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94–205 2015

THE FUTURE OF THE CHILDREN’S HEALTH 

INSURANCE PROGRAM 

HEARING 

BEFORE THE

SUBCOMMITTEE ON HEALTH 

OF THE

COMMITTEE ON ENERGY AND 

COMMERCE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

DECEMBER 3, 2014 

Serial No. 113–184 

( 

Printed for the use of the Committee on Energy and Commerce 

energycommerce.house.gov 

(II) 

COMMITTEE ON ENERGY AND COMMERCE 

FRED UPTON, Michigan 

Chairman 

RALPH M. HALL, Texas 

JOE BARTON, Texas 

Chairman Emeritus 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

JOSEPH R. PITTS, Pennsylvania 

GREG WALDEN, Oregon 

LEE TERRY, Nebraska 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MICHAEL C. BURGESS, Texas 

MARSHA BLACKBURN, Tennessee 

Vice Chairman 

PHIL GINGREY, Georgia 

STEVE SCALISE, Louisiana 

ROBERT E. LATTA, Ohio 

CATHY MCMORRIS RODGERS, Washington 

GREGG HARPER, Mississippi 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

PETE OLSON, Texas 

DAVID B. MCKINLEY, West Virginia 

CORY GARDNER, Colorado 

MIKE POMPEO, Kansas 

ADAM KINZINGER, Illinois 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

BILL JOHNSON, Missouri 

BILLY LONG, Missouri 

RENEE L. ELLMERS, North Carolina 

HENRY A. WAXMAN, California 

Ranking Member 

JOHN D. DINGELL, Michigan 

Chairman Emeritus 

FRANK PALLONE, JR., New Jersey 

BOBBY L. RUSH, Illinois 

ANNA G. ESHOO, California 

ELIOT L. ENGEL, New York 

GENE GREEN, Texas 

DIANA DEGETTE, Colorado 

LOIS CAPPS, California 

MICHAEL F. DOYLE, Pennsylvania 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DORIS O. MATSUI, California 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

JERRY MCNERNEY, California 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

BEN RAY LUJAN, New Mexico 

PAUL TONKO, New York 

JOHN A. YARMUTH, Kentucky 

SUBCOMMITTEE ON HEALTH

JOSEPH R. PITTS, Pennsylvania 

Chairman 

MICHAEL C. BURGESS, Texas 

Vice Chairman 

ED WHITFIELD, Kentucky 

JOHN SHIMKUS, Illinois 

MIKE ROGERS, Michigan 

TIM MURPHY, Pennsylvania 

MARSHA BLACKBURN, Tennessee 

PHIL GINGREY, Georgia 

CATHY MCMORRIS RODGERS, Washington 

LEONARD LANCE, New Jersey 

BILL CASSIDY, Louisiana 

BRETT GUTHRIE, Kentucky 

H. MORGAN GRIFFITH, Virginia 

GUS M. BILIRAKIS, Florida 

RENEE L. ELLMERS, North Carolina 

JOE BARTON, Texas 

FRED UPTON, Michigan (ex officio) 

FRANK PALLONE, JR., New Jersey 

Ranking Member 

JOHN D. DINGELL, Michigan 

ELIOT L. ENGEL, New York 

LOIS CAPPS, California 

JANICE D. SCHAKOWSKY, Illinois 

JIM MATHESON, Utah 

GENE GREEN, Texas 

G.K. BUTTERFIELD, North Carolina 

JOHN BARROW, Georgia 

DONNA M. CHRISTENSEN, Virgin Islands 

KATHY CASTOR, Florida 

JOHN P. SARBANES, Maryland 

HENRY A. WAXMAN, California (ex officio) 

(III) 

C O N T E N T S 

Page 

Hon. Joseph R. Pitts, a Representative in Congress from the Commonwealth 

of Pennsylvania, opening statement ................................................................... 1 

Prepared statement .......................................................................................... 2 

Hon. Frank Pallone, Jr., a Representative in Congress from the State of 

New Jersey, opening statement .......................................................................... 4 

Hon. Henry A. Waxman, a Representative in Congress from the State of 

California, opening statement ............................................................................. 5 

Hon. Fred Upton, a Representative in Congress from the State of Michigan, 

prepared statement .............................................................................................. 75 

WITNESSES

Evelyne Baumrucker, Health Financing Analyst, Congressional Research 

Service ................................................................................................................... 6 

Prepared statement .......................................................................................... 9 

Answers to submitted questions ...................................................................... 90 

Alison Mitchell, Health Care Financing Analyst, Congressional Research 

Service ................................................................................................................... 11 

Prepared statement .......................................................................................... 13 

Answers to submitted questions ...................................................................... 91 

Carolyn Yocom, Director, Health Care, Government Accountability Office ....... 16 

Prepared statement .......................................................................................... 18 

Answers to submitted questions ...................................................................... 123 

Anne Schwartz, Ph.D., Executive Director, Medicaid and Chip Payment and 

Access Commission .............................................................................................. 32 

Prepared statement .......................................................................................... 34 

Answers to submitted questions ...................................................................... 131 

SUBMITTED MATERIAL

Letter of December 1, 2014, from U.S. Conference of Catholic Bishops to 

U.S. House of Representatives, submitted by Mr. Pitts ................................... 77 

Statement of U.S. Senator John D. Rockefeller, IV, submitted by Mr. Waxman ........................................................................................................................ 79 

Statement of the March of Dimes, submitted by Mr. Lance ................................ 83 

Statement of the National Association of Pediatric Nurse Practitioners ............ 86 

(1) 

THE FUTURE OF THE CHILDREN’S HEALTH 

INSURANCE PROGRAM 

WEDNESDAY, DECEMBER 3, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON HEALTH, 

COMMITTEE ON ENERGY AND COMMERCE, 

Washington, DC. 

The subcommittee met, pursuant to call, at 10:16 a.m., in room 

2322 of the Rayburn House Office Building, Hon. Joe Pitts (chairman of the subcommittee) presiding. 

Members present: Representatives Pitts, Burgess, Shimkus, Murphy, Gingrey, McMorris Rodgers, Lance, Guthrie, Griffith, Bilirakis, Ellmers, Barton (ex officio), Pallone, Engel, Capps, Matheson, Green, Barrow, Castor, and Waxman (ex officio). 

Staff present: Sydne Harwick, Chief Counsel, Energy and Commerce; Chris Sarley, Policy Coordinator, Environment and Economy; Heidi Stirrup, Health Policy Coordinator; Josh Trent, Professional Staff Member, Health; Michelle Rasenberg, GAO Detailee; 

Ziky Ababiya, Democratic Staff Assistant; Kaycee Glavich, Democratic GAO Detailee; Amy Hall, Democratic Senior Professional 

Staff Member; Debbie Letter, Democratic Staff Assistant; and 

Karen Nelson, Democratic Deputy Committee Staff Director for 

Health. 

OPENING STATEMENT OF HON. JOSEPH R. PITTS, A REPRESENTATIVE IN CONGRESS FROM THE COMMONWEALTH 

OF PENNSYLVANIA 

Mr. PITTS. The subcommittee will come to order. Chair will recognize himself for an opening statement. 

In 1992, as a member of the state House of Representatives, I 

was proud to vote to create Pennsylvania’s Children’s Health Insurance Program, known as PA CHIP. 

In 1997, Congress created the federal CHIP program, which was 

partially based on Pennsylvania’s successful model. CHIP is a 

means-tested program designed to cover children and pregnant 

women who make too much to qualify for Medicaid, but may not 

have access to purchase affordable private health insurance. 

Most recently, the Affordable Care Act reauthorized CHIP 

through fiscal year 2019, but the law only provided funding for the 

program through September 30, 2015. 

CHIP has historically enjoyed bipartisan congressional support, 

and it is widely seen as providing better care than many state 

Medicaid programs. 

2 

Moving forward, Congress should be thoughtful and data-driven 

in our approach. The last time Congress methodically reviewed the 

CHIP program was in 2009 with the Children’s Health Insurance 

Program Reauthorization Act, or CHIPRA. Clearly, since that time, 

the Affordable Care Act has changed the insurance landscape significantly. Provisions of the program which may have made sense 

prior to the ACA might no longer be necessary. Other changes may 

need to be made as well. 

Like many of my colleagues, I believe we need to extend funding 

for this program in some fashion. If we do not, current enrollees 

will lose their CHIP coverage and many will end up in Medicaid 

and on the exchanges—programs which may offer poorer access to 

care or higher cost-sharing for lower-income families. Some will 

lose access to insurance altogether. At the same time, we should 

ensure the program complements, rather than crowds out, private 

health insurance. We should also ensure CHIP is a benefit that is 

targeted to those who are most vulnerable, rather than one that effectively subsidizes coverage for upper-middle-class families. 

It is important that we think carefully about this important program. While program funding does not run out until September 

2015, governors and state legislatures across the country will start 

to assemble their budgets as soon as January. Accordingly, the 

committee is very aware that states need certainty sooner rather 

than later in their budgetary planning process, and that is why 

Chairman Upton and Ranking Member Waxman, along with their 

Senate counterparts, engaged governors earlier this year to request 

their perspective on the program. And that is why we are hearing 

from witnesses in our hearing today. 

So I look forward to hearing from our witnesses on the current 

state of CHIP as we consider the data they will provide, and evaluate proposals that will keep the program strong into the future. 

[The prepared statement of Mr. Pitts follows:] 

PREPARED STATEMENT OF HON. JOSEPH R. PITTS

The subcommittee will come to order. 

The chair will recognize himself for an opening statement. 

In 1992, as a member of the state House of Representatives, I was proud to vote 

to create Pennsylvania’s Children’s Health Insurance Program, known as PA CHIP. 

In 1997, Congress created the federal CHIP program, which was partially based 

on Pennsylvania’s successful model. CHIP is a means-tested program designed to 

cover children and pregnant women who make too much to qualify for Medicaid, but 

may not have access to purchase affordable private health insurance. 

Most recently, the Affordable Care Act reauthorized CHIP through FY2019, but 

the law only provided funding for the program through September 30, 2015. 

CHIP has historically enjoyed bipartisan congressional support, and it is widely 

seen as providing better care than many state Medicaid programs. 

Moving forward, Congress should be thoughtful and data-driven in our approach. 

The last time Congress methodically reviewed the CHIP program was in 2009 with 

the Children’s Health Insurance Program Reauthorization Act, or CHIPRA. 

Clearly, since that time, the Affordable Care Act has changed the insurance landscape significantly. Provisions of the program which may have made sense prior to 

the ACA might no longer be necessary. Other changes may need to be made as well. 

Like many of my colleagues, I believe we need to extend funding for this program 

in some fashion. If we don’t, current enrollees will lose their CHIP coverage and 

many will end up in Medicaid and on the exchanges—programs which may offer 

poorer access to care or higher cost-sharing for lower-income families. Some will lose 

access to insurance altogether. 

3 

At the same time, we should ensure the program complements—rather than 

crowds out—private health coverage. We should also ensure CHIP is a benefit that 

is targeted to those who are most vulnerable—rather than one that effectively subsidizes coverage for upper-middle-class families. 

It’s important that we think carefully about this important program. While program funding does not run out until September 2015, governors and state legislatures across the country will start to assemble their budgets as soon as January. 

Accordingly, the committee is very aware that states need certainty sooner rather 

than later in their budgetary planning process. That’s why Chairman Upton and 

Ranking Member Waxman, along with their Senate counterparts, engaged governors earlier this year to request their perspective on the program. 

And that’s why we’re hearing from witnesses in our hearing today. So, I look forward to hearing from our witnesses on the current state of CHIP as we consider 

the data they will provide and evaluate proposals that will keep the program strong 

into the future. 

I yield the remainder of my time to Rep. ——————————————. 

Mr. PITTS. And I yield the remaining time to Dr. Burgess. 

Mr. BURGESS. Thank you, Mr. Chairman. I appreciate you yielding the time. Just before I deliver my opening statement, I want 

to say this may be my last time to serve as your vice chair of the 

subcommittee, and I have certainly enjoyed our time together the 

last two terms, and it has been a great honor of mine to have been 

of service to this subcommittee. I won’t be leaving the subcommittee altogether, but I just won’t be vice chairman in the upcoming term. 

And I am happy to be here this morning to talk about the Children’s Health Insurance Program. It is an important issue in our 

Nation’s healthcare. It is probably one of the most important that 

we will take up over the next year, both nationally and in the individual states. I thank you for recognizing that states do have an 

obligation to generate their budgets early in the next calendar 

year, and Texas, in fact, will do a budget for the next 2 years, so 

they do one for the biennium, so it is important that they have the 

availability of the information about this program going forward as 

they grapple with those budgetary issues. 

One of the program’s greatest strengths is it does provide needed 

flexibility to states, including program and benefit design and different levels of cost sharing. It has allowed for creativity and efficiency in the program, but it also means that each state will be affected differently if the program loses funding at the end of the fiscal year. 

