By We gave you a detailed run down of the stability protections in a report we did a few months ago. Here is a quick refresher: the stability protections were first included in the Recovery Act, and then expanded in the Affordable Care Act to include CHIP as well. They prevent states from rolling back eligibility and enrollment procedures in Medicaid and CHIP. They don't prevent states from tackling their Medicaid budgets through other means, such as delivery system reform, benefit changes, and provider reimbursement cuts. For most people the protections are in place until health reform is up and running on January 1, 2014 (or potentially earlier if you are from an over-achieving state), but for children they continue through 2019.
The purpose of the stability protections is to hold coverage steady for children and families struggling to gain solid footing after turbulent economic times, as well as for senior citizens unable to care for themselves in their own homes and people with disabilities who need help with long-term care and other health services. If the Hatch bill becomes law, states would be able to cut back on coverage by reducing eligibility or, in CHIP, setting up waiting lists for care. Even those who remain eligible for coverage would be vulnerable to cuts through "backdoor" strategies. States would be free to reinstate roadblocks to coverage to discourage eligible people from enrolling, such as face-to-face interviews or burdensome and unnecessary paperwork requirements.
From a child health perspective, one particularly disturbing aspect of the Hatch bill is its impact on CHIP. When evaluating the legislation, the Congressional Budget Office estimated it would reduce federal spending by $2.8 billion over five years (fiscal years 2012 - 2016) and $2.1 billion over ten years (fiscal years 2012 - 2021). But, these overall figures mask a bigger and more troubling story. Without the stability protections, CBO assumes that many states will dramatically scale back their CHIP programs (and perhaps some might eliminate them all together), causing federal CHIP spending to contract by $6.5 billion over the 2012 - 2016 period and by $8.8 billion between 2012 and 2021. These federal savings will be largely offset by new costs the federal government will face when many of these kids move into subsidized Exchange plans. Others will move to employer-based coverage or, most alarmingly, become uninsured.
By introducing this bill, Senator Hatch appears to have re-opened - perhaps inadvertently -- the question of whether CHIP should be dissolved in the context of health reform. This is an issue that was actively debated during the ACA legislative process, and it was settled that CHIP (and Medicaid for children) should continue through at least 2019. The major argument for keeping Medicaid and CHIP stable and secure for children was that these programs already had led to record-breaking success in covering children. It seemed reckless and unnecessary to dismantle something that was working well, at least until it was clear that state-based exchanges could offer children coverage of the same quality and affordability.
As for its prospects, I can see Hatch's bill easily passing the House. In the Senate, however, its prospects are much weaker. Senator Hatch has not yet secured any Democratic co-sponsors for his legislation. There may be little appetite among Senators who have a long track record of protecting children's coverage for undermining the stability of Medicaid and CHIP coverage and weakening the country's commitment to children and families. Luckily and presumably not coincidentally, voters share this outlook. As our friends at First Focus recently documented, voters are concerned that children's lives have gotten worse rather than better in the last 10 years (by a 3-1 margin). They want us to do more, not less, for our children and are against cuts to CHIP by a 73-23 percent margin.
Unfortunately, though, this is just one of many bad ideas floating around Congress that would harm children who secure coverage through Medicaid and CHIP. But, for the next round of bad news, you'll need to wait for my colleague, Joan Alker, who will soon be blogging on the implications of a global spending cap on children.
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