Members of Congress have recently stated that the proposed reduction to the federal Medicaid program will not jeopardize the health and well-being of our nation’s children because the Children’s Health Insurance Program (CHIP) will “take care of them.” While there have been many statements made throughout the current health care debate, it is hard to imagine one more erroneous than this one. Therefore, we are offering a quick bird's eye view of what the CHIP program is and what it isn’t, and allow some simple comparisons to disprove such fallacies.
While it is true that CHIP sounds like and is, in fact, a federal health insurance program for children and youth, it is a misstatement to equate it to Medicaid. CHIP is a joint federal-state program that provides health coverage to low-income, uninsured children with family incomes too high to qualify for Medicaid but too low to afford coverage through the private market. By design, therefore, CHIP is a much smaller insurance program than Medicaid as it was intended to capture a much smaller group of vulnerable children. For example, in the fiscal year, 2015 CHIP covered 8.4 million children while in the same year Medicaid covered 81million.
Unlike Medicaid, CHIP offers states greater flexibility in creating their programs. Under CHIP, states can, for example, establish different qualifying standards that either allowed more or fewer children to be enrolled. For example, a child living in North Dakota qualifies for the CHIP program if their family lives at or below 170% of the federal poverty line (FPL); whereas, in New York, children and families living up to 400% of the FPL may qualify.
Additionally, CHIP programs often have limitations put on them intended to reduce enrollment unlike Medicaid, which as an entitlement, must enroll those who qualify and offer a defined benefits package. Examples of how states have used their flexibility in CHIP include enacting waiting lists, increasing cost sharing through higher premiums, and limiting benefit packages.
So how is it possible that in the absence of the existing Medicaid program CHIP would simply “take care” of the kids? It can’t and it won’t. Lawmakers who continue to make such false statements are hoping that we will be fooled by a name. Now you won't.