I think we can all agree that the health of our country’s children 

requires our continuous attention, and in particular, kids with special needs. I am anxious to learn more about how this impacts 

Texas and my constituents. It is vital that we learn what the landscape for this program looks like in a post-ACA world. We need an 

accurate picture about the path forward for what CHIP might look 

like going forward, and ways that Congress can be helpful. 

Mr. BURGESS. And I will yield back to the chairman. 

Mr. PITTS. And the chair thanks the gentleman, and again 

thanks him for his service to the subcommittee. We still have two 

more subcommittee hearings next week so I will keep you busy. 

And with that, I would like to congratulate our ranking member, 

Mr. Pallone, for moving up to ranking member of the full committee. Looking forward to working with you in that regard, and 

4 

appreciate having to have been work closely with you the last 4 

years as ranking member. 

So with that, Mr. Pallone, you are recognized for 5 minutes. 

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NEW JERSEY 

Mr. PALLONE. Thank you, Chairman Pitts, and I certainly have 

appreciated working with you. It has been very easy to work with 

you on a bipartisan basis on so many initiatives that actually have 

been passed and been signed into law, and I actually asked Dr. 

Burgess yesterday if he was still going to be on the subcommittee, 

because I heard that he was going to be chairman of one of the 

other subcommittees, and he said, yes, he still expected to be on 

the subcommittee. So I was glad to hear that as well. 

I wanted to thank you, Chairman, for having this hearing today, 

and I very much look forward to making progress toward ensuring 

the continued success of CHIP. It is a vital program that provides 

coverage to 8.1 million low-to-moderate-income children throughout 

the Nation who are unable to afford or not eligible for other forms 

of coverage. And without congressional action, funding for the program will expire next year. This would inevitably lead to gaps in 

coverage for some, and lack of coverage for many others, so we 

must have a conversation now about providing funding as soon as 

possible. 

In fact, I would urge my colleagues to consider an extension during the lame duck to ensure predictability to the many states that 

have come to rely and appreciate the CHIP program. I don’t think 

any would argue that CHIP should not be extended, so let’s just 

get it done. 

Now, you said CHIP was created, it is true, in a Republican-controlled Congress in 1997 as a joint federal-state undertaking so 

that states could help determine how best to design and administer 

their own programs, and ever since, it has traditionally enjoyed bipartisan support. And this historic support from both sides of the 

aisle was reflected in the responses to Chairman Upton and Ranking Member Waxman’s recent letter to the Nations’ governors, 

across red and blue states, including some that did and some that 

did not proactively implement the ACA, governors overwhelmingly 

support the extension of CHIP funding. 

I have a bill, H.R. 5364, the CHIP Extension and Improvement 

Act of 2014, that would achieve this purpose while also instituting 

reforms that would enable states to eliminate administrative burdens and increase the quality of care. By funding the program 

through 2019, we would provide states with more time to plan for 

the future, putting them in a better position to ensure that there 

are no disruptions, and affordance and comprehensive coverage for 

those families who depend on the program. Furthermore, the consequences of this coverage are far-flung. Not only do state governments depend on this funding, it would also support economic activities stemming from providers who provide care to children, as 

well as mothers who are able to keep themselves and their children 

health, and thus, won’t need to take time off from work in order 

to care for their sick children. 

5 

In New Jersey, over 800,000 children are served by New Jersey 

Family Care, which is funded by CHIP, and for these families, getting coverage on the private market is still out of reach, a sentiment that is supported by both the GAO and MACPAC, who have 

shown that even with cost-sharing, CHIP is the most affordable 

and comprehensive form of coverage for these children, especially 

those with complex health needs. And this is true for the millions 

of American families who rely on the program, so I hope that my 

colleagues will join me in supporting action this lame duck to fund 

CHIP for the next 4 years. 

Mr. PALLONE. Did anyone else want any time on our side, do we 

know? I guess not. 

I yield back, Mr. Chairman. Thanks again. 

Mr. PITTS. The chair thanks the gentleman. 

Mr. PALLONE. Mr. Chairman, can I ask unanimous consent to 

enter into the record written statements which I believe you have 

from Families USA and the American Academy of Pediatrics? 

Mr. PITTS. All right, and we have given this to you as well, a 

joint letter from the U.S. Conference of Catholic Bishops, Catholic 

Health Association of U.S.—Catholic Charities USA, to add to that 

UC request. 

Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. PITTS. On our panel—and all Members’ written opening 

statements are being made part of the record. On our panel today 

we have Ms. Evelyne Baumrucker, Analyst in Healthcare Financing, for the Congressional Research Service; Ms. Alison Mitchell, 

Analyst in Healthcare Financing, Congressional Research Service; 

Ms. Carolyn Yocom, Director, Health Care, U.S. Government Accountability Office; and Dr. Anne Schwartz, Executive Director, 

Medicaid and CHIP Payment and Access Commission, MACPAC. 

Thank you for coming. You will each be given 5 minutes to summarize your testimony. Your written testimony will be placed in 

the record. 

And, Ms. Baumrucker, we will start with you. You are recognized 

for 5 minutes for your opening statement. 

Mr. WAXMAN. Mr. Chairman—— 

Mr. PITTS. I am sorry—— 

Mr. WAXMAN. Yes. 

Mr. PITTS [continuing]. I didn’t notice you come in. We have the 

ranking member, before you begin. 

Chair recognizes the ranking Member, Mr. Waxman, 5 minutes 

for his opening statement. 

OPENING STATEMENT OF HON. HENRY A. WAXMAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA 

Mr. WAXMAN. Thank you very much, Mr. Chairman. 

There is another subcommittee having a hearing at the same 

time as ours here, and so I am sorry I am late, but thank you for 

this courtesy to me. 

Today’s hearing is about the Children’s Health Insurance Program. This is a rare program in Washington that has enjoyed bipartisan support since its inception in 1997, and I am pleased that 

6 

the committee is again proceeding in a bipartisan fashion; first 

with our letter to the governors, and now with this hearing. 

I strongly support an additional 4 years of funding for the CHIP 

program. The evidence both from the state letters and independent 

research shows that CHIP provides both benefit and cost-sharing 

protections that are critical for children, but are not guaranteed in 

the new health marketplaces or employer-sponsored coverage. For 

the peace of mind of families, and ease of administration and certainty for states, I believe that a longer period allows for needed 

stability. That is why I cosponsored Ranking Member Pallone’s 

Bill, H.R. 5364, that would provide 4 years of funding, and also 

give states flexibilities to make important program improvements, 

like making express lane eligibility a permanent option for states 

looking to reduce bureaucracy and improve the enrollment process. 

I hope that our colleagues on both sides of the committee—the aisle 

in this committee will give the bill a serious look. It is balanced 

and fair, and there is a lot to look for both states and beneficiaries. 

CHIP is only one piece of the healthcare system for children. 

Medicaid covers more than four times the number of children that 

CHIP does; 38 million in all, and with the new marketplaces and 

delivery system reform initiatives, such as medical homes, there 

are many positive developments to improve care for children. 

We have reduced uninsurance to a record low among children, 

but there is more work to be done. No matter where a child receives coverage, we need to ensure that it is comprehensive, childfocused, and affordable for all families. 

I want to also take a moment to honor one of the original authors 

of the CHIP program, Senator Jay Rockefeller, who is retiring this 

year. Senator Rockefeller fought tirelessly to get the CHIP program 

established, he fought tirelessly again to defend the program, and 

strengthen it during its reauthorization. Millions of children have 

better lives because of his work, and I know that he hoped to see 

the program put on a stable funding path prior to his retirement 

at the end of this Congress, and I would like to have his statement 

on the CHIP program inserted into the record for this hearing. 

Mr. PITTS. And without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. WAXMAN. Thank you, Mr. Chairman. Yield back the balance 

of my time. 

Mr. PITTS. Chair thanks the gentleman. 

Now we will go to our witnesses, and we will start with Ms. 

Baumrucker, 5 minutes for an opening statement. 

STATEMENTS OF EVELYNE BAUMRUCKER, HEALTH FINANCING ANALYST, CONGRESSIONAL RESEARCH SERVICE; ALISON MITCHELL, HEALTH CARE FINANCING ANALYST, CONGRESSIONAL RESEARCH SERVICE; CAROLYN YOCOM, DIRECTOR, HEALTH CARE, GOVERNMENT ACCOUNTABILITY OFFICE; AND ANNE SCHWARTZ, PH.D., EXECUTIVE DIRECTOR, 

MEDICAID AND CHIP PAYMENT AND ACCESS COMMISSION 

STATEMENT OF EVELYNE BAUMRUCKER 

Ms. BAUMRUCKER. Chairman Pitts, Ranking Member Pallone, 

and members of the subcommittee, thank you for this opportunity 

7 

to appear before you on behalf of the Congressional Research Service. My name is Evelyne Baumrucker, and I am here to provide an 

overview of the State Children’s Health Insurance Program. My 

colleague, Alison Mitchell, will address CHIP financing and the Patient Protection and Affordable Care Act Maintenance of Effort for 

Children. 

CHIP is a means-tested program that provides health coverage 

to targeted low-income children and pregnant women, in families 

that have annual income above Medicaid eligibility levels, but have 

no health insurance. CHIP is jointly financed by the Federal Government and the states, and is administered by the states. In fiscal 

year 2013, CHIP enrollment totaled 8.4 million, and federal and 

state expenditures totaled $13.2 billion. CHIP was established as 

a part of the Balanced Budget Act of 1997 under a new Title XXI 

of the Social Security Act. Since that time, other federal laws have 

provided additional funding and made significant changes to CHIP. 

Most notably, the Children’s Health Insurance Program Reauthorization Act of 2009 increased appropriation levels, and changed the 

federal allotment formula, eligibility and benefit requirements. 

The ACA largely maintains the current CHIP structure through 

fiscal year 2019, and requires states to maintain their Medicaid 

and CHIP child eligibility levels through this period as a condition 

of receiving Medicaid federal matching funds. However, the ACA 

does not provide federal CHIP appropriations beyond fiscal year 

2015. 

State participation in CHIP is voluntary, however, all states, the 

District of Columbia, and the territories, participate. The Federal 

Government sets basic requirements for CHIP, but states have the 

flexibility to design their own version within the Federal Government’s basic framework. As a result, there is significant variation 

across CHIP programs. Currently, state upper income eligibility 

limits for children range from a low of 175 percent of the federal 

poverty level, to a high of 405 percent of FPL. In fiscal year 2013, 

the federal poverty level for a family of four was equal to $23,550. 

Despite the fact that 27 states extend CHIP coverage to children 

in families with income greater than 250 percent of the federal poverty level, fiscal year 2013 administrative data show that CHIP enrollment is concentrated among families with annual incomes at 

lower levels. Almost 90 percent of child enrollees were in families 

with annual income at or below 200 percent of FPL. 

States may design their CHIP programs in three ways: a CHIP 

Medicaid expansion, a separate CHIP program, or a combination 

approach where the state operates a CHIP Medicaid expansion and 

one or more separate CHIP programs concurrently. As of May 

2014, the territories, the District of Columbia, and seven states 

were using CHIP Medicaid expansions; 14 states operated separate 

CHIP programs; and 29 states used a combination approach. In fiscal year 2013, approximately 70 percent of CHIP program enrollees 

received coverage through separate CHIP programs, and the remainder received their coverage through a CHIP Medicaid expansion. 

CHIP benefit coverage and cost-sharing rules depend on program 

design. CHIP Medicaid expansions must follow the federal Medicaid rules for benefits and cost sharing, which entitles CHIP enVerDate Nov 24 2008 15:07 Jun 04, 2015 Jkt 037690 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-184 CHRIS
8 

rollees to Early Periodic Screening, Diagnostic and Treatment 

(EPSDT) coverage, effectively eliminating any state-defined limits 

on the amount, duration, and scope of any benefit listed in Medicaid statute, and exempts the majority of children from any cost 

sharing. For separate CHIP programs, the benefits are permitted 

to look more like private health insurance, and states may impose 

cost sharing, such as premiums or enrollment fees, with a maximum allowable amount that is tied to family income. Aggregate 

cost sharing under CHIP may not exceed 5 percent of annual family income. Regardless of the choice of program design, all states 

must cover emergency services, well baby, and well childcare, including age-appropriate immunizations and dental services. If offered, mental health services must meet the federal mental health 

parity requirements. 

As we begin the final year of federal CHIP funding under the 

CHIP statute, Congress has begun considering the future of the 

CHIP program, and exploring alternative policy options. The health 

insurance market is far different today than when CHIP was established. CHIP was designed to work in coordination with Medicaid 

to provide health insurance to low-income children. Before CHIP 

was established, no federal program provided health coverage to 

children with family annual incomes above Medicaid eligibility levels. The ACA further expanded options for some children in lowincome families with incomes at or above CHIP-eligibility levels by 

offering subsidized coverage for insurance purchased through the 

health insurance exchanges. Congress’ action or inaction on the 

CHIP program may affect health insurance options and resulting 

in coverage for targeted low-income children that are eligible for 

the current CHIP program. 

