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S. HRG. 113–638 

THE CHILDREN’S HEALTH INSURANCE PROGRAM: 

PROTECTING AMERICA’S CHILDREN AND FAMILIES 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH CARE 

OF THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

SEPTEMBER 16, 2014 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

RON WYDEN, Oregon, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

SHERROD BROWN, Ohio 

MICHAEL F. BENNET, Colorado 

ROBERT P. CASEY, Jr., Pennsylvania 

MARK R. WARNER, Virginia 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

JOHN THUNE, South Dakota 

RICHARD BURR, North Carolina 

JOHNNY ISAKSON, Georgia 

ROB PORTMAN, Ohio 

PATRICK J. TOOMEY, Pennsylvania 

JOSHUA SHEINKMAN, Staff Director 

CHRIS CAMPBELL, Republican Staff Director 

SUBCOMMITTEE ON HEALTH CARE

JOHN D. ROCKEFELLER IV, West Virginia, Chairman 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

ROBERT P. CASEY, Jr., Pennsylvania 

PAT ROBERTS, Kansas 

ORRIN G. HATCH, Utah 

CHUCK GRASSLEY, Iowa 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RICHARD BURR, North Carolina 

PATRICK J. TOOMEY, Pennsylvania 

(II) 

(III) 

C O N T E N T S 

OPENING STATEMENTS 

Page 

Rockefeller, Hon. John D., IV, a U.S. Senator from West Virginia, chairman, 

Subcommittee on Health Care, Committee on Finance .................................... 1 

Enzi, Hon. Michael B., a U.S. Senator from Wyoming ......................................... 4 

Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Committee on 

Finance .................................................................................................................. 5 

Brown, Hon. Sherrod, a U.S. Senator from Ohio .................................................. 6 

Casey, Hon. Robert P., Jr., a U.S. Senator from Pennsylvania ........................... 7 

Schumer, Hon. Charles E., a U.S. Senator from New York ................................. 7 

Menendez, Hon. Robert, a U.S. Senator from New Jersey ................................... 8 

Bennet, Hon. Michael F., a U.S. Senator from Colorado ...................................... 9 

Portman, Hon. Rob, a U.S. Senator from Ohio ..................................................... 9 

WITNESSES 

Lesley, Bruce D., president, First Focus, Washington, DC .................................. 9 

Perrin, James M., M.D., FAAP, president, American Academy of Pediatrics, 

Elk Grove Village, IL ........................................................................................... 12 

Caldwell, Cathy, Director, Bureau of Children’s Health Insurance, Alabama 

Department of Public Health, Montgomery, AL ................................................ 14 

Holtz-Eakin, Douglas, Ph.D., president, American Action Forum, Washington, 

DC .......................................................................................................................... 15

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Bennet, Hon. Michael F.: 

Opening statement ........................................................................................... 9 

Brown, Hon. Sherrod: 

Opening statement ........................................................................................... 6 

Caldwell, Cathy: 

Testimony .......................................................................................................... 14 

Prepared statement .......................................................................................... 35 

Responses to questions from subcommittee members ................................... 37 

Casey, Hon. Robert P., Jr.: 

Opening statement ........................................................................................... 7 

Enzi, Hon. Michael B.: 

Opening statement ........................................................................................... 4 

Prepared statement .......................................................................................... 39 

Holtz-Eakin, Douglas, Ph.D.: 

Testimony .......................................................................................................... 15 

Prepared statement .......................................................................................... 40 

Lesley, Bruce D.: 

Testimony .......................................................................................................... 9 

Prepared statement .......................................................................................... 47 

Responses to questions from subcommittee members ................................... 62 

Menendez, Hon. Robert: 

Opening statement ........................................................................................... 8 

‘‘The Way to Beat Poverty,’’ by Nicholas Kristof and Sheryl WuDunn, 

The New York Times, September 12, 2014 ................................................. 67 

Perrin, James M., M.D., FAAP: 

Testimony .......................................................................................................... 12 

Prepared statement .......................................................................................... 73 

Responses to questions from subcommittee members ................................... 77 

Page

IV 

Portman, Hon. Rob: 

Opening statement ........................................................................................... 9 

Rockefeller, Hon. John D., IV: 

Opening statement ........................................................................................... 1 

Prepared statement .......................................................................................... 79 

Schumer, Hon. Charles E.: 

Opening statement ........................................................................................... 7 

Wyden, Hon. Ron: 

Opening statement ........................................................................................... 5 

COMMUNICATIONS

Academy of General Dentistry ................................................................................ 81 

Children’s Hospital Association .............................................................................. 83 

National Association of Pediatric Nurse Practitioners ......................................... 84 

(1) 

THE CHILDREN’S HEALTH INSURANCE 

PROGRAM: PROTECTING AMERICA’S 

CHILDREN AND FAMILIES 

TUESDAY, SEPTEMBER 16, 2014 

U.S. SENATE, 

SUBCOMMITTEE ON HEALTH CARE, 

COMMITTEE ON FINANCE, 

Washington, DC. 

The hearing was convened, pursuant to notice, at 2:54 p.m., in 

room SD–215, Dirksen Senate Office Building, Hon. John D. Rockefeller IV (chairman of the subcommittee) presiding. 

Present: Senators Wyden, Schumer, Stabenow, Menendez, 

Brown, Bennet, Casey, Enzi, and Portman. 

Also present: Democratic Staff: Anne Dwyer, Professional Staff; 

Elizabeth Jurinka, Chief Health Advisor; and Jocelyn Moore, Deputy Staff Director. Republican Staff: Becky Shipp, Health Policy 

Advisor. 

OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV, A 

U.S. SENATOR FROM WEST VIRGINIA, CHAIRMAN, SUBCOMMITTEE ON HEALTH CARE, COMMITTEE ON FINANCE 

Senator ROCKEFELLER. Good afternoon. My apologies for being 

late. There was a long discussion at caucus, several votes, and the 

discussions were important, actually. I will make my opening statement. I am very grateful to Senator Enzi for being here. He cannot 

stay a long time, but he is here, and that counts. 

I have been on this Finance Committee for a long time, and I 

have chaired this subcommittee for a very long time. I really do not 

remember ever having had a meeting of it before. The previous 

chairman had a different philosophy than the present chairman, 

who likes his subcommittees to be active. This, I have to say without sentiment, will be the last Health Subcommittee hearing that 

I chair. The first and the last. I think that has a certain panache. 

[Laughter.] I could not think of anything more important than 

doing it on the Children’s Health Insurance Program. 

The year 2014 marks the 17th anniversary of one of the most 

successful programs for improving children’s health care in the 

United States, which is the CHIP program. It is a marvel. Eight 

million American children and families look to CHIP for comprehensive and affordable health care coverage, including 40,000 

children from my own State in West Virginia. I am not sure about 

Wyoming and Ohio. Wyoming would have lower numbers. Ohio 

would have higher numbers. 

2 

CHIP’s success has played an essential role in cutting the number of uninsured children in half over the last 14 years, from about 

14 percent to about 7 percent. That was as of 2 years ago. This 

kind of progress is something we should celebrate. We must continue to invest in CHIP so that we can celebrate many more of the 

program’s milestones. 

In 1997, Senators Kennedy and Hatch and I spent countless 

hours discussing how we could increase health care access for children in a way that members of both political parties could support, 

not only to pass the program, but to sustain it, to keep it going, 

which is what we are trying to do now. Creating this program has 

been one of the most meaningful things I have done in my career 

in public service. I just flat out say that. If you are helping 8 million children all across the country, how can that not be important? 

How can that not be important? 

So, without congressional action, I say again, CHIP will run out 

of funding next fall, placing at risk the well-being of hundreds of 

thousands of children and pregnant women. I hope that the members of this subcommittee will not let that happen. 

It is an interesting program, because the Governors, both Democratic and Republican, tend to like it because there is a lot of flexibility in the way they can allocate funds and work with the way 

it is carried out. So I do not think there are a lot of Republican 

Governors who are against it. I do not think there are many Democratic Governors who are against it. In this case, since so much 

rests with the States, I think that is important for our decisionmaking. 

But, it will run out of funding next fall. CHIP is a game changer 

for millions of children. No other form of coverage provides the 

same level of specific and comprehensive pediatric networks at an 

affordable cost for working families. 

The challenges that many children face are too similar to the 

ones I first saw when I was a VISTA volunteer in Emmons, WV, 

nearly 150 years ago. [Laughter.] Every sight I saw there, Chairman Wyden, has stayed with me—every sight I saw there. Like 

when we went to Sago. I remember the look in your eyes as you 

listened to those families. Experiences like that make for lifetime 

commitments. 

When I first arrived as a VISTA volunteer in Emmons, there 

were children in the town and across the State who had never seen 

a doctor because their families simply did not have the money to 

cover the cost of a physician visit or dental care. Dental care was 

out of the question. The wonderful thing about CHIP, generally 

speaking, is its coverage is better than that in the Affordable Care 

Act, which I do not like to say, but I have to in order to be honest. 

I thought then to myself, as I still do now, that no parent should 

have to carry the stresses of knowing that you cannot afford care 

for your children if something goes terribly wrong, and something 

goes terribly wrong very often with children in these rural areas 

and poor areas, which my State basically is. 

I am proud to say that ever since CHIP’s inception, the program 

has consistently enjoyed strong bipartisan support. One member of 

the Finance Committee, Senator Hatch, has remained a steadfast 

champion of CHIP from the very beginning. We have shared a goal 

3 

of making certain that every child in America gets a fair shot at 

a healthy start in life. While we have not always agreed on every 

provision in the CHIP program, I have always appreciated Senator 

Hatch’s strong, fundamental commitment to it. 

For as long as I can recall, Congress has been able to, Mr. Chairman—— 

Senator WYDEN. You are Mr. Chairman. 

Senator ROCKEFELLER. I am glad you are here, very glad. 

Congress has been able to put aside its differences and come together when it was called upon to do what is right for American 

children. That time has come again, otherwise we will run out of 

money, and we will put the States into total disruption if they are 

not able to plan. You are going to help us understand that. 

CHIP is currently at a crossroads. Funding for CHIP must be reauthorized soon, otherwise the program as we know it will come to 

an end, and as many as 2 million children could lose their coverage. This would threaten their health and their well-being, not 

to mention the significant gains that we have made over the past 

17 years to reduce the number of uninsured children in this country. We simply cannot afford to take this major step backwards and 

jeopardize the future of generations by allowing CHIP to expire. 

We cannot do it. We just cannot do it. 

If it was a matter of high controversy, that would be one thing— 

Republicans and Democrats clawing at each other’s eyeballs, et 

cetera—but that is not the case. It just is not the case on this one. 

We do coalesce around children. This is a good bill. It has helped. 

It has done even what the Affordable Care Act has not been able 

to do. 

A recent study by Wakely Consulting Group demonstrated that 

moving children into other forms of private insurance would cause 

a tenfold increase in out-of-pocket spending for CHIP families who 

cannot afford that. We just cannot have that. It is not right to shift 

the added financial burdens onto working families when a costeffective solution for maintaining the coverage they already have 

exists. 

Although funding for CHIP expires in 2015, the program is authorized through 2019. Now that is one of those anomalies that we 

produce sometimes in Congress. It usually helps, but if it does not, 

it is really bad. In other words, it is wonderful if the program is 

authorized, but it does not mean much if the money is not there. 

