren. This situation could be-come critical if future economicdownturns render more familieseligible for a program that hasa cap on its total spending.

Enrollment and Retention

In addition to the concerns regardingfuture funding, the current programhas yet to address other issues of en-rollment and retention. There are nowestimated to be 7.7 million childrenenrolled in the CHIP program, of whom70% are in stand-alone programs.3

Despite the remarkable success ofMedicaid and CHIP at reducing unin-surance among children from low-income families, an estimated 7.5million children in the United States stillremain uninsured, of whom 60% to70% are thought to be eligible forpublic insurance of some kind.12 Iden-tifying those children and increasingthe rate at which they enroll in CHIP isan ongoing challenge for the program.For children who do enroll, the rate ofretention in the program is also lowerthan it might be. It was estimatedin 2008 that 26.8% of uninsured chil-dren had been enrolled in public in-surance the previous year, with 21.7%formerly enrolled in Medicaid and 5.1%enrolled in CHIP.40 Understanding thereasons for and consequences of thesedropouts, whether they result from

barriers associated with state enroll-ment and reenrollment policies, doc-umentation and related concernsamong immigrant parents of childrenborn in the United States, changes inemployment status, or other factors,should be a priority for the program.

Part of the advantage of CHIP has beenthe built-in flexibility it has affordedstates with respect to its imple-mentation, particularly among stand-alone CHIP programs rather thanpure Medicaid expansions. Becausestates have faced differential budget-ary constraints in the aftermath of therecent recession, having some leewayin how to structure benefits and seteligibility for near-poor children hasbeen a boon to policy makers facingdifficult fiscal choices at the state level.This sanctioned flexibility in the rate ofCHIP implementation, the degree ofcost sharing, the generosity of benefitpackages, and the extensiveness ofoutreach to those eligible but un-insured has, in turn, resulted in con-siderable state-to-state variation inretention rates and in the overallbenefit of the program. Provisions ofthe ACA will do little to modify theseoperational aspects of CHIP.

Physician Participation

The rates at which pediatricians havebeen willing to accept children coveredby public health insurance programshave declined in recent years as thepayment rates in these programs havegenerally deteriorated relative to ratesassociated with commercial plans. Arecent report by the Government Ac-countability Office summarizing a na-tional survey of pediatricians indicatedthat although 47% of those surveyedreported that they would accept allnew Medicaid or CHIP patients, thecomparable figure for privately in-sured patients was 79%.41 In thosestates that have CHIP arrangementsthat are Medicaid expansions (and

some states with a stand-alone CHIPprogram use Medicaid plans andpayment rates in CHIP), rates of ac-ceptance of CHIP patients and Medic-aid patients are highly correlated. Toattempt to address this concern, atleast in part, provisions of the ACA(x1202) require that, for primary careproviders, Medicaid payment rates beincreased to 100% of those availablethrough Medicare.22,42 The federalgovernment has issued a final rule,clarifying the following: (1) that thisinnovation applies to primary careevaluation and management (E&M)codes 99201–99499, including pediat-ric services that are not traditionallyprovided by Medicare practitioners;(2) that they apply to Medicaid man-aged care plans as well as traditionalfee-for-service arrangements; and (3)that they apply to services adminis-tered by or under the direction ofphysicians in primary care specialtiesor subspecialties.43 This ruling is im-portant especially because three-quarters of CHIP patients are enrolledin managed care plans3 and thepayment rates for participation inthese plans vary considerably on a re-gional basis. Most pediatricians are ina disadvantageous position when itcomes to negotiating payment rateswith large insurance companies thatcan be the sole payers in a specificgeographic locale. Less encouragingis the fact that the increase in theMedicaid fee structure to achieve par-ity with Medicare is time delimited andis due to expire after 2014.

Pediatric Providers and the Futureof CHIP

How pediatricians and pediatric sub-specialists respond to the incentivesprovided by CHIP is a critical consid-eration in evaluating the program’seffectiveness over time. Because pay-ments to physicians for patients en-rolled in CHIP are generally lower thanpayments received from commercially

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insured patients, the additional in-surance coverage that CHIP achievesmay result in access and utilizationimprovements for CHIP patients, which,although laudable, are smaller thanthey would be were payment rates inthis program commensurate withcommercial insurance. Indeed, someresearchers examining physician re-sponse to the program found that, al-though participation on the part ofpediatricians increased with CHIP’s in-troduction, the hours devoted to pa-tient care for all patients decreased,44

and the visits to physicians remainedunchanged.45 These empirical findingsindicate that rates of physician pay-ment for CHIP participants will con-tinue to influence how successfully theprogram achieves its articulated aims.To what extent these developmentshave implications for the growth of thepediatric workforce in the future isalso a matter of considerable impor-tance in the medium- to long-term.Disadvantageous payment rates cov-ering greater proportions of pediatricpatients may influence the decisions ofthose emerging from medical schoolwith significant financial obligations oftheir own to preferentially consideralternative fields of specialization.