This concludes my statement. CRS is happy to answer your questions at the appropriate time. 

[The prepared statement of Ms. Baumrucker follows:] 

9 


94205.014
10 


94205.015
11 

Mr. PITTS. Chair thanks the gentlelady. 

Now recognize Ms. Mitchell 5 minutes for an opening statement. 

STATEMENT OF ALISON MITCHELL 

Ms. MITCHELL. Thank you for the opportunity to appear before 

you today on behalf of CRS to provide an overview of CHIP financing, and the ACA Maintenance of Effort for Children. 

First, CHIP financing. The Federal Government and states jointly finance CHIP, with the Federal Government paying about 70 

percent of CHIP expenditures. The Federal Government reimburses states for a portion of every dollar they spend on their CHIP 

program, up to state-specific limits called allotments. The federal 

matching rate for CHIP is determined according to the Enhanced 

Federal Medical Assistance Percentage, which is also the E–FMAP 

rate, and this is calculated annually and varies according to each 

state’s per capita income. 

In fiscal year 2015, the E–FMAP rates range from 65 percent in 

13 states, to 82 percent in Mississippi. The ACA included a provision to increase the E–FMAP rate by 23 percentage points, not to 

exceed 100 percent for most CHIP expenditures from fiscal year 

2016 through fiscal year 2019, and with this 23 percentage point 

increase, states are expected to spend through their CHIP allotments faster. 

And these CHIP allotments are the federal funds allocated to 

each state for the federal share of their CHIP expenditures, and 

states receive a CHIP allotment annually, but the allotment funds 

are available to states for 2 years. This means that even though 

fiscal year 2015 is the last year states are to receive a CHIP allotment, states could receive federal CHIP funding in fiscal year 2016. 

Moving on to the Maintenance of Effort, or MOE, the ACA MOE 

for children requires states to maintain eligibility standards, methodologies, and procedures for Medicaid and CHIP children from the 

date of enactment, which was March 23, 2010, through September 

30, 2019, and the penalty for not complying with the ACA MOE is 

the loss of all federal Medicaid matching funds. And the MOE impacts CHIP Medicaid expansion and separate CHIP programs differently. For CHIP Medicaid expansion programs, the Medicaid 

and CHIP MOE provisions apply concurrently. As a result, when 

a state’s federal CHIP funding is exhausted, the financing for these 

children switches from CHIP to Medicaid, and this would mean 

that the state’s share of covering these children would increase because the federal matching rate for Medicaid is less than the E– 

FMAP rate. For separate CHIP programs, only the CHIP-specific 

MOE provisions apply, and these provisions include a couple of exceptions to the MOE. First, states may impose waiting lists and enrollment caps, and second, after September 1, 2015, states may enroll CHIP-eligible children in qualified health plans in the health 

insurance exchanges that have been certified by the Secretary to 

be at least comparable to CHIP in terms of benefits and cost sharing. 

In addition to these two exceptions, under the MOE, in the event 

that a state’s CHIP allotment is insufficient, a state must establish 

procedures to screen children for Medicaid eligibility, and for children not Medicaid eligible, the state must establish procedures to 

12 

enroll these children in Secretary-certified qualified health plans. If 

there are no certified plans, the MOE does not obligate states to 

provide coverage to these children. 

In conclusion, fiscal year 2015 is the last year federal CHIP funding is provided under current law. If no additional federal CHIP 

funding is provided, once the funding is exhausted, children in 

CHIP Medicaid expansion programs would continue to receive coverage under Medicaid through at least fiscal year 2019, due to the 

ACA MOE, however, coverage for children in separate CHIP programs depends on the availability of Secretary-certified qualified 

health plans. 

This concludes my statement, and I will take questions at the appropriate time. 

[The prepared statement of Ms. Mitchell follows:] 

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Mr. PITTS. Chair thanks the gentlelady. 

Now recognize Ms. Yocom 5 minutes for an opening statement. 

STATEMENT OF CAROLYN YOCOM 

Ms. YOCOM. Chairman Pitts, Ranking Member Pallone, and 

members of the subcommittee, I am pleased to be here today to discuss the extension of federal funding for the Children’s Health Insurance Program, better known as CHIP. Congress faces important 

decisions about the future of CHIP. Absent the extension of federal 

funding, once a state’s CHIP funding is insufficient to cover all eligible children, the state must establish procedures to ensure that 

those who are not covered are screened for Medicaid eligibility. In 

states that have used CHIP funds to expand Medicaid, children 

will be eligible to remain in Medicaid. Thus, approximately 2.5 million children will continue to receive coverage. However, for the 

over 5 million children who are in separate child health programs, 

their coverage options are different and less certain. These children 

may be eligible, but are not assured eligibility, for the premium tax 

credit and for cost-sharing subsidies established through the Affordable Care Act to subsidize coverage offered through health insurance exchanges. 

My statement today draws on past GAO work which suggests 

that there are important considerations related to cost, coverage 

and access when determining the ongoing need for the CHIP program. Cost: GAO compared separate health CHIP plans in five 

states with state benchmark plans, and these were intended as 

models of coverage offered by the qualified health plans through 

exchanges. Our studies suggest that CHIP consumers could face 

higher costs if shifted to qualified health plans. For example, the 

CHIP plans we reviewed typically did not include deductibles, 

while all five states’ benchmark plans did. When cost sharing was 

applied, the amount was almost always less for CHIP plans, with 

the cost differences being particularly pronounced for physician visits, prescription drugs, and outpatient therapies. And lastly, CHIP 

premiums were almost always less than benchmark plans. 

The cost gap GAO identified could be narrowed, as the Affordable 

Care Act has provisions that seek to standardize the costs of qualified health plans, and reduce cost sharing for some individuals. 

However, this will vary based on consumers’ income level and plan 

selection. Absent CHIP, we estimated that 1.9 million children may 

not be eligible for a premium tax credit, as they have a parent with 

employer-sponsored health coverage, defined as affordable under 

IRS regulations. The definition of affordability considers the cost of 

self-only coverage offered by the employer, rather than the cost of 

family coverage. 

With regard to coverage, we found that most benefit categories 

were covered in separate CHIP and benchmark plans that we reviewed, with similarities in terms of the services in which they impose day visit or dollar limits. For example, the plans typically did 

not impose any such limits on ambulatory services, emergency 

care, preventive care, or prescription drugs, but did impose limits 

on outpatient therapies, and pediatric dental, vision and hearing 

services. We also identified differences in how dental services were 

17 

covered under CHIP and benchmark plans; differences that raised 

the potential for confusion and higher costs for consumers. 

With regard to access, national survey data found that CHIP enrollees reported positive responses regarding their ability to obtain 

care, and that this proportion of positive responses was generally 

comparable with those in Medicaid or those who were covered by 

private insurance. However, access to specialty care in CHIP may 

be more limited than in private insurance. In 2010, our survey of 

physicians reported experiencing greater difficulty referring children in Medicaid and CHIP to specialty care, compared with privately insured children. We also found that the percentage of specialty care physicians who accepted all new patients with private 

insurance was about 30 percent higher than the percentage of 

those who accepted all children in Medicaid and CHIP. 

Over the last 17 years, CHIP has played an important role in 

providing health insurance coverage for low-income children who 

might otherwise be uninsured. In the short term, Congress will be 

deciding whether to extend federal funding for CHIP beyond 2015. 

In the longer term, states and the Congress will face decisions 

about the role of CHIP in covering children once states are no 

longer required to maintain eligibility standards in the year 2020. 

Chairman Pitts, Ranking Member Pallone, and members of the 

subcommittee, this concludes my prepared statement. I would be 

pleased to respond to any questions you might have. 

[The prepared statement of Ms. Yocom follows:] 

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Mr. PITTS. Chair thanks the gentlelady. 

Now recognizes Dr. Schwartz 5 minutes for an opening statement. 

STATEMENT OF ANNE SCHWARTZ, PH.D. 

Ms. SCHWARTZ. Good morning, Chairman Pitts, Ranking Member 

Pallone, and members of the Subcommittee on Health. I am Anne 

Schwartz, Executive Director of MACPAC, the Medicaid and CHIP 

Payment and Access Commission. 

As you know, MACPAC is a congressional advisory body charged 

with analyzing and reviewing Medicaid and CHIP policies, and 

making recommendations to the Congress, the Secretary of the 

U.S. Department of Health and Human Services, and the states on 

issues affecting these programs. Its 17 members, led by Chair 

Diane Rowland and Vice Chair David Sundwall, are appointed by 

the U.S. Government Accountability Office. 

While the insights and expertise I will share this morning build 

on the analysis conducted by MACPAC staff, they are, in fact, the 

consensus views of the Commission itself. We appreciate the opportunity to share MACPAC’s recommendations and work as this committee considers the future of CHIP. 

Since its enactment, with strong bipartisan support in 1997, 

CHIP has played an important role in providing insurance coverage 

and access to health services for tens of millions of low and moderate-income children with incomes just above Medicaid eligibility 

levels. Over this period, the share of uninsured children in the typical CHIP income range—those with family income above 100 percent but below 200 percent of the federal poverty level—has fallen 

by more than half from 22.8 percent in 1997, to 10 percent in 2013. 

Given that the last federal CHIP allotments under current law are 

now being distributed to states, the Commission has focused considerable attention on CHIP over the past year in order to provide 

the Congress with expert advice about the program’s future. This 

inquiry, which is ongoing, has considered the program in its new 

context, given the significant change in insurance options available 

to these families, including the exchanges and employer-sponsored 

coverage. 

In its June 2014 report to the Congress, MACPAC recommended 

that the Congress extend federal CHIP funding for a transition period of 2 additional years, during which time key issues regarding 

the affordability and adequacy of children’s coverage can be addressed. In coming to this consensus recommendation, the Commission considered what would happen if no CHIP allotments were 

made to the states after fiscal year 2015. It found that many children now served by the program would not have a smooth transition to another source of coverage. The number of uninsured children would likely rise, cost sharing would often be significantly 

higher, and exchange plans appeared unready to serve as an adequate alternative in terms of benefits and provider networks. My 

written testimony and the Commission’s June report provide additional information about the nature and extent of these concerns. 

We are currently updating and extending our analyses of benefits, 

cost sharing, network adequacy, and coverage gaps for inclusion in 

our 2015 reports. 

33 

When the Commission made its recommendation to extend funding, it noted that there was insufficient time between then and the 

end of the current fiscal year to address all the issues it identified, 

either in law or regulation. In addition to examining CHIP from 

the perspective of children and families, MACPAC has also considered how different policy scenarios affect the states. Under current 

law, states will run out of CHIP funding at various points during 

fiscal year 2016, with more than half of the states exhausting 

funds in the first two quarters. In the absence of federal CHIP 

funding, states with Medicaid expansion CHIP programs, which 

cover about 2.5 million children, must maintain their 2010 eligibility levels for children through fiscal year 2019 at the regular 

Medicaid matching rate, meaning at increased state cost. By contrast, states operating separate CHIP programs, now serving over 

5 million children, are not obligated to continue funding their programs if federal CHIP funding is exhausted, and will most likely 

terminate such coverage. 

MACPAC’s commissioners feel strongly about the need to extend 

funding for CHIP. A time-limited extension of CHIP funding is 

needed to minimize coverage disruptions, and provide for a thorough examination of options addressing affordability, adequacy, 

and transitions to other sources of coverage. An abrupt end to 

CHIP would be a step backward from the progress that has been 

made over the past 15 years. In addition, congressional action is required so that states do not respond to uncertainty about CHIP’s 

future by implementing policies that reduces children’s access to 

services that support their healthy growth and development. 

Finally, while MACPAC has recommended a 2-year extension, it 

has also stated that this transition period could be extended if the 

problems it has identified have not been addressed within the 2- 

year period. 

Again, thank you for this opportunity to share the Commission’s 

work, and I am happy to answer any questions. 

[The prepared statement of Ms. Schwartz follows:] 

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Mr. PITTS. Chair thanks the gentlelady. Thanks to all the witnesses for your testimony. 

We will now begin questioning, and I will recognize myself 5 

minutes for that purpose. 

Start with CRS and MACPAC. What is the impact on the federal 

budget if federal CHIP funding is or is not extended, and how does 

that differ based on whether the current match rate is increased 

or not, and whether or not it is a 2- or 4-year extension? Ms. Mitchell? 

Ms. MITCHELL. I can’t tell you for sure, that is definitely a question for the Congressional Budget Office, but I can tell you that we, 

as we have said, the children in CHIP Medicaid expansion programs would continue to receive coverage at a lower federal matching rate through at least fiscal year 2019 due to the MOE. If CHIP 

funding ends, we know that at least some children will be covered 

under the qualified health plans in the health insurance exchanges 

with some—with subsidized coverage, and some children would be 

uninsured. And you are talking about the 23 percentage point increase, if that is taken away, then funding for the CHIP program 

would be less than under current law because we would maintain 

the current E–FMAP rates, rather than the 23 percentage point increase. 