So, although the funding for CHIP expires in 2015, the program is 

authorized through 2019, which therefore could lead to significant 

disruption to State governments, private health plans, hospitals, 

and numerous other stakeholders, in addition to the families whose 

children are enrolled in the program. States have been budgeting 

and planning under the assumption that Congress would extend 

funding for another 4 years. They simply are not prepared to rapidly develop and implement plans to transition millions of children 

into other forms of coverage. In short, State legislatures and budget 

officials are relying on us to act now. 

Colleagues, let us do our job. Let us show the American people 

that we can work together, that we can do something good. With 

that, I lay my case on the mercy of the subcommittee, the full committee, and the Congress. 

4 

[The prepared statement of Senator Rockefeller appears in the 

appendix.] 

Senator ROCKEFELLER. Senator Enzi? 

OPENING STATEMENT OF HON. MICHAEL B. ENZI, 

A U.S. SENATOR FROM WYOMING 

Senator ENZI. Thank you, Mr. Chairman. I want to thank you for 

holding this hearing on a very important issue in health care. We 

may not always agree on every health care bill that comes before 

us, but we certainly can agree that the health of our young people 

is vitally important to our health as a Nation. You have made children’s health the cornerstone of your career in the Senate, and I 

applaud you for your effort in raising the profile of this issue. I 

hope that your last hearing is your most productive hearing. 

[Laughter.] 

I want to reiterate again, you mentioned that the Children’s 

Health Insurance Program, CHIP, has been extended through 

2019, but the funding only through September 30, 2015. So this 

hearing is intended to focus on the fact that the program funding 

will expire and needs extension. 

We will draw attention to the administrative burden on States 

and the logistics and planning that require action sooner rather 

than later. I am pleased that we have such a distinguished panel 

to do that. The CHIP program is a valuable option for children who 

need health insurance, and I would like us to focus more on the 

core mission of the program in a way that builds on the good that 

many States are doing and which serves the population that truly 

needs help. 

Wyoming’s Kid Care CHIP is an example of targeting kids who 

are really in need and building a program that leverages the best 

of the public and private sectors to get children who do not have 

any other options the coverage that they need. That program is 

doing well, partly because of the flexibility that is allowed under 

this. 

In 2003, Wyoming formed a public/private partnership with Blue 

Cross Blue Shield of Wyoming and Delta Dental of Wyoming to 

provide the health, vision, and dental benefits in Wyoming. All 

children enrolled in the program will receive a wide range of benefits including inpatient and outpatient hospital services, lab and 

x-ray services, prescription drugs, mental health and substance 

abuse services, durable medical equipment, physical therapy, dental, and vision services. The families do share in the cost of their 

children’s health by paying copayments for a portion of the care 

that is provided. 

I am hopeful that we can have a very positive dialogue about the 

path forward for CHIP. I think one of the greatest things that this 

program has is the flexibility. I hope that we continue that. We 

need to focus our efforts here on identifying the core mission of the 

program in a way that builds on the good work that many States 

are doing and what serves this population that truly needs help. 

I appreciate the testimony of the people who are here. I have 

read through that and am impressed, and I hope that you will 

allow us to submit some questions when we cannot be here so that 

5 

we can get additional information to get this right. So again, I 

thank you for holding this hearing. 

Senator ROCKEFELLER. I thank you, sir. 

[The prepared statement of Senator Enzi appears in the appendix.] 

Senator ROCKEFELLER. The chairman of the full committee, Senator Wyden. 

OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR 

FROM OREGON, CHAIRMAN, COMMITTEE ON FINANCE 

Senator WYDEN. Chairman Rockefeller, thank you very much for 

doing this. I want to commend you and Senator Enzi for bringing 

us together to talk about this important program. Colleagues, I 

think it is worth noting that, at a time of extraordinary dysfunction 

and polarization here in Washington, this is a program where there 

is a consensus that it genuinely helps people in need, and particularly our vulnerable children. 

This is medical care. It is dental care to millions of kids nationwide who otherwise, without CHIP, would be falling between the 

cracks. In particular, it has reduced disparities in health coverage 

for economically vulnerable Americans. 

I just want to take a couple of minutes to note how we have arrived at this point, because you do not see a consensus built for an 

incredibly important program for vulnerable people by osmosis. It 

just does not happen that way. This program has come together because of the extraordinary leadership of Chairman Rockefeller. We 

certainly had Senator Hatch all of these years, and he was in your 

corner, Chairman Rockefeller, but make no mistake about it: this 

has come about because a humble person who has been relentless, 

relentless in his admirable desire to stand up for those in need, 

said he was going to go to bat for this program every step of the 

way, and that is why this program is on the books, Chairman 

Rockefeller. This is a particularly meaningful day, and we are 

going to have other times, colleagues, to talk about the great contributions of Chairman Rockefeller, what he has done to protect the 

retirement security for miners. I sat next to him, have for years, 

in the Intelligence Committee. None of you can know that because 

that is kind of classified. [Laughter.] 

He did extraordinary work on cyber-security back when I had a 

full head of hair and rugged good looks and was director of the 

Gray Panthers. We passed petitions, actually, for work that Chairman Rockefeller did for seniors in terms of home health care. 

We take a few minutes today to recognize what he has done for 

those who are vulnerable, and that legacy is going to continue. 

That legacy is going to continue in the days and years ahead, that 

legacy of grace, tenacity, and particularly making sure that, every 

time debates are conducted here in the Finance Committee and in 

Washington, DC, those without power, those without clout, those 

without political action committees, have a big voice. That is what 

Chairman Rockefeller’s legacy is all about, standing up for those 

people. 

I am going to have a chance to talk about other aspects of his 

career. I am particularly pleased that he is the leader of the Tall 

Senator’s Caucus. [Laughter.] That is kind of meaningful to me, 

6 

and I want to note one other point before I wrap up, and that is 

Chairman Rockefeller’s selfless decision to decline the opportunity 

to chair the full Finance Committee, which allowed me to accept 

this position and the responsibility that goes with it. We all understand that Chairman Rockefeller would have been a superb chairman of the Finance Committee. I just want you and colleagues here 

to know that my gratitude for that selfless act, Chairman Rockefeller, is profound. 

My goal here in the Senate Finance Committee is going to be to 

try to live up to the standards that you have set during your time 

in public service. Thank you. 

Senator ROCKEFELLER. That is pretty nice. [Laughter.] 

Actually, I was really happy as the chairman of the Commerce 

Committee. I am really happy that you are here. 

Senator Brown? 

OPENING STATEMENT OF HON. SHERROD BROWN, 

A U.S. SENATOR FROM OHIO 

Senator BROWN. Thank you, Mr. Chairman. I appreciate the 

chance to say a couple of words, first about you and second about 

this issue which is so very important. I do not speak for others, but 

I know that others agree with this, that Senator Rockefeller has 

been a friend and a mentor to me. He has taught me a great deal 

about translating human need into action in what this committee 

has done. 

I am a relatively new member of this committee. I have been 

on—as has Senator Casey—for less than 2 years. I welcome the 

chance to help in a leadership role to build on the legacy of Medicaid and on CHIP that Senator Rockefeller has established in 

more than 2 decades on this committee. The work he has done, I 

followed that when I was in the House, saw what he did, and then 

got to work up close with him. 

My State’s CHIP program, fortunately for us I guess, is an extension of Medicaid. Kids will continue to receive coverage if funding 

is not authorized. We also know, though, that that means significant budget cuts. The type of cut is more cost-shifting to the States. 

One thing I think we have learned is, we cannot keep doing that 

with Medicaid. We have also learned that Medicaid payment equity 

expires at the end of the year. We have made some progress in leveling the field between Medicaid and Medicare payment. That is 

something we need to continue. I think there is bipartisan support, 

too, for that. 

Most importantly, Senator Rockefeller, thanks for making a difference in the lives of a lot of children on the other side of the Ohio 

River, on the north side, in addition to the south side of the Ohio 

River. Thank you. 

Senator ROCKEFELLER. Thank you, Senator Brown. My only regret is that West Virginia owns the Ohio River. [Laughter.] 

Senator BROWN. Which is actually true. 

Senator ROCKEFELLER. Yes. I built eight bridges across, but you 

guys just put up about 20 cents. 

Senator BROWN. Right. 

Senator ROCKEFELLER. We had to carry the whole load. 

7 

Senator BROWN. I just think if you have a Rockefeller and a 

Brown, that Rockefeller puts up 80, Brown puts up 20. [Laughter.] 

Senator SCHUMER. Let us have no class warfare here, Sherrod. 

Senator ROCKEFELLER. That is right. Logic rules. 

Okay. Senator Casey? 

OPENING STATEMENT OF HON. ROBERT P. CASEY, JR., 

A U.S. SENATOR FROM PENNSYLVANIA 

Senator CASEY. Mr. Chairman, thank you very much. I would 

want to incorporate by reference much of what Chairman Wyden 

said, as well as Senator Brown, in their praise of your public service and also your work for children. 

There is an old expression about being summoned to give testimony at some point in our lives, and whenever Jay Rockefeller has 

been summoned to give testimony, it was almost in every case 

about kids, fighting and fighting and fighting on their behalf and, 

as Senator Brown mentioned, the Children’s Health Insurance Program as well as Medicaid, two vitally important programs. 

The chairman served as Governor. I want to mention another 

Governor, my father. After losing three times for that office, on his 

fourth try he won, and Pennsylvania was one of the first States to 

enact a Children’s Health Insurance Program that became the national model, which you led with your colleagues. 

I think, Mr. Chairman, we will have longer statements for the 

record about the benefits of CHIP. Let me just read you this, then 

I will conclude. This is from one of the families giving their own 

testimony about CHIP. ‘‘The CHIP Program has been great. We 

know that there is quality insurance, and we are finally able to 

sleep at night knowing that our kids can be seen by excellent pediatricians. I do not know what we would have done without CHIP. 

Now my children can play sports and go away to camp like other 

kids, and, if they get hurt, CHIP is there for them.’’ 

I could not, if I had an hour, say it better than that. That testimony is evidence of the benefit of the program, but also I think it 

is proof positive of your achievements in public service, especially 

for our kids. 

Thank you very much. 

Senator ROCKEFELLER. Thank you, Senator Casey. Senator 

Portman was here, and I am glad he was, because he is for this. 

And now, Senator Schumer, if you can overcome your shyness, 

sir, you are on. 

OPENING STATEMENT OF HON. CHARLES E. SCHUMER, 

A U.S. SENATOR FROM NEW YORK 

Senator SCHUMER. Unaccustomed as I am to public speaking—— 

[Laughter.] 

We could use a lot of nice adjectives for our dear friend Jay, 

whom we are so sorely going to miss. But let me just read you one 

sentence that would be greater testimony to him from my State of 

New York than all of the adjectives in the world. 

When CHIP was enacted, New York had over 800,000 uninsured 

children. Today that number has decreased by 90 percent—what a 

legacy—all because of one person, Jay Rockefeller. His passion, his 

strength, and his caring have just been amazing. They have been 

8 

an inspiration, I think, to many of us here in the Senate. Whether 

we had to fight the fights on the health care bill or in the CHIP 

program or throughout the appropriations process, there was no 

voice that was stronger or more effective than Jay Rockefeller’s on 

behalf of kids and all of the voiceless in this country. 

