A few years ago we discussed changes in Federal version of the CHIP program which provides low or no cost health care coverage to minors. Pennsylvania has a long-established CHIP program (having been one of the initial states to adopt the program) which is about five years older than the Federal version.


Recently, Governor Corbett notified the U.S. Health and Human Services Secretary, Kathleen Sebelius, that he was seeking an exemption from having to transfer about 70,000 Pennsylvania children from the CHIP program to Medicaid. This is a controversial request since Gov. Corbett is on record for declining to expand Medicaid as part of the Obama Affordable Care Act. His decision on transferring children off CHIP and onto Medicaid has been met by criticism by some public interest groups based on the belief that children would be better served by Medicaid than under the CHIP program.


An analysis of this issue is provided in the May 31, 2013 online edition of the Times Herald. Marc Levy interviewed attorney Richard Weishaupt who believes that Medicaid is a better option for families than CHIP because Medicaid “covers all medically necessary services, while CHIP provides more limited coverage, which is fine if a child is normal and relatively healthy.”


CHIP is the only medical program a child may be enrolled in and does not utilize secondary or “wrap around” coverage Medicaid can be used for with disabled children, for instance. The nuances as to one plan or the other are really individualized by the needs of the families participating in them. Regardless, they are two tools for providing children with health care.

It would be easy to assume there is an element of politics to Gov. Corbett’s decision, but there may be a budgetary motivation, as well. Mr. Levy points out that one advantage to keeping more children in CHIP is that the Commonwealth will collect more money from the Federal government than it would under the Medicaid coverage.


The next six months will be interesting as Pennsylvania and the U.S. gears up for the anticipated effective dates of various provisions of the Affordable Health Care Act, notably, the state insurance exchanges. Issues such as the transition of children from CHIP to Medicaid will likely increase and it is important to remember that their impact on families are real and should not be lightly considered. 

According to statistics available through CHIP, there are 197,150 people enrolled in CHIP in Pennsylvania. CHIP in Pennsylvania is available to all uninsured children and teens up to 19 years of age, who do not qualify for Medical Assistance. Due to CHIP’s eligibility requirements – which has no income limit for eligibility – it is often a viable option for people from a diverse range of economic backgrounds. Many times the cost of medical insurance through employment for a child support “obligor” is cost-prohibitive to the payor, while the payee receives less support due to the credit given by the Pennsylvania Support Guidelines to the paying parent. By minimizing both parties’ exposure to medical costs, so long as they are eligible for the benefit, CHIP has the effect of extending medical coverage over children, while possibly eliminating unreimbursed medical expenses to the parties.

CHIP, however, has recently made the news due to its consideration within the new Federal health care legislation. CHIP exists as both a state and federal program, with Pennsylvania enacting CHIP in 1992, and a Federal version being signed into law by President Bill Clinton in 1997. Both the U.S. House of Representatives and the Senate have two different ideas as to how to deal with CHIP within the Federal health care systems.


First, the Senate version of the health care legislation proposes extending federal financing through 2015 (it is currently set to expire in 2013). This amendment, advocated by Senators Bob Casey (D-PA) – whose father, Governor Robert P. Casey, originally signed Pennsylvania’s CHIP legislation into law – and John D. Rockefeller, IV (D-WV) would effectively keep the current version of CHIP in place, allowing for some changes in income eligibility.


The House, on the other hand, advocates eliminating CHIP altogether and funneling participants into Medicaid, the federal-state insurance program for the poor, or to one of the health insurance exchanges whereby medical insurance would be purchased at a reduced cost with government subsidies offsetting the cost.


An excellent summary of the two bills was written by David M. Herszenhorn for a New York Times health policy blog: (http://prescriptions.blogs.nytimes.com/2010/01/03/program-for-children-has-uncertain-future/)


Currently, CHIP eligibility and cost is determined by income and the number of children. http://www.chipcoverspakids.com/assets/media/pdf/2009_income_guidelines.pdf There is no income limit to qualify for CHIP, though income will effect amount of subsidy a child is eligible to receive, while under the proposed legislation, eligibility for the Medicaid option in the Senate plan would include up to 133% of the federal poverty line, while the House bill would be up to 150% of the poverty level.


The outcome of the Federal health care legislation will determine the future of CHIP in Pennsylvania and will be closely monitored in the coming weeks.