Mr. PITTS. Dr. Schwartz? 

Ms. SCHWARTZ. Yes, we received a cost estimate from the Congressional Budget Office for MACPAC’s recommendation, and for 

the 2-year extension CBO estimated that it would increase net federal spending by somewhere between $0 and $5 billion above the 

current law baseline. That’s a very big bucket. If CHIP were fully 

funded, to speak to the 23 percentage point bump, if CHIP were 

fully funded in fiscal year 2016, with the 23 percentage point 

bump, spending would be about $15 billion. Without it spending 

would be $11.3 billion. 

Mr. PITTS. All right, let us stay with you, Dr. Schwartz. What is 

the impact on states if CHIP funding is not extended? 

Ms. SCHWARTZ. The impact on states differs as to whether they 

operate their program as a Medicaid expansion CHIP program, in 

which case they have a continued obligation to provide services for 

those children under the Medicaid program at their regular Medicaid match, which is lower, in the aggregate, about a 43 percent 

increase for states because of the difference between the two 

matching rates. It is different across different states because of the 

design decisions that they have made, and the extent of their enrollment that is enrolled in Medicaid expansion CHIP versus separate CHIP. 

Mr. PITTS. OK. Ms. Baumrucker, there are nearly 270,000 children in Pennsylvania in CHIP. The Affordable Care Act required 

states to transition CHIP children aged 6 through 18, in families 

with annual incomes of less than 133 percent federal poverty level, 

to Medicaid beginning January 1 of this year. This was a big issue 

for people in my district in Pennsylvania. Nationally, do you know 

how many hundreds of thousands of children lost their CHIP coverage this year, and were instead enrolled into Medicaid as a result 

of the Affordable Care Act? 

52 

Ms. BAUMRUCKER. There was an estimate—there we go. There 

was an estimate that was done by the Georgetown Center for Children and Families in August of 2013 that suggested that 21 states 

were transitioning—were required to transition their separate 

CHIP program children into CHIP Medicaid expansion programs as 

a result of the ACA eligibility changes, and according to Georgetown and Kaiser, this represented about 28 percent of CHIP enrollees, or approximately 562,000 children. 

Mr. PITTS. OK. Let’s go back to MACPAC. In 2007, CBO wrote 

a paper saying the literature on crowd-out for CHIP children 

ranged from 25 to 50 percent. A 2012 report from the National Bureau of Economic Research found the upper bound of the rate of 

crowd-out to be 46 percent. What concerns does MACPAC have regarding to what extent this CHIP coverage crowds out private coverage? 

Ms. SCHWARTZ. Clearly, crowding out private coverage is not desirable, particularly in terms of federal spending. MACPAC has not 

done its own analyses of crowd-out, and we have cited the CBO report that you have cited. The Secretary’s recent evaluation of the 

CHIP report—CHIP program has a much lower number. An article 

that came out in Health Affairs a couple of months ago reported 

a much higher number. And I think that the experts are somewhat 

at a loss as to a point estimate. 

We observe private coverage declining, we observe CHIP coverage increasing, but it is very difficult to design a study that properly teases out the role of CHIP in that dynamic. 

Mr. PITTS. Ms. Yocom, you want to comment on that question? 

What concerns does GAO have that might duplicate private—that 

this might duplicate private coverage and unnecessarily increase 

federal expenditures? 

Ms. YOCOM. Well, similar to what Dr. Schwartz said, there is always a concern if you are substituting federal dollars for private 

dollars. One issue with crowd-out is, it is extremely difficult to 

measure, and then even if measured, it is extremely difficult to 

think about causality and what happens with it. 

One of the issues that we ran into in looking at this many years 

ago now, which I think is still relevant, is the fact that the insurance coverage available was not necessarily comparable to what 

was being offered. So while there was a substitution effect, you 

weren’t substituting a similar type of coverage. Under the Affordable Care Act, there will be more standardization of what is a 

qualified health plan, and it may be a little bit easier to take an 

analysis and look and see what types of substitution might be happening. 

Mr. PITTS. Thank you. 

Chair recognizes the ranking member, Mr. Pallone, 5 minutes for 

questions. 

Mr. PALLONE. Thank you. I wanted to ask Dr. Schwartz, in the 

CHIP reauthorization legislation in 2009, Congress gave states the 

new option to reduce bureaucracy and help make the Medicaid and 

CHIP enrollment process easier, called express lane eligibility. And 

this state option was only authorized on a temporary basis, but recently Congress acted to extend it through September of next year. 

This provision allows states to use family data from other programs 

53 

like SNAP to determine Medicaid and/or CHIP eligibility, and it is 

a win for families that don’t have to keep providing the same info 

twice, and it is a win for states who have demonstrated this approach saves administrative dollars. 

It seems to make little sense that Congress would have to keep 

authorizing this commonsense provision. So, Ms. Schwartz, I believe that MACPAC has examined this issue, and could you tell us 

what you have found, and also what the Commission recommends 

with respect to express lane eligibility? 

Ms. SCHWARTZ. Yes—— 

Mr. PALLONE. You put the mic on, yes. 

Ms. SCHWARTZ. One of our statutory requirements is to comment 

on reports of the Secretary to the Congress, and in April, MACPAC 

sent official comments to this committee and to others on the mandated evaluation of express lane eligibility by the department. In 

that letter, MACPAC noted its support for making express lane eligibility a permanent option, presuming that it does not result in incorrect eligibility determinations. 

The Commission also recommended that express lane be extended to adults, which would be consistent with other actions that 

have been taken to simplify and streamline enrollment processes, 

and also would allow processing of the family as a unit, rather than 

processing parents and children separately. 

The Commission also noted that it would allow states—the 13 

states that have used express lane, that have invested in this approach to continue to maintain the gains that they have seen, noting, for example, that the state of Louisiana told the Commission 

that they had reduced 200 eligibility worker positions as a result 

of adopting express lane. 

And finally, in that letter the Commission noted the need for 

guidance from CMS to the states on how to measure the accuracy 

of eligibility determinations. 

Mr. PALLONE. Thank you. Let me ask, as you know, just having 

health insurance isn’t enough; the coverage needs to be affordable, 

both when you go to the doctor, and also in the amount of money 

you have to pay to keep insured. And as you know, Medicaid includes important out-of-pocket cost protections for children with respect to premiums and copayments. And sometimes we hear that 

beneficiaries need to have more skin in the game, or states should 

be allowed to charge beneficiaries more in the name of personal responsibility. I believe MACPAC has looked into the issue of how 

out-of-pocket costs like premiums affect access, and would have you 

found, and again, what did you recommend? 

Ms. SCHWARTZ. Yes, in the Commission’s March 2014 report to 

the Congress, the Commission made a recommendation to align 

premium policies in separate CHIP programs with those in Medicaid so that families with incomes below 150 percent of the federal 

poverty level should not be subject to CHIP premiums. The research shows that children and families at this low level of poverty 

are much more price-sensitive than higher income enrollees, and 

below 150 percent of the federal poverty level, premium requirements increased uninsurance substantially. 

54 

This recommendation would affect only eight states that continue 

to charge CHIP premiums below 150 percent of the federal poverty 

level. 

Mr. PALLONE. Well, thank you, Doctor. I hope we can see Congress implement this commonsense MACPAC recommendation and 

protect low-income children from losing coverage as a result of 

unaffordable premiums. 

And again, I just wanted to ask you, I have heard some people 

argue that Medicaid is somehow harmful for patients, I am getting 

into Medicaid now, and that is because there is inconsistent quality 

or lack of information about quality, and somehow the program is 

bad for patients, but I wanted to ask you, do you think inconsistent 

quality or lack of quality info is a problem unique to Medicaid, or 

is that something our health system as a whole struggles with? I 

was particularly interested in this recent study on the Oregon Medicaid program that shows that Medicaid really does make a difference. And if you could comment on that or any other states. 

Ms. SCHWARTZ. Yes. The Commission recently submitted a comment letter on the department’s report on use of quality measures, 

the science of quality measurement, and the infrastructure for both 

measuring and holding health systems accountable for quality is 

growing. There is more work to be done. A very important factor 

to keep in mind when looking at differences in quality is an adjustment for health status because, clearly, individuals who are sicker 

to begin with tend to have poorer health outcomes. When the proper adjustments are done for health status, Medicaid beneficiaries 

tend to do as well as others. Of course, there is room for improvement across the health system. 

Mr. PALLONE. All right, thank you very much. 

Mr. PITTS. Chair now recognizes the vice chairman, Dr. Burgess, 

5 minutes for questions. 

Mr. BURGESS. Thank you, Mr. Chairman. And I apologize for my 

absence. I am toggling between two subcommittee hearings this 

morning. It is always a challenge. 

Let me ask Ms. Yocom, you were talking to the subcommittee 

chairman about the crowd-out issues. I am actually also interested 

in the provider update rates. We oftentimes hear SCHIP and Medicaid lumped in together, that a patient with a private insurance 

policy has about a 75 percent chance of a physician taking a new 

patient, whereas with Medicaid and SCHIP lumped together, it is 

under 50 percent. Do you have a sense as to where the actual 

CHIP program falls in that? 

Ms. YOCOM. The survey data that we looked at that surveyed 

physicians, I believe we combined both Medicaid and CHIP together. In looking at the MEPS data and the issues about referring 

to specialist care, which seems to be where the biggest access issue 

is, CHIP fared slightly better than Medicaid, and both programs 

fared significantly better than someone who was uninsured. There 

was a statistical difference between those who were privately insured, however. There was better access for someone with private 

insurance in specialty care. 

Mr. BURGESS. I will just—I practiced for a number of years in 

north Texas and my own experience was that it was hard to find 

specialty physicians, particularly in Medicaid because a larger proVerDate Nov 24 2008 15:07 Jun 04, 2015 Jkt 037690 PO 00000 Frm 00058 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-184 CHRIS
55 

portion of my patients—I was an OB/GYN—and a larger proportion 

of my patients were covered by Medicaid rather than SCHIP but 

it was difficult. And one of the obstacles always seemed to be the 

administrative barriers that were placed in front of the physician 

for either being enrolled in the program, difficulty getting paid, reimbursement rates are always an issue, but over and above that, 

there was a hassle factor associated with, particularly Medicaid, 

but I suspect in both Medicaid and SCHIP. 

Has GAO looked into that? 

Ms. YOCOM. Some of the studies we have done would confirm 

that from the perspective of physicians, that it is not just about the 

payment, it certainly is also about the paperwork and the requirements that are involved. 

The thing that is always difficult in looking at the program is 

balancing those requirements for documentation against some of 

the bad actors who are capitalizing on the services, and I think 

that is a constant struggle. 

Mr. BURGESS. And, of course, it is just anecdotal, but I did hear 

from physicians who would tell me, OK, I will see this patient because I like you and you are a friend. I am not going to submit anything for payment because it is just not worth my—I will pay more 

in having my office submit this for payment than I would ever be 

reimbursed. Is that just unique to north Texas, or have you heard 

that in other areas as well? 

Ms. YOCOM. In the times that we have interviewed physician 

groups and things like that, that has come up. There is no way to 

quantify how big that is. I think many physicians do—they do want 

to help people who need care, and they can’t. They also have to run 

a business. 

Mr. BURGESS. Right. 

Ms. YOCOM. So sometimes that is where some of those limits 

come in. 

Mr. BURGESS. Let me just ask a question generally, and really 

for anyone on the panel, but, Dr. Schwartz, it is particularly to you. 

We kind of heard during this subcommittee, during the passage of 

the Affordable Care Act, that once we were able to be in the elision 

fields of the ACA, programs like SCHIP wouldn’t be necessary any 

longer. So is SCHIP still necessary with the full implementation of 

the Affordable Care Act? 

Ms. SCHWARTZ. I think when the Commission took a deep look 

last year at the coverage and the benefits and cost sharing that is 

available in the exchanges, these concerns surfaced, and our analyses primarily relied on GAO’s work comparing benefits and cost 

sharing between separate CHIP programs and benchmarks for the 

design of exchange benefits. 

We are now looking, now that there are real data on premiums, 

and real data on the benefits being offered by plans, we are trying 

to get a better sense of where those differences are and the magnitude of those differences. We have shared some of that information with the Commission, and I would anticipate some recommendations coming from the Commission by our June report 

this year to address those issues around adequacy and affordability. But right now, the Commission’s concern is that the 

changes are not ready for the CHIP kids, and that a significant 

56 

number of kids with CHIP would not be able to afford the exchange 

coverage. 

Mr. BURGESS. Well, I appreciate that answer. And my time has 

expired, so I will leave it there, but I do just want to point out that 

June is great, but we will be talking reauthorization prior to June, 

so all of the, you know, expediting you can do with that report will 

be helpful to members of the subcommittee. 