Just on a more serious note, as Sherrod was saying, that somebody who came from a background of plenty could care so much for 

the people who had nothing and then accomplish so much, is still 

a testament to the greatness of America. So anyone who doubts the 

future of this country, look at the biography and accomplishments 

of Jay Rockefeller, and you will feel really good about the United 

States of America and about him. Thank you. 

Senator ROCKEFELLER. I am getting confused here. I am not 

going to break out into tears because I do not do that, but I really 

thought this was a hearing about CHIP. [Laughter.] 

Senator SCHUMER. CHIP equals Rockefeller. 

Senator ROCKEFELLER. All right. If I am going to hand out 

chances for punishment, I should certainly recognize Senator 

Menendez. 

OPENING STATEMENT OF HON. ROBERT MENENDEZ, 

A U.S. SENATOR FROM NEW JERSEY 

Senator MENENDEZ. Well, thank you, Mr. Chairman. I am going 

to be brief, but I hope that in your modesty you will not continue 

to use humor to deflect the praise that is coming your way. 

I think that if I would sum up the lifetime of work that you have 

led here in the Senate, it is as a champion of children—children in 

the CHIP program, children in poverty, children in foster care. The 

people and the children of West Virginia, and for that matter, the 

children of the Nation including my home State of New Jersey, are 

better off because of Jay Rockefeller and his mission in life to help, 

as Senator Schumer said, the most vulnerable. 

Nearly a generation now of children have received the benefits 

of your leadership as a result of what you have done in CHIP. Your 

landmark study in 1991 opened the floodgates to a lot of these initiatives. That is a tremendous testament. As the only Hispanic on 

this committee, I want to also say that immigrant children have 

benefitted as a result of your resolve to make sure that all children 

are included in the benefits of CHIP and other programs. 

Jay, we have a great admiration for you. The best way we can 

show that admiration is to continue that legacy as we continue to 

reauthorize CHIP and these other critical programs so that future 

generations of children in West Virginia and throughout the country will continue to receive the benefits of what you have ultimately achieved for them and for our country. 

I have specific questions when we have the witnesses finish their 

testimony, but I did not want to lose this opportunity to join my 

colleagues in echoing their sentiments. 

Senator ROCKEFELLER. You are a kind man, and I appreciate 

you. You all are. 

Senator Bennet? 

9 

OPENING STATEMENT OF HON. MICHAEL F. BENNET, 

A U.S. SENATOR FROM COLORADO 

Senator BENNET. Thank you, Mr. Chairman. If I could, I would 

like to take just one minute also to say how grateful I am for your 

leadership on these issues. I came here having spent almost 5 

years of my life being Superintendent of Denver public schools, 

wondering who in Washington cared about the kids in that school 

district. I never had any doubt that you did, and my time here has 

only reaffirmed that. 

The New York Times columnist, David Brooks, wrote in a different context not that long ago that the future has no lobby in 

Washington, DC. I think that is a huge part of the problem we 

have in this city, but he was not exactly right, because the future 

had a huge lobby in you. I think it is incumbent on all of us in this 

committee to carry on that work. 

So, thank you for everything that you have done, Mr. Chairman. 

Senator ROCKEFELLER. Thank you, Senator Bennet, very much. 

Is it all right if I go to the witnesses? [Laughter.] 

Senator WYDEN. I think Senator Portman just joined us. 

Senator ROCKEFELLER. Senator Portman, thank you for being 

here, sir. 

Senator PORTMAN. I was here earlier, Mr. Chairman, so I got to 

hear your opening remarks. 

Senator ROCKEFELLER. I know. I saw you. 

Senator PORTMAN. That is what I really came for. Forget the witnesses—no. Thank you all for being here. [Laughter.] 

OPENING STATEMENT OF HON. ROB PORTMAN, 

A U.S. SENATOR FROM OHIO 

Senator PORTMAN. A toast to you from our United States Senate 

bottled water. I enjoyed being a colleague and a friend, and I appreciate your willingness to spend so much of your career focused 

on this issue of children’s health and other important matters, important to West Virginia and to our country. 

As you know, you are a neighbor, and so I look forward to staying in touch and look forward to the testimony today, and the opportunity to have this be your final hearing on a topic that is a 

passion of yours and one that is incredibly important for all of our 

States. Thank you, Mr. Chairman. 

Senator ROCKEFELLER. Thank you, Senator Portman. You are 

kind. You are very kind. 

Now we are going to turn to the witnesses. We have a very good 

panel. 

First, we have Mr. Bruce Lesley. Mr. Lesley is the president of 

First Focus, which is a bipartisan advocacy organization dedicated 

to making children and families a priority in Federal policy. Well 

actually, we will just go right to you. 

STATEMENT OF BRUCE D. LESLEY, PRESIDENT, 

FIRST FOCUS, WASHINGTON, DC 

Mr. LESLEY. Thank you, Chairman Rockefeller, Chairman 

Wyden, and Senators Enzi, Brown, Casey, Menendez, Schumer, 

Portman, and Bennet, for having this hearing today about the Children’s Health Insurance Program and the positive impact it has 

10 

had on the lives of millions of children across the country. I would 

like to start by recognizing Chairman Rockefeller for his lifelong 

achievements in championing an array of issues that have been 

critically important to the children of West Virginia and this entire 

country, including his legacy with respect to CHIP. 

Mr. Chairman, as you know, CHIP has been an undeniable bipartisan success story. As those of us who worked on the issue 

back in 1997 can attest, the lack of health insurance coverage 

among children was a national tragedy. In fact, one in seven of our 

Nation’s children had no health insurance coverage. 

As the National Commission on Children—which was chaired by 

Senator Rockefeller—found in 1991, perhaps no set of issues moved 

members of the National Commission on Children more than the 

wrenching consequences of poor health and limited access to medical care. If this Nation is to succeed in protecting children’s health, 

there must be a major commitment from families, communities, 

health care providers, employers, and government to meet children’s basic health needs and to ensure that all pregnant women 

and children have access to health care. 

Mr. Chairman, that commitment to protecting the health of our 

Nation’s children was answered by Congress in your work in a bipartisan manner with the passage of CHIP in 1997. Through the 

leadership of the Senate and this committee, CHIP was created toward the goal of dramatically cutting the number of uninsured children in America. 

On that measure, if you look at Figure 1 on page 3 of my testimony, as those numbers indicate, CHIP has been an incredible success story, as the uninsured rate for our Nation’s children has been 

cut in half—from 14 percent in 1997 to just 7 percent in 2012— 

while the uninsured rates for adults during that period increased. 

In addition to the fact that CHIP is a national success story, it 

is also bipartisan. One of the hallmarks of CHIP has been the willingness of leaders on both sides of the aisle—you noted this in your 

work with Senators Hatch, Kennedy, Grassley, and others on this 

committee—to work together to increase the enrollment of children. 

CHIP is also a public/private partnership. CHIP gives States discretion in working with their providers and insurance plans to set 

premiums, cost-sharing benefits, income eligibility levels, and provider networks for children and pregnant women, rather than having a one-size-fits-all Federal standard. 

CHIP is also child-focused. By definition, CHIP is child-focused, 

and that has been a critical factor in its success for children. CHIP 

provider networks have been built and improved over the 17 years 

of its history in every single State, and they meet specific pediatric 

quality standards that address the unique development and health 

care needs of children. 

CHIP has also been successful in reducing health disparities. In 

addition to the coverage improvements, a study published by the 

National Institutes of Health found that CHIP coverage has been 

critically important and successful in reducing disparities in access 

to care measures and quality of care. 

CHIP is also overwhelmingly popular with the American people. 

In poll after poll, CHIP has remained popular with the public. The 

American Viewpoint Poll this past May found that voters support 

11 

extending CHIP by a wide margin of 74 to 14 percent, and by more 

than a 31⁄2 to 1 margin even among Tea Party supporters. No matter the political, ethnic, gender, age, or geographic breakdown, 

CHIP is overwhelmingly popular. 

Unfortunately, CHIP’s 8 million children are at risk. Although 

CHIP celebrates its 17th birthday this year and has achieved a remarkable record of success, funding for the program expires on 

September 30, 2015, and there is some urgency to addressing this 

issue as soon as possible, because States are beginning their budget 

preparations now and are facing uncertainty about how to handle 

CHIP beginning in October 2015. 

The consequences of CHIP expiring would spell disaster for more 

than 8 million children. The reasons are, first, due to what is referred to as the kid glitch in the Affordable Care Act or ACA. It 

is estimated that up to 2 million children could lose coverage entirely if CHIP were to expire. Second, as a recent First Focus study 

highlights, rural children will be at the greatest risk if CHIP expires, because children in rural communities would disproportionately lose their health coverage. Last, even for the children who 

would be able to transition to the Affordable Care Act exchange 

plans or marketplace, a report by Wakely Consulting Group found 

that children in every single State would be left with fewer benefits 

and far-higher cost sharing if they lost CHIP coverage. 

Therefore, we urge Congress to, first and foremost, adopt a 4- 

year extension of CHIP funding through 2019. This would rightfully align the funding with the program’s reauthorization date. We 

urge the Congress to pass such an extension during the lame duck 

session, as there is some urgency to this. 

In addition, we would urge the extension of outreach and enrollment grants, the pediatric quality standards, and Express Lane 

Eligibility, which expires in March 2015, so that we continue to 

make progress toward the goal of covering all children. 

In closing, I would like to, once again, thank Chairman Rockefeller and the members of this committee for holding this important 

hearing about children’s health. This committee has always provided the leadership on CHIP, and we look forward to working 

with you toward its extension. 

I would also like to personally recognize and thank Chairman 

Rockefeller—during my time on this committee, my 12 years on the 

Hill, 10 years in the Senate—for his outstanding career as a champion for our Nation’s most vulnerable citizens, its children. We appreciate all that you have done over the years for kids. Thank you 

very much. 

Senator ROCKEFELLER. Thank you, sir, very, very much. 

[The prepared statement of Mr. Lesley appears in the appendix.] 

Senator ROCKEFELLER. Dr. James Perrin is a primary care pediatrician and president of the American Academy of Pediatrics. In addition to being a lifelong advocate for improving children’s health, 

he is a former professor of pediatrics at Harvard and director of the 

division of pediatrics at Massachusetts General Hospital. 

We welcome you, sir. 

12 

STATEMENT OF JAMES M. PERRIN, M.D., FAAP, PRESIDENT, 

AMERICAN ACADEMY OF PEDIATRICS, ELK GROVE VILLAGE, 

IL 

Dr. PERRIN. Thank you, Senator Rockefeller. I am Jim Perrin, 

and I join you today on behalf of the 62,000 primary care pediatricians, pediatric subspecialists, and pediatric surgeons at the Academy of Pediatrics. I am in Massachusetts and currently president 

of the Academy. 

Let me start by thanking you and your colleagues here for the 

opportunity to testify before the subcommittee regarding the CHIP 

program. Strongly bipartisan in its beginning and strongly bipartisan today, CHIP has developed into a critical program that finances health coverage for over 8 million children across the country and has improved three important aspects of children’s health. 

One is access to coverage, second is utilization of those services, 

and third is the population health of millions of children who have 

benefitted from this program. 