CHIPRA and the ACA have made im-portant contributions to the ad-vancement of health care delivery tonear-poor children in recent years andhave the potential to accomplish moreso in years to come. Going forward,there is a series of issues that thepediatric community must continue tomonitor to preserve the advances thathave been made and to expand on themwhere possible. The ACA has mandatedthat income thresholds for CHIP are toremain constant through 2019 (al-though the federal government hasyet to appropriate funds for the pro-gram beyond 2015), but state-by-statevariability in cost sharing in theform of premiums, deductibles, and

coinsurance for CHIP stand-alone pro-grams will need to be minimized tomaintain true access to health careservices, especially to subspecialtycare. Pediatricians and families mustcontinue to assess vigilantly the com-prehensiveness of benefit packagesavailable under the program, becausethese features will also vary from stateto state. Policy makers will need to setpayment rates at adequate levels ifa significant proportion of the pediatriccommunity is to engage actively in thecare of CHIP enrollees. All those with aninterest in advancing child well-beingmust monitor closely eligibility andbenefits for emancipated minors, forchildren up to 26 years of age, for fosterchildren once they reach the age ofmajority, for children of undocumentedimmigrants, and other vulnerablepopulations. Finally, the relationshipbetween CHIP and the new health caremarketplaces must be clearly de-lineated to ensure that the benefits forchildren are maintained at least at thepresent level and that the needs ofchildren are not overlooked as thesenew structures are being created.

RECOMMENDATIONS

In view of the accomplishments of theCHIP program and the changing dy-namics in the health care landscape, theAmerican Academy of Pediatrics (AAP)makes the following recommendationswith respect to this program:

1. Fully fund CHIP through 2019.

� Extend the current appropria-tions formula beyond the 2015date to continue comprehensivefunding of CHIP through 2019.

� Support maintenance of effortfor eligibility thresholds and en-rollment and renewal proce-dures for children in CHIPthrough 2019.

� Maintain the enhanced feder-al matching rate for CHIP to

encourage states to take advan-tage of these funds.

� Continue the performance bonusesprogram beyond fiscal year 2013to encourage states to innovatewith respect to enrollment andretention policies.

� Maintain contingency funds forstates that experience fundingshortfalls.

� Strongly consider transformingCHIP from a block grant pro-gram to an entitlement for chil-dren in families with incomesless than 300% of the federalpoverty level with sliding scalesubsidies to eliminate the possi-bility of denial of coverage be-cause of state caps on spending.

2. Expand awareness of CHIP amongeligible families.

� Encourage state and local depart-ments of health to develop cul-turally appropriate written andWeb-based outreach materials fo-cused on families with incomesthat meet CHIP eligibility criteria,concentrating particularly on chil-dren with special health careneeds.

� Expand the availability of AAP-generated resources using plainlanguage principles,46 and part-ner with other public and privateorganizations to produce resour-ces that individual pediatricianscan use in their offices to en-courage families to enroll in CHIPprograms, when applicable.

3. Facilitate access to CHIP by eligiblechildren.

� Mandate all states to adopt au-tomatic coverage for newborns,and require or incentivize multi-year (5-year) continuous eligibilityin Medicaid/CHIP for newborns/infants.

� Mandate all states to adopt12-month continuous eligibility

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for children and pregnant womenin CHIP and Medicaid.

� Mandate all states to automati-cally enroll all children partici-pating in the SupplementalNutrition Assistance Programinto Medicaid or CHIP.

� Streamline CHIP enrollment andrenewal procedures by allowingself-declared income, usingpassive renewal procedures, eli-minating face-to-face renewalencounters, and improving com-munication with families regard-ing renewal procedures.

� Coordinate CHIP enrollmentefforts with community-basedprograms that work to enrolluninsured patients in Medicaid,new insurance exchanges, orother appropriate sources ofhealth insurance.