So thank you, Mr. Chairman. I will yield back. 

Mr. PITTS. Chair thanks the gentleman. 

The ranking member has a UC request. 

Mr. PALLONE. Mr. Chairman, I wanted to ask unanimous consent 

to submit for the record, on behalf of Congressman Lance, a statement submitted for the hearing by the March of Dimes. 

Mr. PITTS. Without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. PITTS. And the chair recognizes the gentleman from New 

York, Mr. Engel, 5 minutes for questions. 

Mr. ENGEL. Thank you very much, Mr. Chairman. Thank you for 

holding today’s hearing. Thank you, Mr. Pallone. 

And let me first say, I have always been a strong supporter of 

CHIP. With funding for the program set to end in less than a year, 

I believe it is really imperative that Congress acts quickly to provide assurances to the states and the children served by this program, that their access to healthcare services will continue. It is 

absolutely imperative. It has been a tremendous success in my 

home state of New York. When CHIP was enacted, there were over 

800,000 uninsured children living in New York. Now we are down 

to about 100,000 uninsured children, which represents a nearly 90 

percent decline. Our program, titled Child Health Plus, is currently 

providing quality affordable healthcare to approximately 496,000 

New York children. And after 2 decades of great success, I would 

like to see funding continue for this very important program, which 

is why I am pleased to be a cosponsor of Mr. Pallone’s legislation, 

the CHIP Extension and Improvement Act, and it is my hope that 

the committee will act quickly on this legislation. 

Let me start with Dr. Schwartz. MACPAC unanimously represented that CHIP funding be extended for 2 years. Can you 

elaborate on what issues MACPAC recommends Congress, HHS, 

and the states focus on in the intervening years to ensure that children maintain access to vital healthcare services? 

Ms. SCHWARTZ. Yes. The Commission’s key concerns are the extent to which children will have an alternate source of coverage, 

the affordability of that coverage, the adequacy of the coverage in 

terms of the benefits that are covered, and the adequacy of the networks, and the differential impact on states. Those are the areas 

in which we are looking, and that is the reason for the 2-year recommendation for funding because those questions can’t be solved 

quickly, but we believe that a 2-year time frame would provide the 

impetus to make those changes to a smooth transition to other 

sources of coverage. 

Mr. ENGEL. Well, thank you. Let me also say, Dr. Schwartz, I 

couldn’t agree more with the statement in your written testimony, 

and I am going to quote you when you said, ‘‘an abrupt end to 

CHIP would be a step backward from the progress that has been 

57 

made under CHIP.’’ And that is so true because the cost of living 

in my area of New York is quite high, and there is a significant 

difference in healthcare costs for those on CHIP, and the child-only 

policies available through our exchange, New York State of Health. 

CHIP has been tremendously successful in providing lower-middle-income children with affordable health insurance, and for them 

to possibly lose that coverage would be very unfortunate. 

So, Dr. Schwartz, we touched on it a little bit before in one of 

the questions, but can you or any of the other witnesses elaborate 

on the cost differences between CHIP and plans available in the 

various state health insurance exchanges that have been examined? Ms. Yocom? 

Ms. YOCOM. Sorry. Yes. We did find that cost was one of the 

areas where we could pretty consistently see that there was a difference between CHIP and the benchmark plans. There is a higher 

use of deductibles and larger deductibles. Premiums were more 

likely to be lower in CHIP. And the other thing, of course, is that 

CHIP is limited to 5 percent of a family’s income. On the benchmark and qualified health plan side, there is a limit on premiums, 

but other costs are not necessarily counted in that limit. So it is 

a little more difficult to be sure that things remain affordable. 

Mr. ENGEL. Thank you. Let me also ask anyone on the panel, if 

CHIP funding does not continue past this fiscal year, what will 

happen to the children in states that run separate CHIP programs, 

but do not have plans in place through their exchanges that are 

comparable to CHIP in benefits and cost sharing? And coupled with 

that is, do states have any obligation to help transition beneficiaries to affordable exchanges plans? 

Ms. YOCOM. The states’ obligation is to take those children and 

screen them first for Medicaid eligibility, and then to consider them 

for coverage under the exchange. Our work identified about 1.9 

million children who are likely not to qualify for the exchange because of having a parent that has employer-sponsored coverage. 

And affordability has been defined as a single, self-only coverage 

amount, and not a family coverage amount. That difference, in 

looking at what the costs are, could place some people out of the 

market in terms of being able to afford—— 

Mr. ENGEL. And that just shows how imperative it is that CHIP 

funding continues past this fiscal year. 

Thank you, Mr. Chairman. 

Mr. PITTS. Chair thanks the gentleman. 

We still have two more hearings next week in the Health Subcommittee, but let me just say in case I don’t get to say it next 

week, we are going to be losing Dr. Gingrey, a very valued member 

of our Health Subcommittee, and I am pleased to recognize him for 

5 minutes for questions at this time. 

Mr. GINGREY. Chairman Pitts, thank you very much. I certainly 

appreciate that. I am going to miss you guys and gals on this great 

committee. 

My question and comment will pertain to fiscal responsibility 

and, indeed, sanity. So before I get into that, I want to make sure 

everybody understands, my colleagues especially, that I think the 

Medicaid program is a great program, going back to 1965. And I 

think the CHIP program, in Georgia we call it Peach Care, I think 

58 

it is a great program, going back to 1997 and 2009, and all that 

has been discussed, but naturally, I am a fiscal conservative, and— 

as we all should be, and worried about the increased spending and 

responsibility, particularly to our states. 

Obamacare included a provision which requires, as you know, the 

states to maintain income eligibility levels for CHIP and Medicaid 

through September 2019 as a condition of receiving payments 

under Medicaid and SCHIP, notwithstanding the lack of corresponding provision federal appropriations for fiscal year 2016 

through 2019. This provision is often referred to, as has been mentioned, the Maintenance of Effort, or MOE, requirement. 

While Medicaid and CHIP costs are increasing, is this effectively 

an unfunded mandate on states? And the last question, and more 

importantly, while a lot of states, a lot of states, have suggested extending the CHIP funding for these—that 4-year gap, is it fair to 

say that they are assuming that the MOE, Maintenance of Effort, 

remains, but they might feel differently if MOE was scraped. And 

I, indeed, have called many times since March of 2010 for eliminating that Maintenance of Effort requirement. I think if—you 

might have more states accepting Medicaid expansion up to 133 

percent of the federal poverty level if they could make sure that the 

people that were enrolled were indeed eligible, and doing that periodically, if it is every 1 or 2 or 3 years or whatever, because we 

want the money to go to those that really need it. 

So any member really of the panel, and we can start with Ms. 

Baumgartner if you like. I know I mispronounced your name, but 

why don’t you go ahead and respond to that for me, if you will? 

Ms. BAUMRUCKER. So I hear—there are a lot of issues that you 

discussed in the—in your question and in your comment about 

whether or not CHIP funding—what is the responsibility of states 

after the MOE—with the MOE in place. And so as we have discussed on the panel today, Medicaid expansion children continue to 

be enrolled in the Medicaid program, and are matched at the federal matching rate for the Medicaid program. The separate CHIP 

children, if there are qualified health coverage through—if there 

are Secretary-certified plans available in the exchanges, separate 

state children would first be screened for Medicaid, and if they are 

eligible, they would be enrolled there. Otherwise, the CHIP program requires them, under current law, to be—if there are certified 

coverage that—enrolled in that coverage. So if you remove the 

MOE requirements, then it would be up to states as to whether or 

not they would continue their child coverage going forward, but at 

this point, that 2019 requirement requires states to maintain Medicaid, and the CHIP question—— 

Mr. GINGREY. Well, Dr. Schwartz, would you like to respond to 

that as well? 

Ms. SCHWARTZ. I would just say that in talking with the folks 

who run CHIP programs in the states, that they are very concerned about needing to know what the future is for their state 

budgeting purposes, and concerned about what will happen to the 

kids that they are currently responsible for. And I believe that is 

well reflected in the letters from the governors—— 

59 

Mr. GINGREY. Well, I am going to interrupt you just for a second. 

I apologize for that, because my time is running out and I wanted 

just to make a comment. 

The question was brought up about the express lane process, and 

expanding that into the future. I am very concerned about the express lane if people that are eligible, let’s say, for the SNAP program are automatically eligible for Medicaid expansion or SCHIP, 

when there are some states, and we know this, who make people 

eligible for the SNAP program by virtue of the LIHEAP program, 

where they are giving them $1 a month to make them eligible, and 

then they are automatically eligible for SNAP. And now this express lane would make some of those people automatically eligible 

for the SCHIP program and Medicaid expansion. So it goes on and 

on and on. And we have a responsibility on this committee to make 

sure that we look at that problem and solve that before we go expanding coverage and appropriations for an additional 4 years. 

So, Mr. Chairman, thanks for your indulgence, and I yield back. 

Mr. PITTS. Again, the chair thanks the gentleman. 

And now recognize the gentlelady from California, Ms. Capps, 5 

minutes for questions. 

Mrs. CAPPS. Thank you, Mr. Chairman, Ranking Member 

Pallone, for holding such an important hearing. 

Since its inception, CHIP, or C-H-I-P, has been a critical 

healthcare program for children. I think we all agree upon that. It 

has let parents rest easier and has shown the Nation what bipartisan support can do to make a real impact on each of our communities. And my background as a long-time school nurse, I can’t impress upon my colleagues, and I know I have run this into the 

ground, but the importance of our children having a formal connection early on to the healthcare system, not just for when they get 

sick, but to keep them healthy, to keep them thriving and ready 

to learn. 

The CHIP program is key to the health and economic security of 

all of our families, linking over 8 million of our Nation’s children 

to care, and together with Medi-Cal, my state’s Medicaid program, 

which we call CHGP in California, these programs have cut the 

rate of children’s uninsurance by half. This is something that must 

be supported and continued. 

And one thing I want to touch on briefly in response to a question earlier from our chairman, MACPAC does offer impressive coverage statistics for children over the history of CHIP. The share of 

near-poor children without health insurance has dropped 22.8 percent in 1997, to 10 percent in 2013, which is remarkable. Even 

while private coverage rates declined from 55 to 27.1 percent. Simply put, at a time when employer-sponsored coverage was declining, we still managed to bolster coverage for children. 

Private coverage rate—rates also declined precipitously for nearpoor adults, from 52.6 percent to 35.8 percent. So clearly, CHIP 

wasn’t the reason why private rates declined, but it and Medicaid 

were the reason why children’s coverage improved, despite an overall decline in private coverage. 

Similarly, all of you—each of you has highlighted significant 

issues that could arise if the CHIP program is not funded for additional years. Children could become uninsured, eroding the 

60 

progress we have made since the beginning of the program, and 

cost to taxpayers would go up, since keeping kids in CHIP costs the 

Federal Government so much less than moving them to an exchange marketplace coverage. 

So my first question, just to get on the record, and I don’t care 

who answers this, if CHIP funding is not extended, what would 

happen to the overall rate of uninsured children? Anyone want to 

put that out? 

Ms. SCHWARTZ. I don’t think we have calculated an overall rate 

of uninsured children, but the estimate that we have relied on to 

date is that about 2 million children would lose coverage. We are 

now doing additional analyses to get a better sense and more clarity around that number. 

Mrs. CAPPS. Thank you. And I think that gives us the big picture 

of how important this program is. 

And for those CHIP children who would become insured through 

the exchanges, how would this affect their level of appropriate agespecific benefits and the affordability of coverage? Again, sort of a 

generalized question for anyone. Thank you, Ms. Yocom. 

Ms. YOCOM. Sure. Affordability certainly would change, and costs 

would likely be higher for families who move from CHIP to the exchange. In terms of benefits, we identified a few benefits that were 

generally better under CHIP than under Medicaid—— 

Mrs. CAPPS. Yes. 

Ms. YOCOM [continuing]. Sorry, under the exchanges, and those 

were vision and dental—— 

Mrs. CAPPS. Yes. 

Ms. YOCOM [continuing]. And some on rehabilitative services, but 

that was a bit more mixed. There were also CHIP plans that did 

not have rehabilitative services as well. 

Mrs. CAPPS. I see. So, Dr. Schwartz, specifically for you, in terms 

of logistics, if CHIP funding is not extended, what are the implications for state legislatures? 

Ms. SCHWARTZ. State legislatures will begin meeting soon. Those 

that meet for less than the full year, in January, are very concerned about this issue, and need to have some kind of contingency 

plan if the federal funding runs out. The National Conference of 

State Legislatures have said that this is problematic for all state 

legislatures, whether they have a full-time legislature or one that 

meets every 2 years, or one that meets annually. 

Mrs. CAPPS. Is there an estimate on when states would run out 

of CHIP money, and when families would have to be notified that 

they will no longer have coverage? 