Coverage is important for a number of reasons, and I think we 

know that. Uninsured children are three times more likely than 

children with insurance to lack access to needed medications and 

five times more likely to have an unmet need for medical care. And 

a just-released report from the CDC shows that uninsured children 

receive substantially lower rates of preventative services. 

We all know that children are different from adults, and the 

needs of children—in the sense of their health care needs, in the 

context of their developmental needs over time, the changing manifestations of disease at different times in the child’s life, and the 

different response to treatments—all require children-specific kinds 

of benefits. That is exactly what the Children’s Health Insurance 

Program has provided to us. 

Most children are healthy, so the epidemiology of pediatric disease really does differ from that of the adult population. Care for 

all children is marked by adequate immunization and other preventative services. Pediatricians really think prevention is a critical 

aspect of what we do. Nevertheless, we also have large and increasing numbers of children with chronic health conditions that affect 

their health and development and require specific care to generate, 

maintain, and restore age-appropriate functioning to maximize 

their potential—another area of prevention that is incredibly important. 

Children also are different because they represent the most economically, ethnically, and racially diverse population in the United 

States, with very high rates of childhood poverty. The resulting 

health care disparities that relate to poverty really increase the 

risk of adverse outcomes. So these differences between children and 

adults require distinct and specific services for infants, children, 

and adolescents that do emphasize the preventative notion. 

Now, we have not achieved coverage of these services for every 

child in the United States, but we should all be proud and thankful 

for the vast strides we have made since SCHIP was established, as 

Bruce just reminded us. Today CHIP is critical in helping to ensure 

that no child falls through the cracks and that the vast majority 

of U.S. children have access to high-quality affordable health insurance. In fact, even with persistent poverty among children, since 

13 

SCHIP’s enactment in 1997, the number of uninsured children has 

been cut in half while, on the other hand, the number of uninsured 

adults rose significantly. 

So the reauthorization in 2009 included several improvements, 

such as better age-appropriate health benefits; coverage of dental, 

mental health, and substance abuse services to the same extent as 

medical and surgical treatments; and a strong Federal investment 

for the first time ever in children’s health care quality improvement. 

The Academy urges Congress to fully fund CHIP through at least 

2019, and to do so during this Congress, for a host of reasons. Pediatricians are intimately familiar. We work closely with our friends 

in Alabama, for example, with the interaction between the Federal 

and State Governments related to Medicaid and CHIP. 

States, in particular, need the time to plan and to have an understanding of what the Federal Government will do in order to 

make wise budgetary decisions. Children and families need the stability that a medical home offers, consistent rules regarding what 

their insurance covers and the managed care company with which 

they will interact, and the peace of mind, which we heard about 

earlier, that quality, affordable health care offers. Pediatricians 

need to know that they will be able to operate their practices with 

a reliable payer as well, so that they can keep the medical home 

open to as many publically insured families as possible. 

CHIP has made important contributions to the advancement of 

health care delivery to near-poor children in recent years and has 

the potential to accomplish more in the years to come. The Academy specifically offers the following recommendations to strengthen 

the CHIP program for children: first, to fully fund the program 

through 2019; to expand awareness of CHIP among eligible families (and indeed, the movement towards exchange plans has helped 

enroll people in CHIP, which we are very excited about); to facilitate enrollment in CHIP for eligible children; to maximize comprehensive coverage and affordability for children whose care is financed by CHIP; to enhance and continue the very important quality measurement funding and quality improvement funding in the 

CHIPRA Act; and to ensure adequate payment for physicians who 

care for CHIP patients. 

Children and pediatricians owe tremendous thanks to you, 

Chairman Rockefeller, to Senator Hatch, Senator Wyden, Senator 

Roberts, and the other Senators who are here and have been here 

today, for your bipartisan leadership and working to keep CHIP 

strong for children. America’s pediatricians urge Congress to support your efforts and others in Congress to continue CHIP’s success 

for at least 4 more years. 

Thank you very much. 

Senator ROCKEFELLER. Thank you, sir, very much. 

[The prepared statement of Dr. Perrin appears in the appendix.] 

Senator ROCKEFELLER. Ms. Cathy Caldwell is the Director of the 

Bureau of Children’s Health Insurance in the State of Alabama at 

its Department of Public Health. 

You head up the CHIP program, All Kids. I think that is what 

it is called. It provides coverage to about 85,000 children. I am interested in what you have to say, and I will have follow-up quesVerDate Mar 15 2010 18:10 May 11, 2015 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 R:\DOCS\94479.000 TIMD
14 

tions as to the disruption in State government and planning, generally. 

We welcome you here very much. 

STATEMENT OF CATHY CALDWELL, DIRECTOR, BUREAU OF 

CHILDREN’S HEALTH INSURANCE, ALABAMA DEPARTMENT 

OF PUBLIC HEALTH, MONTGOMERY, AL 

Ms. CALDWELL. Chairman Rockefeller, Chairman Wyden, Ranking Member Roberts, Ranking Member Hatch, Senator Enzi, and 

distinguished members of the committee, I thank you for allowing 

me to speak. 

In Alabama, more than 82,000 children are currently enrolled in 

CHIP. More than 56,000 are enrolled in All Kids, which is a separate, stand-alone program, and 26,000 enrollees receive services 

through the Medicaid program. I am here to ask you to extend 

CHIP funding beyond fiscal year 2015. Extension is critically needed to continue providing quality care for our children. 

CHIP is a successful program. For example, 90 percent of our enrollees have at least one visit with a primary-care physician annually, and our immunization rate for 2-year-olds exceeds 70 percent. 

We encourage families to seek preventive care over emergency care, 

and we have seen success. For instance, only 10 percent of our enrollees with asthma have an asthma-related trip to the emergency 

room, and more than 80 percent of our enrollees with diabetes have 

an annual A1c test. We provide an enhanced, child-based dental 

benefit, and more than 60 percent of our enrollees receive a dental 

visit within 90 days of enrollment. 

We also take care of very sick children. Last year alone, we provided coverage to 33 children who have leukemia. In May, we covered a sound processor for a cochlear implant for a 14-year-old boy 

with hearing loss, allowing him to hear clearly. In June, we enrolled a 7-year-old uninsured child hospitalized with pneumonia, 

and we enrolled a 13-year-old uninsured girl with cystic fibrosis 

who had not been able to buy her medication. 

These stories are not unique. We hear them every day. We are 

passionate about taking care of these children who, without CHIP, 

likely would be uninsured and unable to get the care they need. 

Across the Nation, there are 8 million children enrolled and depending on an extension of CHIP funding. 

While some CHIP children may have access to coverage through 

an employer group, the cost of dependent coverage may be costprohibitive for the family. In addition, employer-sponsored or marketplace coverage may have higher deductibles, premiums, and copays than CHIP, leaving even insured children without access to 

the services and medications they need. 

CHIP is a very efficient program. In Alabama, our administrative 

cost is less than 6 percent of the total cost of our program. We process 99 percent of applications within 10 days, and 90 percent of our 

claims are processed within 14 days, ensuring our providers are 

paid timely. 

It is important that a decision to extend CHIP funding be made 

soon. States are developing budgets for fiscal year 2016 now. States 

cannot make adequate plans with the uncertainty of continued 

funding for CHIP. Families are relying on you to make this deciVerDate Mar 15 2010 18:10 May 11, 2015 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 R:\DOCS\94479.000 TIMD
15 

sion soon. The uncertainty of CHIP continuation is stressful for 

them. The uncertainty also is stressful for employees of these programs. We may lose our very best employees because of this uncertainty. They may seek employment elsewhere. 

Before CHIP, the un-insurance rate for children in Alabama was 

15 percent. In 2013, the un-insurance rate for Alabama was 8.2 

percent. CHIP is successful. It was started to give kids access to 

health insurance. There is still a need for CHIP. Through CHIP, 

you have provided routine and life-saving care to our kids. 

I ask you to extend funding for the Children’s Health Insurance 

Program, and to do it soon. 

Thank you again, chairmen, ranking members, and distinguished 

members of the committee, for allowing me to speak. 

Senator ROCKEFELLER. Thank you very, very much, Ms. Caldwell. 

[The prepared statement of Ms. Caldwell appears in the appendix.] 

Senator ROCKEFELLER. Finally, we have Dr. Douglas HoltzEakin, who is the president of the American Action Forum and is 

former Director of the Congressional Budget Office, which is fairly 

awesome. He is an acclaimed expert on fiscal policy matters who 

has held positions at multiple conservative think tanks and congressional fiscal commissions. 

We welcome you. 

STATEMENT OF DOUGLAS HOLTZ-EAKIN, Ph.D., PRESIDENT, 

AMERICAN ACTION FORUM, WASHINGTON, DC 

Dr. HOLTZ-EAKIN. Thank you, Mr. Chairman, Senator Portman, 

and Senator Casey. It is a privilege to be here today to talk about 

this topic. I have a longer statement I have submitted for the 

record. 

In these opening remarks, I have three simple points, the first 

of which is that inaction looks very problematic, to say the least. 

The second is that the ACA has changed the landscape and that, 

going forward, the CHIP program should likely be modified to reflect that changed landscape. And three, the CHIP Program has a 

lot of features which have proven to be very, very successful and 

durable and should be kept in the program as those modifications 

take place. Let me elaborate a little bit on that. 

There are three key aspects of the budgetary situation that really 

stand out. The first has been noted: funding ends after 2015. The 

second is that the ACA has a requirement of a Maintenance of Effort for States in their CHIP programs through 2019. The third is 

that the CBO baseline funding for the program is only $5.7 billion 

for the years after 2015. 

The first two of those features mean that if nothing is done, 

States are going to be in significant budgetary trouble. They have 

an obligation to continue the programs, and, depending on how 

they have done it—as a stand-alone, Medicaid expansion, or a partnership—they are going to face deficits of one type or another. The 

third feature means that if the Congress chooses to go forward with 

a program that is anything like the size of the current one, it is 

going to need more budgetary resources. So something is going to 

have to give, and action will be required. 

16 

The second key point is that the ACA has really changed the 

landscape. First and foremost, the exchange subsidies are now 

available for those at 138 percent of the Federal poverty line, up 

to 400 percent, overlapping with the traditional CHIP eligibility. 

Indeed, when the ACA was first passed, I thought we would not 

need a CHIP program anymore. I think many people thought that, 

but it turns out that is just not true. 

As has been mentioned, there is this family glitch in the ACA 

where employers can satisfy their obligation under the mandate by 

offering the employee coverage, but not family coverage, and, as a 

result, he or she will have a family and children who are not eligible for subsidies in the exchanges. Our estimate at the American 

Action Forum is that there are about 1.6 million children in CHIP 

right now who will find themselves in that situation. There are another 645,000 who are uninsured at the moment who will find 

themselves in that situation. That is a population that CHIP traditionally has covered and should cover going forward. 

It is also true that, depending on how States have done it, some 

of those who use CHIP money to expand Medicaid are going to 

have insufficient funding if nothing is done. That is another almost 

500,000 children at risk. That brings a targeted population of about 

2.7 million that have a real need for a CHIP program, despite the 

passage of the ACA. 

The third thing I would mention is, simply, in trying to remodel 

the program for the future, hold on to some things that have been 

successful. The bipartisanship has been mentioned in the past, and 

I want to echo that. When I was CBO Director, working on CHIP 

was a relative pleasure. Very few Senators yelled at me. [Laughter.] 