� Expand the use of technology tofacilitate enrollment and re-newal by the use of prepopu-lated forms and the expansionof Express Lane eligibility thatcoordinates enrollment in CHIPwith eligibility or enrollment inother public support programs,such as Temporary Assistancefor Needy Families (TANF), theSupplemental Nutrition Assis-tance Program, the Special Sup-plemental Nutrition Programfor Women, Infants, and Chil-dren (WIC), etc.

� Decrease or eliminate enrollmentfees and eliminate “lock-out”periods after disenrollmentfrom CHIP for failure to paypremiums.

� Eliminate waiting periods forenrollment into CHIP after lossof employer-based insurance.

� Encourage states to take advan-tage of the provision in ACA thatenables state programs to offerCHIP enrollment to children of

state employees who qualifyfor the program.

� Maintain eligibility levels andperformance bonuses for statesthat exceed CHIP enrollment tar-gets.

� Eliminate the discrimination againstundocumented children by allow-ing them access to the CHIP pro-gram if they meet other eligibilitycriteria.

� Encourage all states to take ad-vantage of the option to coverdocumented immigrant chil-dren through provisions in theImmigrant Children Health In-surance Act provisions of theCHIPRA legislation.

� Allow youth who are considered“lawfully present” under the De-ferred Action for ChildhoodArrivals (DACA) program toqualify for Medicaid, CHIP, ortax credits in the marketplace.

� Strongly consider allowing allchildren, “under color of law,”regardless of citizenship statusto enroll in CHIP.

� Extend Medicaid/CHIP coverageto age 21, and extend coverageto age 26 for children with spe-cial needs.

� Extend age-appropriate cover-age to infants of mothers whoare covered under the “age 26”provision.

� Auto-enroll youth leaving the ju-venile justice system into Medic-aid or CHIP, and extend coveragefor former juvenile justice youthup to age 26 to align with avail-able coverage for children agingout of the foster care system.

4. Work to reconcile stipulations inCHIPRA and the ACA.

� Eliminate “premium stacking”for families in states with sep-arate CHIP programs in which

parents are eligible to enterthe newly created marketplacesso that families whose adultmembers enter the marketpla-ces are not paying separate un-coordinated premiums for childrenand adults.

� Require the use of family, ratherthan individual, premiums forcalculating the percentage ofincome devoted to employer-sponsored health care insurancein determining who is eligiblefor premium tax credits underprovisions of x32B(c)2(C) of theACA; or alternatively, enable thesefamilies to choose CHIP to covertheir children.

� Eliminate the 4-week gap in cov-erage for children transitioningfrom CHIP to marketplace cov-erage.

� Work with states to addresschurning of children betweenplans by continuing 12-monthcontinuous enrollment and re-quiring insurers to allow contin-uation of a child’s medical homeirrespective of payer (see rec-ommendations on churning inthe Medicaid and CHIP Paymentand Access Commission’s March2013 Report to Congress, pages26–4347).

� Encourage all states to opt intothe Medicaid expansions avail-able through the ACA to covermore parents, thereby increasingthe likelihood that their childrenwill acquire health insurance.

� Allow special consideration to begiven to families with unique cus-tody circumstances, such asthose with parents who are en-rolled in marketplaces but whosechildren are eligible for CHIP, fam-ilies of foster children, or thosewith joint custody, nonparentalguardianship, or undocumented

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parents where knowledge of po-tential coverage options for chil-dren may be limited.

5. Maximize comprehensive coverageand affordability for children inCHIP.

� Require the adoption of state-level requirements that insur-ance packages contracted bystand-alone CHIP programs meetessential health benefits pack-ages that also adhere to BrightFutures guidelines48 with re-spect to the provision of primarypreventive, screening, diagnos-tic, interventional, subspecialty,dental, surgical, mental health,and palliative care and includeall benefits outlined in the AAPpolicy statement “Scope of HealthCare Benefits for Children FromBirth Through Age 26.”49

� Require/reinforce a defined den-tal, vision, mental health, andhabilitative service benefit forchildren.

� Require the National Associa-tion of Insurance Commissioners(NAIC) definition of habilitationas a required benefit for allplans.

� Collect information on compli-ance with parity in mentalhealth benefits in CHIP plans.

� Consider the extension of eligi-bility for the Vaccines for Chil-dren Program to all children innon-Medicaid CHIP programs inall states.

� Maintain the prohibition againstany cost sharing for preventivecare services, including immu-nizations, in stand-alone CHIPprograms.

� Prohibit the use of any cost-sharing arrangements in CHIPthat shift costs to pediatricians,hospitals, or other health careproviders.