Ms. SCHWARTZ. With regard to when the funding would run out, 

it is different in different states, as I mentioned in my testimony. 

But every state will run out by the end of 2016. 

On the question of notice requirements, there are notice requirements under current law. This is a somewhat unique situation, and 

so that would be an area where, certainly, we would like to get 

some clarity from CMS about what states would be required to do. 

Mrs. CAPPS. I know I am over my time, but for our part, I don’t 

believe we as a committee would allow that to happen, and that is 

why H.R. 5364, the CHIP Extension Improvement Act, is a good 

bill to sign on to. Happy to have done that. 

61 

Thank you very much again for being here. 

Mr. PALLONE [presiding]. Gentlelady’s time has expired. 

The chair now recognizes the gentleman from Virginia, Mr. Griffith, 5 minutes for questions please. 

Mr. GRIFFITH. Thank you, Mr. Chairman. 

And if anyone could respond to this, or all of you, in response to 

Chairman Upton and Ranking Member Waxman’s letter and questions, Virginia Governor, Terry McAuliffe, raised the issue of allowing coverage of medically necessary institution for mental disease, 

and the placements for CHIP-eligible children, which is currently 

available to children on Medicaid. Given the work that this committee has done on mental health under Chairman Murphy, or in 

the Oversight and Investigations Committee that Chairman Murphy chairs during this past year, and hearing that testimony, and, 

of course, being aware of the tragedies that took place, while it may 

not have been helped, at Virginia Tech and elsewhere in Virginia, 

I think this is something that ought to be considered. 

Do any of you all have thoughts on whether or not CHIP should 

include providing this type of mental health coverage? 

Ms. SCHWARTZ. I would just say that MACPAC began this fall a 

focused inquiry on behavioral health services in Medicaid and 

CHIP. We are still learning and identifying the problems and the 

concerns. Coverage in institutions of mental diseases in Medicaid 

has certainly been a concern, and that will be an area where you 

will see more from us in the future. 

Mr. GRIFFITH. Because one of the areas—just to underline this 

for you all—one of the areas that we have identified, and Chairman 

Murphy’s hard work on this issue and those of us on that committee, is that so many young people, particularly young males between the ages of 14 and it goes over to like 28, which would not 

apply to CHIP, but particularly these 14-year-olds I am concerned 

about and up to the 18 age, they are not getting treatment. They 

know there is something wrong, the families know there is something wrong, but they are not even going in to get treatment for 

over a year before they begin, and that creates a lot of—or starts 

the process, and in a lot of cases it ends up in very tragic situations 

without getting that treatment. 

All right, let us move on to other subjects while I still have some 

time. 

The American Action Forum, run by former CBO Director, Doug 

Holtz-Eakin, estimated in September that 1.6 million children currently in CHIP would fall into the family glitch. 

Ms. Baumrucker, can you explain for those who might be watching this hearing later or now, what is the family glitch and why 

is that of concern particularly related to CHIP? 

Ms. BAUMRUCKER. So under the regulation from CMS, or IRS, affordability or whether or not you have access to insurance coverage 

that is affordable, so whether you would have access to subsidized 

coverage through the exchanges, is defined against an individual, 

not a full family. And so the idea behind families that would fall 

into that family coverage glitch is that they may have access to employer-sponsored insurance, but that that insurance coverage would 

be under the 9.5 percent of their annual family income, and so 

62 

would be considered affordable, but may or may not be based on 

their income against poverty level. 

Mr. GRIFFITH. OK, so if I can clarify, and I understand it but I 

want to make sure the public understands it as well. What you are 

talking about is, is that in order to be affordable, it has to be 9.5 

percent of the individual’s income or the family income, but that 

is determined against the individual employee’s wages, and if they 

happen to have, particularly in a single-parent household and they 

have three or four children at home, when you add the cost of covering the children, it is no longer 9.5 percent or less of their income, it goes up above that, but for purposes—the Affordable Care 

Act did not take that into calculation, or at least the regulations 

based upon the Affordable Care Act, did not take that into consideration, and so we have families out there who, notwithstanding 

the fact it is deemed affordable by the Internal Revenue Service, 

it may not be affordable. Is that a correct restatement of what you 

said? 

Ms. BAUMRUCKER. I would agree with that. 

Mr. GRIFFITH. I appreciate that. Thank you so much. 

That being said, and I am going to have to truncate this a lot 

because I talk too much, which often happens. Dental insurance, 

there is a real concern there with the dental insurance aspects related to the Affordable Care Act, and of course, we know there was 

the double counting issue. Related to CHIP, what can you all tell 

me about how many children are currently getting dental services 

under CHIP, and how this may be impacted as well by the Affordable Care Act? And I saw Ms. Yocom nodding. I would be happy 

for you to give me an answer. And I have 20 seconds left. 

Ms. YOCOM. OK. No pressure. We did do some work on dental, 

and it is sort of a good-news, bad-news. The good news is dental 

coverage and use of dental services in Medicaid and CHIP has actually shown some improvement over the last few years. The bad 

news is it is still not on par with private insurance. OK? 

Mr. GRIFFITH. I appreciate that. 

And my time being up, I yield back. Thank you, Mr. Chairman. 

Mr. PITTS. Chair thanks the gentleman. And—— 

Mrs. CAPPS. Mr. Chairman. 

Ms. PITTS [continuing]. Mrs. Capps, you are recognized for a UC 

request. 

Mrs. CAPPS. Yes. I apologize for not doing this on my time but 

I wanted to ask unanimous consent to insert into the record the 

statement from the National Association of Pediatric Nurse Practitioners in support of the Child Health and Disability Prevention 

Program, and swift passage of funding for this program. And I 

yield back. 

Mr. PITTS. And without objection, so ordered. 

[The information appears at the conclusion of the hearing.] 

Mr. PITTS. Ms. Castor, you are recognized for 5 minutes for questions. 

Ms. CASTOR. Thank you, Mr. Chairman. And I want to thank you 

and Ranking Member Pallone for your leadership on SCHIP. And 

I would like to thank our witnesses who are here today for lending 

your expertise on the financing of SCHIP, and the impact of various policy decisions at the federal and state level. 

63 

I come from the state of Florida, and we take great pride that 

an early precursor to SCHIP was developed in the state of Florida, 

in the late ’80s and early ’90s. I think it was very smart, they created insurance that is specific to children’s needs, and they started 

with public school enrollment to create a large group that gave the 

state negotiation power to go out and get the best rates to cover 

children, and they used the data that they gathered there to demonstrate to other states that it is very cost-effective, that—compared to adults a lot of time, children are pretty inexpensive when 

it comes to taking care of their healthcare needs. So that allowed 

other states and the Federal Government to say, hey, this is a 

smart policy to invest in children, negotiate lower rates for 

healthcare coverage. 

So now, years later, it is widely embraced, and in response to the 

committee’s July correspondence to states asking for their input, 

the overwhelming number of states have said, yes, Congress, 

please extend funding for State Children’s Health Insurance Program. So we should do this as soon as possible, the Congress 

should act. First, it would give families the peace of mind that they 

need that their children are going to be able to get to the doctor’s 

office, get the vaccination thingy, get the dental care that they 

need, but as Dr. Schwartz has pointed out, early in the new year, 

states are going to be putting their budgets together and they really need this information from the Congress and on the federal side 

of what the funding is going to be. So I would urge us to try to get 

this done in the lame duck to give that certainty, or at least in the 

early part of the new year tackle it and move it through as quickly 

as we can. 

I would like to ask a couple of questions about who remains uninsured, and what the barriers are, because even with all of this 

progress over the past years, we still have—I don’t know, Dr. 

Schwartz, did you say 10 percent uninsured? It varies state to 

state. In my State of Florida, we are still not doing all that we 

should. 

What are the barriers today to getting children enrolled? Does it 

involve the waiting lists, and then I will have a couple of other 

questions to ask you. 

Ms. SCHWARTZ. Well, I think there are many different factors, 

and I am not going to be able to quantify how much each contributes to that amount. There are many children who are eligible for 

Medicaid and CHIP who are not enrolled because of lack of awareness or lack of understanding. Certainly, waiting periods for CHIP 

coverage do mean that those children remain uninsured in the period in which they have applied, but are not eligible for coverage. 

There are children as well whose immigration status does not permit them to be covered under Medicaid and CHIP. 

Ms. CASTOR. So on the waiting list issue, the MACPAC has advised the Congress that one way to ensure that children get covered is to eliminate those waiting lists. And hasn’t this been the 

trend in states over the past couple of years? I think I read that 

at least 20 states have eliminated that waiting list. Unlike the 

State of Florida, unfortunately, I think they still say, OK, families 

and kids, you have to wait 2 months, which really doesn’t seem to 

make a lot of sense when you acknowledge it is important for chilVerDate Nov 24 2008 15:07 Jun 04, 2015 Jkt 037690 PO 00000 Frm 00067 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-184 CHRIS
64 

dren to be healthy and ready to learn in the classroom. What is 

going on with the waiting list? 

Ms. SCHWARTZ. Yes, you are correct that states have been eliminating their waiting lists. The 37 states that began 2013 with 

CHIP waiting periods, by 2014, 16 had eliminated those. The Affordable Care Act also required states to limit waiting periods to 

90 days. And as well, there are a number of exemptions to the 

waiting period. Some states have told u s that it takes a lot of work 

to go through and tick off all those exemptions, and it is just better 

to have no waiting period at all, and that was one of MACPAC’s 

recommendations. 

Ms. CASTOR. Great. Great. And then what role do you think the 

transition to Medicaid Managed Care has played in erecting barriers to children being covered, and the fact that a number of states 

have not expanded Medicaid? Does that also play a role in creating 

a barrier to enrollment? 

Ms. SCHWARTZ. The expansion of Medicaid that states have the 

option of taking, of course, applies to adults. It does not apply to 

children. Children are covered in every state. I am not aware of 

any research that shows that Managed Care is a barrier to insurance, and in fact, there are many who would argue that Managed 

Care provides a system of care for a child with someone—and an 

organization responsible for that care. So I am not able to provide 

an answer on that. 

Ms. CASTOR. MACPAC has not examined that? 

Ms. SCHWARTZ. Not from that perspective. 

Ms. CASTOR. OK, thank you very much. 

Mr. PITTS. Chair thanks the gentlelady. 

And recognizes the gentleman from Florida, Mr. Bilirakis, 5 minutes for questions. 

Mr. BILIRAKIS. Thank you, Mr. Chairman. Appreciate it. Thanks 

for holding this hearing. 

Ms. Mitchell, CHIP is a capped allotment and not mandatory 

spending like some other federal programs. Can you talk about how 

CHIP has provided more robust federal budget discipline compared 

to Medicaid and Medicare? Does the flexible benefit design help to 

control costs and increase outcomes in the program? 

Ms. MITCHELL. Medicaid and CHIP are very different from a financial standpoint. They are both mandatory funding. CHIP has 

the capped allotments that states receive every year. Medicaid is 

open-ended. So for every dollar a state spends on their Medicaid 

program, they receive a portion of that back, according to their 

FMAP rate. And the FMAP rate for Medicaid is less than the E– 

FMAP rate that states receive for CHIP. In fact, it is—the E– 

FMAP rate is—for the states are 30 percent reduction in what 

states receive under the FMAP rate. So that is the difference between the financing on those two. 

Mr. BILIRAKIS. OK, thank you. Another question, under the 

President’s healthcare law, about half the states have expanded 

Medicaid to cover childless adults, and again, this is for Ms. Mitchell. Yet, CHIP is facing a funding cliff. I am concerned that we 

could be subsidizing the care of able-bodied adults, and may have 

lost our focus on the poor and underserved children. That is what 

it was intended to do, in my opinion. 

65 

When CHIP was initially passed, who was the target population, 

I want to hear, and under the broad eligibility provisions today, 

how has that eligibility income level shifted? This is for Ms. Mitchell. 

Ms. MITCHELL. When CHIP was passed in 1997, the target population was targeted low-income children that did not have access to 

insurance. So that was the point of CHIP. Did you have anything 

to add to that? 

Ms. BAUMRUCKER. Sure. As part of the CHIP program, or CHIP 

Reauthorization Act, as well, there was attention that the Congress 

put on finding and enrolling uninsured children in the Medicaid 

program eligibility limits, and to try and bolster that lower income—those lower-income families over the CHIP children at higher income thresholds. So there is that target group. Without CHIP 

funding, there is a potential, as we have noted on the panel, that 

some could become uninsured going forward. 

Mr. BILIRAKIS. Thank you. Thank you. 

Ms. Yocom, OMB has labeled CHIP as a high-error program, an 

estimated 7 percent improper payment rate. I know that GAO has 

looked at program integrity within Medicaid, but have they looked 

at the CHIP program? 

Ms. YOCOM. We have not. 

Mr. BILIRAKIS. OK. Can you talk about some of GAO’s Medicaid 

integrity recommendations, since some states run CHIP inside the 

Medicaid program? 