It would be wonderful to see that tradition continued. It also is 

a program that, in part, got that success because it was narrowly 

targeted. It is not an open-ended entitlement. Congress thought 

hard about who belonged in there and provided the funds for that. 

Right now, if we did the 2.7 million that I mentioned, that would 

be under $6 billion a year, based on a rough estimate of ours. Or 

you could continue the program in its current incarnation, and that 

would be, maybe, $20 billion in 2016. So there is a real range of 

funding amounts that would come out of trying to figure out the 

population that the Congress wants to cover. 

And the last thing is the great success at letting the States manage this in a flexible fashion. I think that has been a hallmark of 

the CHIP program and something that both the committee and the 

Congress should think about as they build a CHIP program for the 

future. 

In closing, just let me add my voice to those congratulating you 

on an outstanding record of public service and say it is a privilege 

to be here today and to answer your questions. Thank you. 

Senator ROCKEFELLER. Thank you, sir, very, very much. 

[The prepared statement of Dr. Holtz-Eakin appears in the appendix.] 

Senator ROCKEFELLER. I am interested in the children who still 

have to be reached out to, in the Alabamas and West Virginias and 

Pennsylvanias and Ohios, et cetera. There are still so many. 

17 

Let us just take Alabama. I am going to ask you a two-part question, Ms. Caldwell. The business of outreach is often not the question of the State, or a group of doctors, or citizen action groups 

reaching out. It is getting past the parents and getting the parents 

to buy into the program. 

Having health insurance is a fabulous thing. So is having an 

education. But you and I both know that in West Virginia and in 

Alabama, with bus service often scanty for most rural areas, parents will withhold the child going to school, saying, if you go to 

school, it is not going to get you anywhere anyway, so stay home 

and let us work on the garden. 

In other words, that is a problem. That is a problem. It is not 

something that the parents faced—they had education, they did not 

have education—but, with respect to their children, they just think 

differently, and they think in terms of convenience. From their 

real-world perspective, getting an education does not seem to prove 

that it is going to turn into a lot of dollars. 

So, one, how do you go about outreach in Alabama, or how 

should we do it generally? And second, this whole question of disruption is really hard for me. I will just put it this way: it is a really popular program. But it was, I think, Senator Casey, Senator 

Portman, the last amendment at 2 o’clock in the morning on the— 

what was it?—8-day markup we had on the Affordable Care Act. 

It was the last amendment, and the presiding person at that session turned to me—I was sitting at his side—and asked me not to 

bring up CHIP. I did not ask him what his reasons were. I just said 

that I was not going to follow those instructions. I was going to 

bring it up, and it did pass. 

We talk about bipartisanship, how people agree on things, but 

then things can come up, either placement or disposition of time, 

or the mood of the leadership, or whatever it is. Politics can come 

into it. So you cannot always count on something which has been 

bipartisan to continue to be bipartisan. I hope we can. All I know 

is, I am fighting really hard, knowing that there are people who do 

not want to see this happen. 

So could you address the question of outreach and also the question of disruption and why having multiple ways of going at the 

CHIP program is comforting to your Governor and to Governors 

throughout the United States? 

Ms. CALDWELL. I would love to, and I too would like to add my 

thanks for your service, particularly to the children of our country 

and your great CHIP Director, Sharon Carte. She is one of my very 

special colleagues and friends, and she is retiring in the near future as well, but she has just worked so hard for the children of 

West Virginia. 

So, outreach—I think Alabama has some best practices around 

previous outreach. We had always conducted a lot of outreach targeted to all uninsured children in our State. The higher percentage 

of those were Medicaid-eligible, as is seen in every other State. 

The bulk of the uninsured children in our country are actually 

Medicaid-eligible, then a smaller proportion are CHIP-eligible. 

Approximately 21⁄2 years ago, we stopped outreach in Alabama 

because of State budget problems. There just was not sufficient 

State funding for us to continue the outreach we were doing. ParVerDate Mar 15 2010 18:10 May 11, 2015 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 R:\DOCS\94479.000 TIMD
18 

ticularly, we could not really afford for our program to grow at the 

rate it had been growing, so we stopped outreach. Nobody was particularly happy with that. It was just the reality of funding. 

What we found through all of the years we were doing outreach 

is that it is important to keep the message out there continuously, 

because families find themselves in different situations. If your 

children have always been privately insured, you may tend to not 

pay that much attention to Medicaid or CHIP. Then all of a sudden, there may be a job loss, and the family needs these programs. 

So we found that we needed to be out there telling families what 

Medicaid was, what CHIP was, really targeting all of the uninsured children. We have always partnered with all of our provider 

groups. The Alabama chapter of the American Academy of Pediatrics is just one of our number one partners. 

So, even though the State has not conducted organized outreach 

in the last few years, our community partners have absolutely 

stepped up. So, in getting the word out, getting the information out 

to all of our partners, we certainly have always partnered very 

closely with school nurses and other school staff. So just being everywhere and targeting all of the uninsured children I think is 

great, and I certainly have hated that we have stopped outreach in 

Alabama. Hopefully it will come back before too long. 

As far as the disruption, if funding is not continued for CHIP, it 

is going to be a nightmare. It is going to be a nightmare on many 

levels. Certainly on the State level, we are already dealing with 

issues related to the uncertainty of CHIP funding. We are preparing our 2016 budget right now. What I have asked my staff to 

do is to prepare a budget assuming we are funded and assuming 

the current match rate, because, as you know, the law calls for an 

increase of 23 percentage points for the Federal match rate for 

CHIP beginning in 2016. That would be 100-percent Federal funding for Alabama. 

That versus no continuation of funding which—I see a zero. That 

is two opposite ends of the spectrum, zero funding versus 100- 

percent Federal funding. So we are picking something in the middle of the road. 

That is just my guidance to my staff. Now, as far as how the legislature will view funding the program under this uncertainty, I 

think we will just have to wait and see. We have families already 

getting stressed. We have staff already getting stressed. 

When we enroll a child in CHIP, we award them 12 months of 

continuous coverage. So right now, within just a month, when we 

award a child 12 months of coverage, we are not certain that we 

can actually guarantee that 12 months of coverage because, by that 

point in time, if funding has not been extended, possibly the program may not even be in existence. Even that question comes with 

a huge amount of uncertainty in that, if we knew the program was 

ending September 2015, we would really need to start ramping 

down, quit enrolling new kids, possibly start disenrolling current 

enrollees well before that. 

We cannot really do that because, if funding was extended at the 

last minute, then we would be in violation of Maintenance of Effort. The truth is, there seems to be an awful lot of uncertainty 

19 

around a State’s obligation to the Maintenance of Effort requirement even if funding is not continued. 

So those are just a few examples of why I think it would be a 

nightmare, and the families and the enrolled children are going to 

be the most affected by far, because just the peace and comfort that 

enrollment in CHIP has given so many families—this issue just 

brings about a lot of anxiety. For many of the children who are disenrolled from CHIP, they may find coverage through an employer 

plan or a marketplace plan, but it is my belief that many will not, 

and they will go back to being uninsured and not have access to 

the health services that they need. 

Senator ROCKEFELLER. I thank you very, very much, and I apologize to Senator Casey and to Senator Portman that I have overrun 

my time. 

So let us go to Senator Casey, followed by Senator Portman. 

Senator CASEY. Mr. Chairman, thank you very much. You have 

that prerogative anytime, but I guess you have it especially today, 

to go over your time. 

We are grateful for the witnesses’ testimony. There is a lot to 

focus on, but I wanted to focus on the consequences of inaction, the 

consequences of not moving forward in the direction that we all 

hope. Mr. Lesley, could you walk through that, just kind of what 

could happen if we do not act? 

Mr. LESLEY. A couple of things, I think, are important. I think 

my colleague talked about some of the things that her State faces. 

I would also say that—and I would emphasize Ms. Caldwell’s point 

on what happens to the families and the uncertainty around that 

and whether the State can commit to a 12-month continuous enrollment. 

There is also the issue of the States and their contracts with providers and plans. So how does a State sign a contract with a managed care provider, and how does a managed care provider sign 

contracts with their provider networks, when there is so much uncertainty about the future of the program, and so much uncertainty 

about the funding levels, and so much uncertainty about the Maintenance of Effort provision and what all those things mean? 

So for us, I think that, even with all the positives about CHIP 

and all the issues that we found that would happen to kids if they 

lose insurance, we all know—I have worked up here for 12 years— 

things happen in Congress, and, if we wait until next year, you 

would have to look at the vehicles. Would we try to attach it to the 

SGR? Would there be some sort of budget reconciliation package? 

There is so much uncertainty around any of that. 

In 2007, we know we had this experience: President Bush vetoed 

the Children’s Health Insurance Program at one point, and, as we 

went through the process, the program actually expired. States 

were beginning to send out dis-enrollment notices to families. So 

dis-enrollment notices went out to families in something like more 

than a dozen States at some point as funding was starting to lapse. 

Fortunately, Congress stepped in at that point and did an extension. But it was a disaster, because States were looking to fire employees, families were freaking out because they were being told 

they were about to lose their coverage, and providers did not have 

any certainty. 

20 

One of the things that we know is so important about CHIP in 

this whole issue of 12-month continuous coverage is that the incentives are to make sure that the kids remain healthy. It really disrupts that, to use Senator Rockefeller’s term. 

Senator CASEY. I wanted to highlight the chart that you have on 

page 3 of your testimony and just note it for the record, and not 

by way of a question, just by way of highlighting it. Based upon 

your Figure 1 on page 3, if you start in 1997, 14 percent of the children in the country were uninsured. As of 2012, that was cut to 

7 percent, so cut in half in that time frame. Obviously, 7 percent 

is still too high in my judgment. We have work to do, but it is a 

substantial achievement. 

Moving to Dr. Perrin, I guess the point that you made is an oftrepeated maxim, which is that children are not small adults. You 

cannot just take a health care program and impose that upon the 

life of a child and expect to get the results we hope for. 

I think what your testimony gave us in addition to validating the 

program from the perspective of the American Academy of Pediatrics—we certainly appreciate that—is a to do list at the end of your 

testimony: fully funding CHIP through at least 2019, number 1; 

number 2, expanding awareness; number 3, facilitating enrollment; 

number 4, maximizing comprehensive coverage and affordability; 

number 5, enhancing the quality measurement; and number 6, ensuring adequate payments for physicians. So, among other things, 

that is critically important. I wanted to ask you if there is anything 

else, any other point you wanted to make from the vantage point 

of the Academy? 

Dr. PERRIN. Senator Casey, thank you. As a native Pennsylvanian, you know a lot about what is going on in CHIP in Pennsylvania. It is an incredibly robust program, really important to the 

children and families in your great State, so I think it is really critical that we maintain it. 

I talked about prevention. I really want to stress that. Obviously 

we are interested in prevention of coronary artery disease in 50- 

year-old people as well, but the prevention aspect of what we do 

with children is so critical to what is going on. We know so much 

more about the science of development than we did even 10 years 

ago. We know how much more important it is that we provide early 

intervention services in the health realm, to really keep kids growing well and successfully. 

We know how important it is to our future economy, frankly, 

that we have a healthy workforce ready to go to work and keep our 

economy robust. So that preventive aspect is really critical, and it 

is one of the key aspects of the CHIP program, also of the Medicaid 

program, by the way, really a critical part of what is going on 

there. 