� Strengthen and clarify trackingof all out-of-pocket paymentsacross medical and dental ben-efits in CHIP to ensure that fam-ilies do not pay beyond 5% ofhousehold income.

6. Support the quality measure-ment provisions incorporated intoCHIPRA.

� Establish incentives to encouragestates to report on the full coremeasure set, and eventually re-quire standardized reporting bystates of all quality measures inthe pediatric core set.

� Establish an advisory panel re-garding pediatric quality.

� Sustain and extend supportfor CHIPRA-funded Centers ofExcellence to develop pediatricmeasures.

� Analyze effectiveness of the pe-diatric electronic health recordformat and work to support thedevelopment of a unified pediat-ric electronic health record thatcould be widely adapted in mul-tiple practice settings.

� Encourage the development,dissemination, monitoring, andreporting on a set of child-specific quality measures be-yond the initial core set of 24metrics that will enable policymakers, practitioners, patients,and families to compare out-comes across practice settings,regions, and insurance plans.

� Allow CHIP case-mix calcula-tions for HITECH Act electronichealth records incentive pay-ments.50

� Support ongoing funding at theNational Institutes of Health andother federal agencies for thedevelopment, dissemination, im-plementation, and evaluation ofthese pediatric-specific qualitymeasures.

� Encourage specifically, direct com-parisons wherever possible inquality measures, outcome eval-uations, and cost-effectiveness be-tween CHIP enrollees and childrenwho end up enrolled in market-place insurance plans.

� Build on existing state demon-stration grants to continue andexpand a focus on quality out-comes at the state level.

� Work to sustain the Medicaidand CHIP Payment and AccessCommission (MACPAC) to ad-vance policy analysis and healthservices research as they applyto CHIP.

7. Ensure adequate payment forpractitioners who care for CHIPpatients.

� Require plans that contract withstand-alone CHIP programs tocover full costs of all new vac-cines effective on the publicationdate of recommendations by theAAP or the Centers for DiseaseControl and Prevention in theMorbidity and Mortality WeeklyReport (MMWR). Coverage andpayments must cover the costsof the vaccine adequately suchthat they include the total directand indirect vaccine expenseoverhead as well as the relatedimmunization administration ser-vice. Payment for the vaccineproduct should be at least125% of the current Centers forDisease Control and Preventionvaccine price list. Payment forimmunization administration mustbe at least 100% of the currentMedicare Resource-Based Rela-tive Value Scale (RBRVS) physi-cian fee schedule.

� To improve the adoption ofeffective medical home strate-gies by primary care pediatri-cians, require CHIP payers for

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stand-alone programs to in-clude payments for care coordi-nation, telephone consultation,case management, hospital tran-sition planning, and subspecialtycare coordination.

� Create and maintain funding mech-anisms to award achievementof recognized, evidence-based,outcome-driven quality-of-carestandards for CHIP enrollees.

� Extend Medicaid payment par-ity permanently and extendparity to all billable services,including specialists and sub-specialists.

CONCLUSIONS

Near-poor children in the United Stateshave derived enormous benefits from

CHIP since its inception 16 years ago.The reauthorization of this landmarksocial insurance program in 2009strengthened many of its most im-portant elements and added in-novative features that broadened itsreach. With the passage of the ACA, theapproach that the United States willadopt for this vulnerable segment ofthe pediatric population after 2015 isnow subject to some uncertainty.Whether CHIP proves to have beenan interim approach that is ultimate-ly replaced by universal coveragethrough a combination of Medicaid,employer-sponsored health insurance,and insurance exchanges or byadoption of a single-payer system orwhether CHIP endures in its currentform even after full implementation ofthe ACA, it is vital for the health of near-

poor children that the principles ofexpanded access, affordable coverage,generous benefits, and quality moni-toring be essential elements in theprovision of health care services nowand into the future.

LEAD AUTHORAndrew D. Racine, MD, PhD, FAAP

COMMITTEE ON CHILD HEALTHFINANCING, 2012–2013Thomas F. Long, MD, FAAPMark E. Helm, MD, MBA, FAAPMark Hudak, MD, FAAPAndrew D. Racine, MD, PhD, FAAPBudd N. Shenkin, MD, FAAPIris Grace Snider, MD, FAAPPatience Haydock White, MD, MA, FAAPMolly Droge, MD, FAAPNorman “Chip” Harbaugh, Jr, MD, FAAP

STAFFEdward P. Zimmerman, MS

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