Ms. YOCOM. Sure. Many of GAO’s recommendations on program 

integrity and Medicaid relate to making sure that CMS and the 

states work together and collaborate on both information systems 

and oversight. We most recently have recommended that there be 

a more intensive look at Medicaid managed care, in our most recent study, we really found that CMS and the states, and even the 

Inspector Generals, were not spending time looking at whether 

payments made by managed care organizations and payments 

made to managed care organizations were done in a fiscally responsible way. So that is an area of significant need right now. 

Mr. BILIRAKIS. Thank you very much. 

Dr. Schwartz, has MACPAC looked at the feedback the governors 

provided about the current design of the CHIP program, and if so, 

can you talk about how this will factor into what recommendations 

MACPAC may be making? 

Ms. SCHWARTZ. Yes. At the staff level we have seen some but not 

all of the letters that I believe have been sent to the committee. 

I understand the committee is releasing them and—in which case 

we will brief our commissioners at our meeting next week, and that 

will provide the strongest voice for the state perspective in 

MACPAC’s deliberations, because our analyses and our recommendations focus on children, families, the Federal Government 

and the states. So we are very grateful to the committee for asking 

for those letters from the states because I think we will find them 

very useful. 

Mr. BILIRAKIS. Very good. Thank you. 

I yield back, Mr. Chairman. 

Mr. PITTS. Chair thanks the gentleman. 

66 

Now recognize the gentleman from Pennsylvania, Dr. Murphy, 5 

minutes for questions. 

Mr. MURPHY. Thank you, Mr. Chairman. 

Ms. Yocom, one of the concerns of Medicaid is that the program 

doesn’t always provide good access to care, in part due to the low 

reimbursement rates. And I believe in your report from GAO, the 

GAO report also says that the ways to improve access to providers 

is to change their reluctance to be part by changing what is basically low and delayed reimbursement and provider enrollment requirements. That is from the GAO report. So I understand that 

GAO did some work comparing Medicaid and CHIP kids’ access to 

care in that 2011 report. Can you talk a little bit about the findings 

of that report, what may be the difference in care for children in 

CHIP versus Medicaid? 

Ms. YOCOM. OK. Yes. The report that you are referring to did not 

get to the point of what was the quality of care received. We did 

get to the point of looking at how much utilization occurred in each 

type of program, and whether or not there were perceptions of access with each of these programs. We did find that perceptions of 

access at the primary care level were equally strong across Medicaid, private insurance, and CHIP. And in terms of utilization of 

primary care services, we didn’t find a statistically significant difference in utilization across the private insurance, across Medicaid, 

and across CHIP. 

Where we did find a significant difference was with specialty 

care, both in terms of physicians reporting difficulty referring individuals for specialty care, and then—in Medicaid and in CHIP, and 

then also with utilization rates of specialty care. Also perceptions 

of access for specialty services were also lower for Medicaid and for 

CHIP. 

Mr. MURPHY. Well, let me—they are lower for Medicaid and 

CHIP. One of the questions I have about access, and you heard Mr. 

Griffith make reference to the hearings we have had on mental 

health and mental illness, one of the barriers we find that the Federal Government has created under the Medicaid program is what 

is called the same-day billing rule. You can’t see two doctors in the 

same day. 

Ms. YOCOM. Yes. 

Mr. MURPHY. Now, to me, that is an absurd barrier we have. 

Knowing that early symptoms of severe mental illness begin to appear, in 50 percent of cases, by age 14. Some may even appear earlier. And to have access to a pediatrician or a family physician 

might, say, Ms. Jones or Ms. Smith, your child is showing some 

problems here, we need to get them to see a psychiatrist/psychologist right away. 

Ms. YOCOM. Yes. 

Mr. MURPHY. Medicaid says, nope, you have to come back. When 

we know that they can be referred in the same day, compliance is 

very high when they have to come back, it is a problem. And there 

is an average of 112 weeks between the first symptoms and first 

professional involvement. 

Does CHIP have the same barrier that Medicaid has, do you 

know—— 

Ms. YOCOM. I—— 

67 

Mr. MURPHY [continuing]. Or would anybody in the panel know 

about that? 

Ms. YOCOM. I don’t believe so, but I don’t know of any now. 

Mr. MURPHY. But that—because that is one of the critical barriers in terms of—— 

Ms. YOCOM. Right. 

Mr. MURPHY [continuing]. Access and quality if Medicaid—and I 

think one of the reasons there is stigma with mental illness is you 

can’t get help. 

Ms. YOCOM. Right. And I—— 

Mr. MURPHY. And so—— 

Ms. YOCOM. I do know there are states and options that can 

allow you to bill two providers on the same day, and—by identifying the providers. So hopefully, not too similar to MACPAC, but 

we also are doing a look right now at behavioral health services 

and some of the issues related to obtaining access. 

Mr. MURPHY. I hope some of you can give me an answer to that 

question—— 

Ms. YOCOM. Yes. 

Mr. MURPHY [continuing]. Because the committee—if funding for 

the CHIP program is not extended, I am concerned that many kids 

are going to lose their coverage and be enrolled in the exchange 

under the Affordable Care Act, but what we have also heard from 

a number of employers and a number of families is what appears 

to be a lower cost is a very high deductible. And so basically now 

they are given catastrophic insurance where they are paying thousands of dollars as a deductible. 

Now, in your testimony, you indicated that approximately 1.9 

million children would not qualify for a subsidy in the marketplace 

due to the employer-based coverage being available. Without CHIP, 

isn’t it likely that many of these children are just going to go uninsured then, Ms. Yocom? 

Ms. YOCOM. I believe it is likely, yes, absent—— 

Mr. MURPHY. And anybody else have a comment on that, would 

some of these kids just then go without care? 

Ms. SCHWARTZ. That is MACPAC’s concern as well, and what we 

are trying to get better data on—at the moment are what the offers 

are for dependent coverage for the parents that have employersponsored coverage, and what the costs for that coverage look like. 

Mr. MURPHY. Well, I just want to say, and Mr. Pallone may be 

surprised to hear me say this, but there are some government programs that are doing pretty well, and I think in this one, CHIP has 

got some value, I know in Pennsylvania has a strong demonstrated 

value, and rather than cut something that is working, we should 

find a way of learning lessons of value from this and not making 

families go without insurance. So I thank you very much. 

I yield back, Mr. Chairman. 

Mr. PITTS. Chair thanks the gentleman. 

Now recognize the chair emeritus of the full committee, Mr. Barton, 5 minutes for questions. 

Mr. BARTON. Thank you, Mr. Chairman. I just got here. I am 

going to pass on questions. I guess I will ask one question just for 

the record. 

68 

In your opinion, if the next Congress significantly changes the 

Affordable Care Act, which I think we will, would you recommend 

that we maintain SCHIP as a separate program, or would it— 

would you recommend we fold it in with whatever we end up doing 

with the Affordable Care Act? And I will let anybody who wants 

to answer that. 

Ms. SCHWARTZ. It was MACPAC’s—the Commission’s intention 

in making its recommendation for a 2-year extension of CHIP funding to use that 2 years to find a way to make sure that there is 

integration of children into other forms of coverage, to ensure that 

that coverage works well for children, and that there is not loss of 

coverage for people. 

Depending upon what the Congress does, the strategies for that 

integration might have to change, but that clearly is part of the intention behind the rationale behind the Commission’s recommendation. 

Mr. BARTON. Anybody else? OK, well, Mr. Chairman, I am going 

to—Ms. Yocom, did you want to say something? 

Ms. YOCOM. I was going to point to one study that GAO did that 

looked at the association between parents and caretaker coverage 

with children’s coverage, and we did find that there is a stronger— 

there is a strong association with parents who have coverage— 

they’re far—their children are far more likely to be covered if they 

have coverage that is similar to their parents. When the coverage 

gets mixed, the likelihood of a child obtaining insurance is slightly 

lower. We did not find anything about utilization or access, however. 

Mr. BARTON. OK. Mr. Chairman, I am going to yield back. I was 

one of the authors of the last reauthorization of the SCHIP program, so I am a supporter of it. I haven’t studied the issue well 

enough to know where we are going to go in the next Congress, but 

I will definitely work with you and other members of this subcommittee to do that. 

Mr. PITTS. The chair thanks the gentleman. 

Now recognize the gentlelady from North Carolina, Ms. Ellmers, 

5 minutes for questions. 

Mrs. ELLMERS. Thank you, Mr. Chairman, and thank you to our 

panel for being here today. 

One of the issues that I have been working on that is very important to me is access to healthcare services for children with lifethreatening illnesses. Congressman Moran and I have sponsored 

bipartisan legislation, the Children’s Program of All-Inclusive Coordinated Care, or ChiPACC—Act of 2014, which is H.R. 4605. A 

little promotion there. 

Basically, this is based on a collaborative model of care developed 

by Children’s Hospice International. This model provides comprehensive and coordinated care for Medicaid-eligible children who 

suffer from life-threatening diseases. Currently, the ChiPACC program is operating in five waiver states. This legislation would 

allow states the flexibility to implement ChiPACC as a Medicaid 

state plan option. The program provides improved access to critical 

care services for this population of children, while resulting in cost 

savings through their state Medicaid program. 

69 

I would just ask that you look into that piece of legislation because, again, we will be putting it forward into the new Congress. 

My questions, starting off with Dr. Schwartz. When our committee asked our state about CHIP funding, the state emphasized 

that the CHIP funding expires qualified plans. A federal facilitated 

marketplace could experience an increase in cost sharing by thousands of dollars per year. Of course, that depends on the number 

of children, health status and state of the children at the time. 

Therefore, would a compromise be made to continue the CHIP program with a greater financial contribution higher than the current 

5 percent threshold, but lower than the cost sharing that would be 

incurred on the federally facilitated marketplace? In other words, 

how do we—from the beneficiary’s perspective, increase their portion? 

Ms. SCHWARTZ. MACPAC is currently undertaking analyses to 

look at the impact of cost sharing, particularly in the exchanges on 

families—— 

Mrs. ELLMERS. Yes. Yes. 

Ms. SCHWARTZ [continuing]. And that impact varies quite a bit 

based on the healthcare use of the children. So the children you are 

most concerned about stand to have the highest cost sharing—— 

Mrs. ELLMERS. Yes. 

Ms. SCHWARTZ [continuing]. Because of the service level cost 

sharing. 

Mrs. ELLMERS. Yes. 

Ms. SCHWARTZ. But that could be—what you suggest could be 

certainly one approach that we could look at. 

Mrs. ELLMERS. OK. Also, as a follow-up to that, under current 

law for 2016, or will be implemented in 2016, the CHIP enhanced 

federal medical assistance percentage is scheduled to increase by 

23 percent. Now, according to MACPAC or CBO estimates, will the 

additional billions of dollars that will be generated from that in 

federal funding result in more children receiving health coverage? 

Will there be an increase in the number? And I apologize if any of 

these questions have already been posed to you because I did come 

in late. 

Ms. SCHWARTZ. OK, the increased funding results from when you 

have a higher matching rate, the states use the money more rapidly, and so to get through the same period of time with the same 

enrollment—— 

Mrs. ELLMERS. Yes 

Ms. SCHWARTZ [continuing]. It requires more dollars. It is not 

based on a change in enrollment. 

Mrs. ELLMERS. So it won’t increase the number of children receiving services? 

Ms. SCHWARTZ. That is affected by the eligibility level, not by the 

match rate. 

Mrs. ELLMERS. OK. Ms. Yocom, I have a question for you. How 

much money could Congress save in federal taxpayer dollars if the 

23 percent increase were set aside or scraped? 

Ms. YOCOM. I am sorry, I don’t think I can answer that. One of 

the things that happens with increasing that matching rate is the 

funds will disappear more quickly—— 

Mrs. ELLMERS. Yes. 

70 

Ms. YOCOM [continuing]. And that could lead to states struggling 

to continue to cover their—— 

Mrs. ELLMERS. Yes. But that hasn’t necessarily been something 

that the GAO has already looked into? 

Ms. YOCOM. It is not something we have looked at now. 

Mrs. ELLMERS. OK. OK, well, thank you very much. 

And, Mr. Chairman, I yield back the remainder of my time. 

Thank you. 

Mr. PITTS. Chair thanks the gentlelady. 

Now recognize the gentleman from New Jersey, Mr. Lance, 5 

minutes for questions. 

Mr. LANCE. Thank you very much, and good morning to you all. 

I have been involved in another hearing. This is an incredibly important topic. 

A number of members on the subcommittee, including me, are 

from states that extend CHIP coverage to pregnant women. As I 

understand it, it is estimated that about 370,000 pregnant women 

are covered each year in the 18 states that offer the coverage. Is 

there data to suggest that pregnant mothers have better health 

outcomes with CHIP as opposed to Medicaid? Whoever on the 

panel would be interested in responding to that. 

Ms. YOCOM. I am not aware of data that shows that, so no. 