I will make one other quick comment, which is, we did pass 

Medicare a couple years ago, in 1965. At that time, a third of elderly Americans lived below the poverty line. Today it is 8 percent, 

and it is partly because families were kept from health-related 

bankruptcy. 

The CHIP program does some similar things. It does not cut our 

poverty rate as much as I might like for children, but it surely 

keeps families able to do things to raise their kids effectively, to 

21 

be able to let them play sports safely. All those sorts of things are 

really critical here and, again, because it is a child-specific benefit 

that really works. 

Thank you for that. 

Senator CASEY. Thanks, Doctor. Thanks for the plug for our 

State too. 

Senator ROCKEFELLER. Senator Portman? 

Senator PORTMAN. Thank you, Mr. Chairman, and thanks to our 

witnesses. You have given us some good information to be able to 

prepare for the reauthorization before the end of next year. 

I am just a little confused on the cost run. Probably, that is on 

purpose, but when you look at it, really it is interesting. We have 

a situation now where we are funding through September 30th of 

next year, which will be the fiscal year, and yet you have an authorization through 2019. Under the Affordable Care Act, you have 

a Maintenance of Effort requirement, as I understand it, through 

2019, which is really an unfunded mandate, because the funding 

level is at best uncertain and there is no requirement for funding 

beyond September 30th of next year. 

I also think, on the ACA requirement, it does not have the flexibility you would need, as Ms. Caldwell just talked about in response to the chairman’s question. 

So, Doug, help us here. As a former Budget Director, what is the 

situation here in terms of what is in the baseline? What are the 

assumptions that CBO makes? Is it true that because it is built 

into the baseline that, say a 2-year extension, for instance, would 

actually not end up having a cost attached to it because it is assumed that it will be extended? What is the budget situation? 

Dr. HOLTZ-EAKIN. The CBO budget numbers reflect what I would 

label a gimmick in the final passage when it was last funded. In 

that year, they provided funding for 2015 that consisted of three 

pieces: a lump sum of about $11 billion, one time, and then two 6- 

month appropriations at a rate of $2.85 billion for the first and the 

second half of the year. 

CBO, under its rules, when it is asked to extend a program that 

has not been refunded or reauthorized, continues at the last funding level that the Congress has authorized, so that is $2.85 billion 

for 6 months, or $5.7 billion per year. That is what is in their baseline. 

That clearly will not cover the cost of the existing program if you 

were to run it out for another 2 years. So the Congress would have 

to come up with more resources in the process of doing any such 

extension. And that is a problem for the Congress that was created 

by the way this was done the last time they passed it. 

Senator PORTMAN. You got into this a little bit earlier in your 

testimony, but do you have an estimate of what that cost increase 

would be, what the shortfall would be, through a 2-year extension? 

Dr. HOLTZ-EAKIN. You are running somewhere between the $5.7 

billion you have and the $20 billion you need at the Federal level 

to fund the program under current law. So you have to come up 

with another $14 billion a year. 

Senator PORTMAN. In terms of the ACA requirement, have you 

spent any time looking at that? 

22 

Dr. HOLTZ-EAKIN. Not in great detail. We know it exists. The 

CBO, again, in its baseline, does not reflect the higher match rate 

that the States are counting on, because there is no money to pay 

that higher match rate, so it simply assumes it does not happen. 

Senator PORTMAN. So it goes to a 50-percent match for most 

States? 

Dr. HOLTZ-EAKIN. It just stays at the current match rate, so they 

do not get the 23 percentage point bump, and it is silent on how 

the States are supposed to manage that at the other end. The cost 

of the program still is what it is, but there is no money there. 

I am not a legal expert. Just what you do in terms of Maintenance of Effort when it is not funded, I think remains uncertain 

at best. 

Senator PORTMAN. Yes. I see a lot of heads nodding. [Laughter.] 

Uncertainty is a concern in Ohio, I know. Every State has a little 

different approach to this, but one thing we talked about earlier 

was the fact that States get the opportunity to design these programs so they work best for their children. That flexibility, it 

seems to me, is the positive thing, actually something that, under 

Medicaid, we could use some more of. In States like Ohio, where 

we do have some good innovative ideas, we are looking for the ability to design and administer the program that way. 

One question I would have—and I guess, Ms. Caldwell, you 

would be a good person to answer this—is, could you talk a little 

about the structure of CHIP as a State block grant and how your 

State has used that flexibility that you have to provide coverage 

that is best suited to the children of Alabama? 

Ms. CALDWELL. Absolutely, and I think Alabama is a great 

model. We have a separate stand-alone CHIP program administered in the Alabama Department of Public Health. So we are even 

in a separate State agency from Medicaid, but we have always 

worked very, very closely with the Medicaid agency. We have a 

joint application. We have always had a joint application. Certainly 

with the Affordable Care Act implementation, we built a joint eligibility system. 

When decisions were made about Alabama’s CHIP design, there 

were some very vocal advocates who said, we would like to see a 

separate stand-alone program, not an expansion of Medicaid, and 

that is how it was designed. We actually deliver our CHIP benefits 

through Blue Cross and Blue Shield of Alabama. So our enrollees 

have access to the exact same network as almost every privately 

insured individual in our State. I am not saying that would be the 

best model for every State, but I am saying that it has been a great 

model in Alabama. 

Senator PORTMAN. By the way—I guess this is maybe obvious to 

all of our witnesses, but, in a State like Ohio, where CHIP is part 

of our Medicaid program, we take a hit too. So it is not as though, 

just because you have a stand-alone program, at the end of next 

year you are going to be in some special situation. All States will 

have to face this. 

I guess if maybe one of our other witnesses could just talk briefly—Mr. Chairman, my time has expired. I am sorry. 

Senator ROCKEFELLER. Go ahead. 

23 

Senator PORTMAN. Could someone just talk briefly about what 

impact it would have on States like Ohio where we have it as part 

of our Medicaid program? 

Mr. LESLEY. Senator Portman, thank you. I will speak to that 

issue and also your previous question too, if that is all right. 

So first of all, if CHIP expires, then you would go back to the regular matching rate, and, because of the MOE, you would still be 

covering the kids. So children would lose coverage, and the State 

would be out significant financial resources. I believe in Ohio, it 

would be tens of millions of dollars annually over the course of that 

period of time. I know with California it would be something like 

$500 million dollars, for example. So that is a huge impact that it 

would have on the States. 

With respect to the costs, one of the interesting things we know 

is, when Senator Rockefeller offered his amendment in the Finance 

Committee to save the CHIP program, one of the things that happened with the CBO scoring was that yes, there was a cost because 

you were keeping CHIP operating, but there was a savings because 

the children were not transferring into the Affordable Care Act, for 

example. The costs were estimated by CBO in the Affordable Care 

Act to actually be 25 percent greater than the costs in CHIP. 

As a result of that, there actually was a scored savings for Senator Rockefeller’s amendment, which then allowed for some other 

improvements to the Affordable Care Act. One of the things we 

know is that MACPAC asked the CBO to look at this issue, and 

we understand, secondhand—I have not seen a score on this—that, 

if you keep CHIP in place without the bump, it actually saves 

money. With the bump, it actually costs a little bit, but it is within 

$1 to $5 billion over the 4-year period. 

Senator PORTMAN. Thank you. That is very helpful. 

Dr. Perrin? 

Dr. PERRIN. If I could just make a quick comment, Senator 

Portman. You, I know, have been very supportive of the really 

strong network of children’s hospitals in Ohio. It is one of the real 

great activities in Ohio. It is one of your stellar parts of the 

State—— 

Senator PORTMAN. I wish my wife were here to hear you say 

that. She is very involved in one of them. 

Dr. PERRIN. I attended medical school in Cleveland, so I was a 

part of that for a bit of that time. Seriously, it is an incredible benefit to the State and to the children of the State of Ohio. 

Those hospitals are highly dependent on Medicaid and CHIP 

funding. The ability to build the kind of extraordinary programs 

you have in Cincinnati, Columbus, Youngstown, Dayton, Cleveland, 

Toledo, et cetera—— 

Senator PORTMAN. Akron. 

Dr. PERRIN. Akron, sorry. Thank you, sir. [Laughter.] 

It is really quite amazing. These places would change dramatically without CHIP. There would be cuts in staff. There would be 

cuts in critical programs to take care of kids with asthma in the 

State of Ohio, et cetera. There a lot of things that are going on that 

would change very dramatically in your State if this happened. 

Senator PORTMAN. Yes. That is a great point, and we are blessed 

to have some of the great ones, three of the top ten in the country 

24 

as rated by at least some rating agencies, including yours, probably. 

Thank you, Mr. Chairman. 

Senator ROCKEFELLER. Thank you, Senator Portman, very much. 

I remember when we got our children tested for sensitivity to 

ragweed and all kinds of things. We took them out to the University of Cincinnati. It was a wise decision. You did not mention Cincinnati, so I thought I would. [Laughter.] 

Senator PORTMAN. Cincinnati Children’s Hospital Medical Center, number three in the country based on the latest rating. 

Senator ROCKEFELLER. Of course. Of course. [Laughter.] 

Just as a follow-up to the question of funding which was addressed, CBO actually has come out with an estimate on what all 

of this would cost. It is not $20 billion; it is in the area of zero up 

to $10 billion over that period of 4 years. I only say that, not to 

argue with you, but simply to say that, in this program, where everything is ‘‘maybe, but, if,’’ it is important not to scare people. 

That was not your purpose, but I just wanted to put that on the 

record. 

To you, Dr. Perrin, the whole question of prevention and health 

care for children strikes me as so vastly greater than it would have 

been 10 years ago. I spent a lot of time—every one of my 30 years 

I have been on the Veterans Committee—working on the Gulf War 

Syndrome and post-traumatic stress disorder. Actually, there are 

some remarkable experiments going on with that which are FDAapproved, clinical trials, which show that, by doing certain things, 

with 2 years of psychotherapy, you can reduce PTSD in veterans— 

of course, that takes you all the way back to Civil War veterans— 

by 83 percent. It does not mean it will happen. It is not an approved protocol at this point, but it is on its way. 

It is not just adults or veterans who get stressed out and have 

trauma. Children have extraordinary trauma. You can see that 

going on now in football. You can see that with kids being molested, kids being beaten up. People have kids who really do not 

want to have kids, so the family is in turmoil—a mother-in-law 

does not agree with something, or a father-in-law. Kids can be put 

down, slammed down really hard at a very early age, and remember it for a long time. 

To me, all of that enters into the world of prevention. I remember—and this is a little heretical to say—back in 1989, Senator 

Jack Danforth, who was a marvelous, marvelous Senator, and I put 

out the first kind of discussion about end-of-life care, which was 

immediately slammed down, but we kept bringing it up year after 

year. It began to be discussed. 

I think that sort of discussion is also important for children. 

What is prevention? It is not just looking for tonsillitis or whatever, 

giving an immunization shot. There is a lot of psychological aspect 

to it. I think that this country has opened up enormously to the 

whole field of mental health, and it is much more tolerant, families 

are becoming more tolerant, they are becoming more open, about 

talking about their own situations on that, but much less their children’s needs on that. 

