CHIPRA Mandated Evaluation of the Children's Health Insurance Program: Final Findings. X. Implications of Health Reform for CHIP Programs and Families



  • CHIP is currently funded through September 2015 and authorized through September 2019; current law prohibits states from lowering eligibility thresholds for children in Medicaid and CHIP below March 2010 levels throughout the authorization period.
  • Given the uncertainty about continued federal funding for CHIP after 2015, CHIP administrators expressed concern for CHIP’s future, but most had not made contingency plans as of early 2013.

After the Affordable Care Act became law in March 2010, the contextual environment for state CHIP programs changed substantially and the evaluation sought to understand the implications of this major legislation for state CHIP programs and for children’s health coverage overall. In addition to broader system-wide reforms, the Affordable Care Act includes several elements specific to CHIP. It authorized CHIP through September 2019, extended funding for the program through September 2015, and required states to maintain at March 2010 levels the minimum income eligibility thresholds for children in Medicaid and CHIP throughout this period (Table X.1). Although funding for CHIP after September 2015 is not assured, the Affordable Care Act specifies an increase of 23 percentage points in federal financial participation for CHIP from FFY 2016 through FFY 2019.

Table X.1.

Key Affordable Care Act Provisions Affecting CHIPa
Requires states to develop automated and streamlined eligibility systems that integrate eligibility determinations for Medicaid, CHIP, and health insurance Marketplace plans.
Requires that CHIP enrollees in families with income below 133 percent of FPL be transitioned to Medicaid, and b establishes a new Medicaid eligibility option for adults with income below the same level.
Allows states to cover children of public employees in CHIP if states can demonstrate minimum state agency contributions or hardship.
Creates a new definition of income—modified adjusted gross income (MAGI)—that states must use to determine eligibility for non-elderly Medicaid and CHIP beneficiaries except the blind and disabled and for government subsidies provided to qualified individuals for the purchase of coverage through the Marketplace beginning in 2014. Also changes household composition rules used for determining income eligibility. These changes may lead to some children now in Medicaid moving to CHIP and some now in CHIP moving to Medicaid.
Requires states to eliminate any remaining asset tests for the populations subject to MAGI eligibility determinations (essentially, those who are not age 65 or older, blind, or disabled), and replace any previously existing income disregards used in computing income eligibility for that population with a standard 5 percent income disregard in cases where income would otherwise exceed the eligibility threshold.
Increases the federal match rate for CHIP during the period of funding uncertainty—when MOE requirements are still in effect (FFY 2016–2019)—to an average amount of 93 percent in each state.
Requires children to have coverage in order for their parents to be eligible for coverage under the new adult expansion group, which may increase children’s enrollment in Medicaid and CHIP, and expands coverage options for parents, which may have similar effects on children’s coverage.
Requires that the Secretary of the U.S. Department of Health and Human Services certify Qualified Health Plans comparable to CHIP.

a Many other Affordable Care Act provisions related to Medicaid will directly influence states with Medicaid expansion CHIP programs and indirectly influence separate CHIP programs. These provisions include requirements to cover new benefits (such as tobacco cessation services for pregnant women) or providers (such as freestanding birth centers), a temporary increase in Medicaid reimbursement rates for primary care services in 2013–2014; and enhanced federal funding for providing health home services (such as comprehensive care management) to beneficiaries with chronic diseases.

b The Affordable Care Act legislation also specifies that a 5 percentage point income disregard be applied in computing MAGI-based income for those who would not meet the income threshold without this disregard , so the effective income threshold in these cases is actually 138 percent of the FPL. More than half of states already covered all children below this income threshold in Medicaid.

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