Estimates of Coverage Changes for Children Enrolled in Separate Children’s Health Insurance Programs in the Absence of Additional Federal CHIP Funding—Key Findings and Methodology

ABOUT THE URBAN INSTITUTE The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence –based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. ABOUT FUNDER/COPUBLISHER Add funder’s or copublisher’s boilerplate here if it is part of your contractual agreement. Use Boilerplate style. RESEARCH REPORT Estimates of Coverage Changes for Children Enrolled in Separate Children’s Health Insurance Programs in the Absence of Additional Federal CHIP Funding—Key Findings and Methodology Report to the Medicaid and CHIP Payment and Access Commission Lisa Dubay Matthew Buettgens Genevieve M. Kenney March 2015 HEALTH AND HEALTH POLICY ABOUT THE URBAN INSTITUTE The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. ABOUT THE FUNDER The Medicaid and CHIP Payment and Access Commission (MACPAC) is a non-partisan legislative branch agency that provides policy and data analysis and makes recommendations to Congress, the Secretary of the U.S. Department of Health and Human Services, and the states on a wide array of issues affecting Medicaid and the State Children’s Health Insurance Program (CHIP). The U.S. Comptroller General appoints MACPAC’s 17 commissioners, who come from diverse regions across the United States and bring broad expertise and a wide range of perspectives on Medicaid and CHIP. Copyright © March 2015. Urban Institute. Permission is granted for reproduction of this file, with attribution to the Urban Institute. Contents Acknowledgments iv Introduction 1 Methodology 2 Imputation of Dependent-Coverage Options and Contribution Rates 3 Data Underlying the HIPSM 5 Eligibility under the ACA 7 Projections of Health Insurance Coverage under the ACA 7 Policy Simulation 8 Limitations 10 Supplemental Tables for Chapter 1 of March 2015 MACPAC Report 12 Conclusion 22 Notes 23 References 24 About the Authors 25 Statement of Independence 26 Acknowledgments The Medicaid and CHIP Payment and Access Commission ( MACPAC) funded the enhancement of the Health Insurance Policy Simulation Model which allowed us to conduct this research for MACPAC. The authors appreciate the funding provided by MACPAC, as well as the advice and support of Chris Peterson and other MACPAC staff throughout this project and the review provided by the external readers for chapter 1 of MACPAC’s March 2015 report. The authors are grateful to Edward Miller, Jessica Vistnes, and Thomas Selden from the Agency for Healthcare Quality and Research who conducted new analyses and provided invaluable assistance with the MEPS-IC component of this research. This analysis would not have been possible without their efforts. The authors also appreciate the research assistance of Hannah Recht and Jay Dev and the contributions of Dean Resnick. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. It is important to note that funders do not determine our research findings or the insights and recommendations of our experts. IV ACKNOWLEDGMENTS Introduction Federal funding for the Children’s Health Insurance Program (CHIP) extends through September 30, 2015. Under current law, even without additional federal funds for CHIP, states would be required to cover children enrolled in Medicaid expansion CHIP programs until 2019 because of maintenance of effort provisions of the Affordable Care Act (ACA). States would receive their regular Medicaid match rate rather than the enhanced CHIP match rate for these children. In contrast, with no additional federal funding for CHIP, states would not be required to continue their separate CHIP programs. Children losing eligibility for separate CHIP programs would no longer have access to public coverage and would have to seek health insurance coverage through other mechanisms—either through marketplace tax credits or through their parent’s employer. Although some children currently enrolled in separate CHIP programs would be eligible to for tax credits in the marketplace, others would be barred from this type of coverage because of the firewall that limits eligibility for marketplace tax credits to families where the cost of a single policy is less than 9.5 percent of family income even in circumstances where the cost of family coverage is much higher (