I would love you to take the field of children and expand it from 

when you were practicing, let us say 20 years ago, to today’s conVerDate Mar 15 2010 18:10 May 11, 2015 Jkt 000000 PO 00000 Frm 00028 Fmt 6633 Sfmt 6633 R:\DOCS\94479.000 TIMD
25 

text of horrible television and all kinds of traumas going on in all 

directions. In what ways are children, do you think, more vulnerable and, therefore, more needy of the kind of prevention that the 

CHIP program provides? 

Dr. PERRIN. Thank you, Mr. Chairman. This is a tremendously 

important area for how we think as pediatricians. So we are really 

committed to the notion that a number of folks are working on 

about making communities places where children can be healthy, 

where we have a culture of health as part of what our communities 

are about, rather than a culture of abuse or a culture of violence 

or a culture of danger where children are not allowed to go outside 

because they may get shot, et cetera. 

We really are working to change that kind of notion. That is the 

kind of prevention that we really are working on. It is really critical. We know so much more about the science of brain development than we did 15 years ago, and we know that those experiences you just mentioned, about being slammed down and so forth, 

leave permanent scars, permanent changes in brain architecture 

and neuroendocrine function of the brain, that really stay there forever and really do limit the child’s ability to do the kinds of things 

that she ought to be able to do as she grows up. So that is where 

we think of prevention, and we as clinicians are increasingly working on the area of prevention in our collaboration with our other 

partners in communities to make communities a place of health. 

So one of the things that is really exciting about CHIP and Medicaid today is a return to the notion that mental health really belongs in community health. It should not be carved out as it was 

for probably 25 years, making it such that I could not see a patient 

in my office with a diagnosis of attention deficit hyperactivity disorder because that was a psychiatric diagnosis. I certainly saw kids 

with that diagnosis in my office all the time, but I was not allowed 

to do so under the carve-out arrangements. 

Preventative services—identifying children early, identifying 

family issues early—were very difficult to do because we carved 

them out of regular health. We considered mental health not regular health. Well, we are bringing it back in. 

Senator ROCKEFELLER. You could see it, but you could not do 

anything about it. 

Dr. PERRIN. You could not do anything about it; right. We are 

bringing that back in. Medicaid and CHIP programs across the Nation, in so many of our States, are moving to reintegration of mental health into primary care. 

I will tell you, by the way, clinically, it is incredibly exciting to 

me. It is so much fun. It is so interesting to work with families to 

sort of help them understand their strengths, not their weaknesses, 

to help them build on that, help them think about how to nurture 

children effectively. That is where we are going, and again, Medicaid and CHIP are moving back in that direction and allowing us 

to do it. These are really exciting times. 

Senator ROCKEFELLER. I am already over my time, and I want 

to go to Senator Stabenow and, of course, the chairman. 

One of the things that always disturbs me—I work a lot with 

seniors, as the chairman has done for his whole life. One of the 

26 

things you see is doctors in medical school going into geriatrics, 

and they are very intense, very determined on that. 

When they get into the field, it does not pay as well as some of 

the other specialties. That was, sort of, one of the things that 

brought about that ‘‘resource base relative to value scale’’ adjustment back in—what was it?—1989 or something like that, where 

you try to get more parity between primary care physicians and the 

better-paying specialties. 

We found that geriatricians were wandering away from geriatrics 

and going into other fields for which they were, for the most part, 

trained. On the contrary is this new emphasis and the excitement 

which you exhibit, and all of you exhibit, in terms of taking care 

of children. And they are not little adults, but they are getting a 

lot of what adults are getting, but have no defenses against it. 

They just absorb it and so it, sort of, sits in there roiling. 

Are you finding that people are more attracted to being pediatricians? Are the rolls growing on that? 

Dr. PERRIN. So we have been fortunate in pediatrics in continuing to maintain a pipeline of young people excited about this 

field and coming into it. I think we are, actually, still doing all 

right. We are not sure why, because it never pays well compared 

to all of our other areas in medicine. 

Behind me is a young person from the great State of West Virginia who is a young person training in medicine and pediatrics together. These are people who are committed to doing this, and that 

is what we still recruit. We have not seen a drop-off in people coming into pediatrics. I am really excited to be able to say that. 

Now, you know, we still have lots of problems in financing, paying for the kind of care we are trying to provide. Our pediatric subspecialties are not a great pipeline right now. We have a lot of 

places where we are not getting the people who are kidney specialists, or heart specialists, or blood and guts specialists coming into 

pediatrics. We need to be working on paying them better, but the 

Medicaid payment increase is only for primary care. We do not 

want to treat a child with cystic fibrosis as being worth only twothirds what a child without cystic fibrosis is. 

So we do have some issues to deal with here, but the exciting 

thing is, it is an incredibly rewarding life. I can say that personally, how wonderful it has been to be a pediatrician in my career. 

We are still getting wonderfully bright, interesting, committed, passionate people coming into our field. It is different from geriatrics. 

Senator ROCKEFELLER. That is great. 

Senator Stabenow? 

Senator STABENOW. Well, thank you very much, Mr. Chairman. 

I am so glad I got here before the meeting was over. I apologize, 

I was—— 

Senator ROCKEFELLER. It was not going to be over until you got 

here. 

Senator STABENOW. Well, thank you. I was on the floor, as you 

know, from 3 o’clock to 4 o’clock with other business. I loved when 

I came into the room that you were talking about mental health, 

one of the many, many reasons that we are not letting you leave, 

by the way. You may think you are leaving, but we are not letting 

27 

you. Senator Wyden, our chairman, has a room, and we are locking 

you in it. So we are not going to let you leave. [Laughter.] 

I really, rather than to ask a question, came specifically, not only 

to say you need to reauthorize CHIP so that anywhere from 2 million to 4.5 million children who are currently enrolled will not lose 

their insurance, but also to thank you as the father of CHIP. You 

are the health care father to millions of children who would not 

have health care or mental health services, would not have preventative services, without the incredible work that you have done. 

I just want to thank you for that. You have not only touched children and families in your beloved West Virginia, but in my beloved 

Michigan, and Oregon, and everywhere in between. There are generations of adults who will live healthier, happier lives, and parents who have gone to bed at night not having to worry about 

whether or not the kids got sick, because of your efforts. That is 

primarily what I wanted to say. 

I am also passionate about treating the entire person, the child 

or adult, and very pleased that, with Chairman Wyden’s support, 

we actually have put in place the beginning of the change here 

with a first-step pilot project to equalize funding in the community 

for mental health and public health. I have said over and over 

again, we need to treat illnesses above the neck the same as below 

the neck and in a comprehensive way. 

So I look forward to working with all of you on that, and to doing 

everything possible to make sure that CHIP is reauthorized. I 

think, most importantly today, it is an opportunity to say ‘‘thank 

you’’ on behalf of tens of millions of people in the country who are 

living better lives because of Senator Jay Rockefeller. So, thank 

you. 

Senator ROCKEFELLER. I will allow that to stay in the record. 

[Laughter.] 

I want to call on the chairman and then Senator Menendez. 

Senator WYDEN. Thank you, Chairman Rockefeller. 

Senator Stabenow’s comments were, of course, spot-on. I am now 

trying to figure out how we are going to enforce some of these 

rules. Senator Stabenow said that Chairman Rockefeller was going 

to be locked in that room nearby, and I am going to have to discuss 

that with Sharon. [Laughter.] 

I think at this point, Chairman Rockefeller, you have gotten the 

drift about how strongly our colleagues feel about you. 

What I want to do—and today has been a hectic afternoon—is 

get back to, kind of, one question which I think is pretty key to preserving Chairman Rockefeller’s legacy. It deals with what I am 

sure we are going to get in this debate as it gets fast and furious. 

I think we are going to get the question with respect to, so we have 

the ACA, we have the Affordable Care Act, and it expands coverage. So, if we have the Affordable Care Act and it expands coverage, so how come we need this other deal called CHIP? 

You and Senator Menendez and everybody else here, you can 

agree that Chairman Rockefeller is the best thing since night baseball, which has been pretty clearly annunciated here. But people 

might still say, so, how come we need the CHIP program? 

So I want to go through something that I think really outlines 

it, because it really raises the issue of what I think people in the 

28 

field have come to call the kid glitch in terms of what might happen, and it actually is sort of a branch of what I am concerned 

about with respect to health policy generally, which we talked 

about during the course of the Affordable Care Act, and that is the 

family glitch. When the free choice voucher that I added to the Affordable Care Act was eliminated, that meant we were going to 

have a bunch of families falling between the cracks. There is going 

to be a family glitch. 

Let us talk about kids, specifically. Now, my understanding is, 

for the purposes of determining if a person is eligible for a Federal 

subsidy to buy health insurance, the IRS bases the calculation off 

the cost of an individual, rather than a family plan. So we are 

going to have some real barriers for families who cannot afford to 

pay the monthly premium for a real family plan. It is going to be 

more expensive. 

So parents may be covered through an employer, though they are 

unable to afford the cost of insuring their child as well. We will 

still be in the situation where Medicaid is often not an option, as 

these families often make too much to qualify, thereby leaving the 

kids in that no-man’s land with respect to being uninsured, generally. 

So to me, that would be a real kid glitch which would come 

about, certainly if CHIP were eliminated, but even if it was reduced substantially. You would have a lot of kids getting hammered by this kind of kid glitch. So I thought of asking this question of two people I have admired for quite some time—Bruce Lesley and Doug Holtz-Eakin. We have others who are very knowledgeable in this field as well. 

Mr. Lesley and Dr. Holtz-Eakin, why don’t you give me your view 

about what your take is with respect to the kid glitch. Am I missing something? What are the implications, because it sure looks to 

me that, certainly if CHIP were even cut back in a significant way, 

we would have a lot of kids in this no-man’s land I have been calling the kid glitch. 

Mr. Lesley, Dr. Holtz-Eakin, either of you. I know Senator 

Menendez has a busy schedule, but I wanted to ask that one question. 

Mr. Lesley? 

Mr. LESLEY. Yes, sir. Thank you very much, Chairman Wyden. 

The kid glitch is absolutely a tremendous problem with respect 

to the interaction between CHIP and the Affordable Care Act. If 

CHIP were to expire, we estimate that somewhere in the neighborhood of 2 million kids could lose coverage because of exactly what 

you described. The family member would be deemed to have affordable coverage, or the employee, but the dependent coverage would 

not be affordable. 

So, even if the family was offered coverage that was maybe like 

8 percent of their family income, they would be deemed to have affordable coverage. The family coverage could be as high as 30 percent of family income, which is absolutely unaffordable. Often, we 

know for a fact that employee coverage is less subsidized for family 

coverage, and family coverage is 2.7 times the cost of employee-only 

sponsored coverage. 

29 

It is a huge issue. In addition to that, I would note that the 

Wakely Group report shows that, even for the kids who can migrate and who can get subsidies, we also know, even for them, the 

cost of coverage, as Chairman Rockefeller talked about earlier, is 

as much as nine times more expensive in the Affordable Care Act 

plans than it is in CHIP. 

The cost would go up substantially in either setting. The interesting thing to note is that CHIP has been deemed to be a cheaper 

package than that in the exchange plan. So it does not make a lot 

of sense that we would move kids from one to the other and leave 

kids stranded, either uninsured or with more costly out-of-pocket 

costs and fewer benefits for more money. It would cost the Federal 

Government more money. 

That whole rationale, it leads us to very strongly support the extension of CHIP. 

Senator WYDEN. Dr. Holtz-Eakin, is there anything you want to 

add? 

Dr. HOLTZ-EAKIN. As I emphasized in my remarks at the outset, 

this is a real problem. There is no way around that. Our numbers 

are a bit higher. We think if you combine the kid glitch and those 

who get CHIP money devoted to Medicaid expansions, we have 2.7 

million children in this category of risk. 

The thing I would emphasize for the committee and the Congress 

is, it is really not a matter of bigger or smaller. CHIP should 

change. It is in a different environment. There are other vehicles 

for coverage for other people, and it now resides in an insurance 

landscape. This is very different than the one in which it was created. It would be beneficial for Congress to address the funding 

cliff that it faces, but also to think about a CHIP program for the 

future that fits into this landscape. 

Senator WYDEN. Thank you. Thank you, Mr. Chairman. 

Senator ROCKEFELLER. Thank you very much. 

Senator Menendez? 

Senator MENENDEZ. Thank you, Mr. Chairman. I want to talk 

about two dimensions of CHIP that I think sometimes do not get 

the attention they deserve. Having heard the last answer about the 

kid glitch, in my mind it is even more imperative. 

Mr. Lesley, in your testimony, you mentioned something that I 

do not think gets enough attention when discussing CHIP, and that 

is the impact it has on reducing racial and ethnic disparities. And 

then there is the success of the promotora models of engagement. 

As a matter of fact, this past Sunday, Nicholas Kristof and Sheryl 

WuDunn published an article in the New York Times highlighting 

the benefits of early intervention with pregnant women and newborn babies. 

Mr. Chairman, I would ask unanimous consent that that article 

be included in the record. 

Senator ROCKEFELLER. So ordered. 

[The article appears in the appendix on p. 67.] 

Senator MENENDEZ. It highlights a substantial benefit to children and families from early intervention and home visitation. For 

example, these early intervention programs resulted in a 79- 

percent reduction in child abuse and neglect, a greater than 50- 

percent reduction in arrests later in a child’s life, and more than 

30 

2 fewer years on public assistance programs. So, if you combined 

those evidence-based programs, they offer nearly a $6 return for 

every dollar that we invest. 

The article also highlights the work of the Nurse-Family Partnership, a group that I have worked with extensively on the Maternal, 

Infant, and Early Childhood Program, which provides women and 

children incredibly important and successful services. 

So that is a big preface, but what I want to get from you is, can 

you speak to the impact on children starting at childhood and moving through adolescence when they have access to services like 

home-visitation alongside other health care services as well? 

Mr. LESLEY. Yes. Thank you, Senator Menendez. First and foremost, I would also like to acknowledge an amendment that you offered that was so important in all of this, which is the Child Only 

Option, which really recognized that children and families often get 

their coverage separate and apart from their parents. Their parent 

may be a veteran and have VA care, but the child gets coverage 

under Kinship Care. Their grandparents may be on Medicare, but 

they need to get CHIP coverage. That amendment has been huge, 

and we are really working to try to make it work. 

CHIP and Medicaid have had an enormous impact on health disparities. I would note a National Institute of Medicine report in my 

testimony that talked about some of the impact on disparities. 

There are also reports from the CDC and ASPE that talk about 

that. 

The coverage differences have been remarkable. We have really 

shrunk the disparities in coverage. I would note exactly what you 

said—also noted in Dr. Perrin’s testimony and a question I answered—which is this importance of prevention. And NFP has 

proven that for every dollar you spend, you save enormous amounts 

of money in long-term savings. It is a medical model where nurses 

go into the home, and we really believe that it has really facilitated 

the combination of Medicaid and CHIP in partnership with organizations like NFP. 

Also, you mentioned the community health workers or promotoras program. When I worked for Senator Bingaman, there was 

a grant that went to a promotora program in Las Cruces, NM, and 

they had a target of trying to reduce the uninsured rate. I think 

the uninsured rate in Las Cruces was something around 35 percent, about a third. Literally, these two women got this grant and 

went from county fair to county fair doing the outreach that Senator Rockefeller was talking about doing—outreach to the community. They had a target of ‘‘x,’’ and they actually exceeded it. 

The other day we were laughing, because you have 102-percent 

coverage in Las Cruces now. It was enormously successful, and, not 

only was it successful in getting coverage to people, but it was also 

successful in helping families navigate the system. That is another 

bill you have done in the past, the Patient Navigator, which really 

helps people navigate the health care system. It was huge for the 

people in Las Cruces, the combination of those things working together. 

Senator MENENDEZ. I appreciate it. Part of our challenge when 

we score here is that I wish we scored in ways in which we recogVerDate Mar 15 2010 18:10 May 11, 2015 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 R:\DOCS\94479.000 TIMD
31 

nize the upside, like the ratio I just described, so that we could factor that in. 

If I may, Mr. Chairman, could I ask one other question? 

Senator ROCKEFELLER. Please. 

Senator MENENDEZ. Dr. Perrin, first of all, I want to thank you 

and the Academy for the work that you did with me and Senator 

Enzi on the Autism Care Act earlier this year. I think it is incredibly important. 

As you know from that, the State of New Jersey has the highest 

incidence of children diagnosed with an autism spectrum disorder—one in 49 receiving a diagnosis by the age of 8, compared 

to one in 68 nationally. Providing resources for children with autism and their families is one of my top priorities, and we are elated that the President signed the Autism Care Act into law, which 

continues some critical Federal autism programs that were set to 

expire and a provision that I included in the Affordable Care Act 

requiring autism services to be included as essential health benefits in all new marketplace insurance plans. 

I want to see if you can help me discuss the role that CHIP plays 

in providing critical behavioral health and autism services to children, and how that help and intervention impacts a child in the autism spectrum disorder in terms of how we maximize whatever 

their God-given ability might be, and how it affects them as they 

grow up? 

Dr. PERRIN. Thank you, Senator Menendez, and thank you so 

much for your incredible advocacy for the Autism Care Act. We are 

really grateful for that. We think that is an incredibly important 

act for America’s children, and it is doing really some extraordinarily important things. 

I have been talking about prevention and early intervention all 

afternoon. I think it is really the critical part of it. We know in an 

area like autism that it is really critical that we provide services 

early on, because the brain is still more plastic in a child who is 

6 months or a year old to 2 years old than in a child who is really 

over the hill at age 5—not really, of course, but still, it is really 

critical to identify kids early and to get them the kind of early 

intervention services. 

You mentioned before, home-visitation as well. It is an area that 

we have been incredibly supportive of as well, and it is one where 

we are working very much to integrate and really connect much 

more actively what is happening in home-visitation and what is 

happening in community-based pediatrics, because we are working 

with the same families. We are trying to make sure that the communication is really going well in that context and that we are 

using that opportunity, again, to build community linkages, link 

families with resources, and try to help families find the kinds of 

resources to let them do better. 

CHIP is really very important, because the benefits in CHIP are 

preventive and child-oriented benefits. Yes indeed, we wanted the 

Affordable Care Act to have similar benefits in the exchange plans, 

but, as we know well, as the exchange plans have been implemented in large numbers of the States, the benefits for children, 

especially in behavioral areas and abilitative services, are not really very good. 

32 

The CHIP benefits are substantially better in those realms. That 

is one of the reasons that we are really strongly advocating for the 

persistence of CHIP here. We will work to make the exchange 

plans better, no question about it. But right now the benefits for 

children in exchange plans in general—very much State options as 

you know—are not great. That is why we are really very committed 

to CHIP as an important preventive benefit for children. 

Senator MENENDEZ. I appreciate that. Thank you, Mr. Chairman. 

Senator ROCKEFELLER. Thank you, Senator Menendez. 

I have a guilt complex because I have not asked you any questions, Mr. Lesley, but I am going to forgive myself in the interest 

of everybody else in this room. [Laughter.] 

All of us have asked you questions but me. So I apologize. 

Let me just say, in bringing this to a conclusion, I am struck by 

that number. Senator Menendez, you said one in 49 in New Jersey, 

one in 68 nationally? 

Senator MENENDEZ. Yes. 

Senator ROCKEFELLER. That is stunning. It has not been reauthorized, CHIP. It is still out there, floating. We are—for reasons 

that only God could possibly understand—going into recess again 

in 3 days. The reason for that is actually something which is fairly 

important in public life, not attractive to many, but important, and 

that is elections. 

That puts terrible pressure on the lame duck session. We are 

talking about dealing with everything from continuing resolutions, 

all of the appropriations, what are we going to do about ISIS, and 

all the rest of it, in a lame duck session forum. That, in turn, will 

be shaped by whoever wins the Senate. If we keep the Senate, if 

we do not keep the Senate, that will have its affect. 

That, in turn, will have its affect on how CHIP is treated or put 

in priority. Lots of things are favored and wanted on a bipartisan 

basis, but they do not make it because the stars and the watches 

do not align properly for a discussion to be had, for votes to be 

held, or somebody can hold that up and cannot be talked out of not 

holding it up. 

The Senate has many, many mysterious ways of protecting the 

rights of the minority and others, but it can fall short in terms of 

passing legislation. So I want to emphasize that CHIP is not yet 

included. It is not included. It is out there still. I think it has terrific bipartisan support, but people are so good at picking something in it they do not like, and they do it dramatically, and then 

it blows up and goes viral. 

I worked very hard with Olympia Snowe to start something 

called the E-Rate to provide connectivity in schools and libraries. 

I am really happy that we did that, and sometimes I am really unhappy that we did it, because that is now the source of hacking, 

that is the source of bullying of children, that is the source of all 

kinds of invasions of privacy, and even shutting down whole hospital systems or power plants. It can have a devastating effect, and 

often the kids who can do this are less than 15 years old. It is the 

property and the power that we have given to people for one purpose but that has been used for other purposes. 

This is not that kind of a discussion. This is simply a matter of 

making sure that we get the CHIP program passed, that we get it 

33 

extended, and that we get it done in what will have to be the lame 

duck session. 

The lame duck session does not sound like anything, but it is. It 

is a regular session. It is just that some people are there who will 

not be there, myself included, in the future. I do not want to fool 

around with CHIP. There just are not that many efforts which are 

as broadly supported. 

I have experienced so many things. Mike Enzi comes from a big 

coal mining State, but it is a different kind of coal mining State. 

It is, sort of, digging it out from the earth from the top. West Virginia has underground mining, which is not so much prevalent in 

Wyoming, and we had a terrible series of explosions there. Senator 

Enzi came and met with the families, with myself and a few other 

Senators. You could just see it working on him and within him. 

One of his colleagues on the Republican side, Senator Isakson, 

was one of those who came, and he still carries in his wallet the 

picture of one of the coal miners who died, which had been given 

to him by one of the coal miner’s children. 

So who knows what it is that passes bills and does not pass bills. 

An endless amount of time helps. We never have that, because the 

world is in such crisis. Things are happening so disastrously and 

so unhealthfully. We have to do it as best we can. 

CHIP is something we can do. CHIP is something we have to do. 

I just encourage all of us to think about children, about the problems they face, and about our responsibility to help them navigate 

their way through those waters. 

I thank all of you for your courtesy in coming, and I wish all of 

us well on the legislation. 

The hearing is adjourned. 

[Whereupon, at 4:48 p.m., the hearing was concluded.] 

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