Mr. LANCE. Anybody else? Regarding another aspect of this issue, 

Ms. Tavenner said to a senate committee that existing CHIP regulations require assessment for all other insurance affordability programs, including Medicaid and the premium tax credit when CHIP 

eligibility for a child is ending. Can any of the distinguished members of the panel elaborate on what this assessment entails, or 

qualified health plans, for example, currently available that would 

be considered adequate for children leaving CHIP? 

Ms. YOCOM. Yes. One of our more recent studies did take a look 

in five states. We looked at benchmark plans which were the basis 

for coverage under qualified health plans, and we have some ongoing work as well right now. But essentially, we did find that costs 

would be higher, in some cases, particularly with vision and hearing services, that the coverage under the benchmark plans was not 

as robust as what is offered under CHIP. 

Mr. LANCE. Thank you. Others on the panel? Let me urge the 

distinguished members of the panel to consider the situation that 

was suggested by Chairman Emeritus Barton. The new Congress 

may very well try to amend the Affordable Care Act in significant 

ways. The President could sign that or veto that, but regardless of 

our action or his action, it is my legal judgment that the Supreme 

Court may rule as not consistent with statutory law, current subsidies to the Federal Exchange. I think it is an extremely important case, and I think the Court could quite easily conclude that 

black letter law does not permit subsidies to the Federal Exchange. 

If that were to occur then the Affordable Care Act might collapse 

under its own weight, and if that were to occur, then Congress will 

certainly have to address the CHIP issue separately and distinctly 

from the Affordable Care Act. And so I would encourage the panel 

to consider what actions we should take moving forward if that 

were to occur, and it is my legal judgment that it might very well 

occur. 

71 

Do any of the members of the panel have initial thoughts on 

what I am suggesting? Dr. Schwartz? 

Ms. SCHWARTZ. Only to say that to the extent that premium subsides are not available, that obviously—— 

Mr. LANCE. Yes. 

Ms. SCHWARTZ [continuing]. Changes the options for children significantly. 

Mr. LANCE. Yes. 

Ms. SCHWARTZ. And so it is always a question of CHIP relative 

to what, and so I think your point is well taken and it is one that 

the Commission will be considering. 

Mr. LANCE. Thank you. There are pros and cons in having CHIP 

folded into the ACA, I understand that, but CHIP predates the 

ACA, there are many of us who support CHIP who certainly are 

vigorously in opposition to the ACA, and I hope that we cannot confuse the two or conflate the two. And the Supreme Court has granted certiorari in this case, well, there will be oral arguments in 

March, I suppose, and a decision by June, but I would encourage 

all on the panel to consider what might occur if what I suggest 

eventuates. 

Thank you very much, Mr. Chairman. 

Mr. PITTS. The chair thanks the gentleman. 

That concludes this round of questioning. We will go to one follow-up per side. 

I will recognize myself 5 minutes for that purpose. 

And let me continue on Mrs. Ellmers’ question. She asked it of 

GAO. Let me ask it of MACPAC. What many of the advocates and 

public health groups are saying is that CHIP is a success today 

under today’s match rate. Can you confirm that if Congress were 

to scrap the 23 percent increased FMAP in current law, and only 

extend CHIP for 2 years, the CBO’s current projections are that extending CHIP for that time could save federal money, reduce the 

deficit. Dr. Schwartz? 

Ms. SCHWARTZ. The savings do come from comparison to the alternative. That is, as long as states are putting in more money, the 

Federal Government is putting in less, and so yes, that would potentially result in savings. 

Mr. PITTS. All right, let me continue with you. States have told 

us that under the MAGI, the Modified Adjusted Gross Income, calculations, there are lottery winners currently enrolled in Medicaid. 

In fact, in 2014, one state reported to us that roughly one in four 

of their lottery winners were enrolled in Medicaid, or had a family 

member in Medicaid. And this includes at least one individual who 

won more than $25 million, but still was receiving Medicaid services. Since CHIP uses MAGI calculations as well, is it possible that 

CHIP is providing coverage for lottery winners? 

Ms. SCHWARTZ. I am not familiar with the specific cases that you 

cite, but it would be my understanding that, to the extent that lottery winnings are considered taxable income, that they would be 

taken into account in a MAGI calculation. 

Mr. PITTS. Ms. Yocom, would you respond to that question? 

Ms. YOCOM. Yes. I can’t do much more than echo what Dr. 

Schwartz just said. Yes. 

Mr. PITTS. Anyone else? All right, that concludes my questioning. 

72 

I will recognize the ranking member 5 minutes for a follow-up. 

Mr. PALLONE. Dr. Schwartz, let me ask you, I want to follow up 

on the earlier question relating to the transfer of children from 

CHIP to Medicaid. As you know, the Early Periodic Screening, Detection and Treatment benefit is available for all children in Medicaid, but not necessarily in CHIP. Do you have any estimate of the 

number of children of those 500,000 children who saw an improvement in coverage as a result, and do you have any estimate of the 

number of children who now benefit from reduced cost sharing as 

a result of the—that transfer? 

Ms. SCHWARTZ. That is a great question, but I don’t think we 

have the data to answer that question. 

Mr. PALLONE. So you think you could get back to us, or you don’t 

have sufficient data? 

Ms. SCHWARTZ. We would have to look at the states which were 

transitioning kids, and we would have to look at the difference between the benefit package in their CHIP program versus the Medicaid program. I would be hesitant to say that we could then say 

anything about their specific healthcare use, and so we will look 

into what we can provide the committee. 

Mr. PALLONE. All right, I appreciate that. I just wanted to mention, it is not a question, but I just wanted to mention that in formal responses to the Energy and Commerce Committee and the 

Senate Finance Committee, governors from 39 states expressed 

support for CHIP, and urged Congress to extend the program, and 

noted the role the program plays in providing affordable and comprehensive coverage to children. On July 29, the chairman and 

ranking members of both Energy and Commerce and Senate Finance sent letters to all 50 governors asking for their input to inform Congress’ action on CHIP, and, yes, taken together, the letters that we received from the governors indicated support for extension of CHIP, and outlined a number of suggestions for program 

improvements that could accompany any funding reauthorization. 

And we do have that information on the committee’s Web site. So 

I did want to mention that, Mr. Chairman. 

And I yield back. 

Mr. PITTS. Chair thanks the gentleman. 

That concludes the questioning from the members. I am sure we 

will have more we will submit to you in writing. We ask that you 

please respond promptly. I remind Members that they have—I am 

sorry? Did you have a follow-up? I am sorry. 

Mr. GRIFFITH. I had some clean-up questions, Mr. Chairman, but 

it is up to you. I can submit them in writing or—— 

Mr. PITTS. Well—— 

Mr. GRIFFITH [continuing]. However you want to do it. 

Mr. PITTS. Yes. Do you object or—go ahead. Mr. Pallone says it 

is all right. 

Mr. GRIFFITH. CBO’s projections, Ms. Mitchell, reflect what is effectively a grandfathered scoring provision, which assumes a $5.7 

billion expenditure on CHIP in the baseline each year, however, 

since that is merely a budgetary assumption, is it fair to say that 

in reality, any additional funding is new funding which, if not offset, we probably ought to offset it, but if not offset, would increase 

the deficit? 

73 

Ms. MITCHELL. I am not sure that I can answer that question. 

Mr. GRIFFITH. OK. 

Ms. MITCHELL. That gets into sort of CBO’s score—— 

Mr. GRIFFITH. But in basics, if you don’t—— 

Ms. MITCHELL [continuing]. Scoring—— 

Mr. GRIFFITH. If you don’t do an offset of something that has 

been built into the base, if you don’t do the offset then you probably 

have an increase, wouldn’t that be correct? 

Ms. MITCHELL. I think the $5.7 billion assumption in CBO sort 

of complicates this a little bit, so I would defer to them—— 

Mr. GRIFFITH. OK. 

Ms. MITCHELL [continuing]. For sure. 

Mr. GRIFFITH. I appreciate that. 

CHIP was designed for lower-income children, yet today, some 

middle and even upper-middle-income families have members with 

CHIP coverage. For example, I note that one state, some enrollees 

are covered—the children are covered up to 350 percent of the federal poverty level. For a family of four, 350 percent is an income 

of $83,475, yet the median income in that particular state is 

$71,637. 

So the question becomes, in some states, is CHIP subsidizing the 

upper-middle-class families in those particular states? Yes, ma’am? 

Ms. BAUMRUCKER. I am happy to take that question. So again, 

as a part of the CHIP Reauthorization Act of 2009, there were provisions that were put into place, into current law, to target the 

CHIP coverage to the Medicaid-eligible children first, and then also 

to limit coverage above 300 percent of federal poverty level by reducing the CHIP enhanced match rate to the Medicaid federal 

matching rate for new states expanding above that 300 percent 

level. So there was an attempt to ensure that the CHIP dollars 

were being spent on the lower income—or under 300 percent of 

FPL. 

Mr. GRIFFITH. And I guess where it gets confusing is the different states have different levels because that number is twice as 

much as the median income in my district, and so that makes it— 

that 350 percent of federal poverty level is about twice what the 

median household income is in my district. 

MACPAC, if we find that we are subsidizing the middle-class, do 

you all think that is appropriate? 

Ms. SCHWARTZ. The Commission hasn’t taken up the question of 

eligibility levels within Medicaid—I mean within CHIP. I just 

would remind the committee that almost 90 percent of the kids 

now covered by CHIP are below 200 percent of poverty. 

Mr. GRIFFITH. And obviously, that is a good thing and we appreciate that. 

Mr. Chairman, I appreciate your patience, and I yield back. 

Mr. PITTS. Chair thanks the gentleman. 

We have been joined by a gentleman from Texas, Mr. Green. You 

are recognized 5 minutes for questions. 

Mr. GREEN. Thank you, Mr. Chairman, and ranking member 

for—and to our witnesses for testifying today. 

CHIP has been a critical source of health insurance coverage for 

millions of low- and moderate-income families who cannot access 

affordable care for their children in the private insurance market. 

74 

Recent evaluations of CHIP reiterated what we have long known; 

even when employer-sponsored insurance is offered for children, 

the affordability of such plans is a major barrier to many families. 

And I have a district that is an example of that. 

There are a number of ways Congress can help to include and 

strengthen and improve CHIP and children’s coverage. For example, my colleague and I, Joe Barton, have legislation that would 

provide for a 12-month continuous coverage under Medicaid and 

SCHIP, because that would have that continuity. Most health insurance policies are a yearlong. Hopefully, that would be something 

we consider in the reauthorization. 

People rarely lose their Medicaid and CHIP coverage because 

they become long-term ineligible for the program. Instead, people 

are often disenrolled due to bureaucratic problems or short term 

changes in income that have no impact on their long-term eligibility for Medicaid and SCHIP. This disrupts that continuity of 

care, and creates a bureaucratic chaos for hospitals and providers, 

and ends up costing the healthcare system much more. 

While that legislation focuses on people who are removed—or lost 

their CHIP, the issue of churn exists between Medicaid, SCHIP 

and the marketplaces. Due to the small changes in income, an individual could switch from being eligible for Medicaid, to being eligible for subsidized coverage in the exchanges. Switching back and 

forth between insurance coverage can be changing benefits, changing in participating providers, pharmacies, changing out-of-pocket, 

not to mention administrative paperwork for the state or the insurance companies, and the doctor’s office. 

One program to help reduce that churn is the Transitional Medical Assistance, or TMA. Dr. Schwartz, I understand that MACPAC 

has recommended that Congress make TMA permanent, in part because of the churn factor. Can you elaborate? 

Ms. SCHWARTZ. Yes. MACPAC has recommended making TMA 

permanent, rather than having to consider it on an annual basis. 

The Commission has also recommended and strongly supports policies of 12-month continuous eligibility for both children and adults 

as a way of minimizing disruptions in care, and also minimizing 

the bureaucratic aspects of churn. 

Mr. GREEN. OK. Some might say that we have exchanges, we do 

not need the TMA. I don’t believe that because, simply, in Texas 

we don’t have Medicaid expansion, which is, I think, a majority of 

the states. Why would we still need TMA even with the Affordable 

Care Act? 

Ms. SCHWARTZ. MACPAC has looked at that issue, and its recommendation was to make TMA optional in those states that have 

taken up the expansion for childless adults because that serves to 

cover that population without having a TMA program. Nonetheless, 

it stays relevant for those below the exchange eligibility level. 

Mr. GREEN. You know, the goal of the SCHIP program is to get 

the most vulnerable population, and you are right, if a state did expand it, they don’t need Medicaid expansion plus SCHIP, and they 

are not going to have two programs, but they need to be in one or 

the other. That is important. 

Ms. Yocom, in terms of physician access, I understand that you 

and other researchers have reported that CHIP and Medicaid enVerDate Nov 24 2008 15:07 Jun 04, 2015 Jkt 037690 PO 00000 Frm 00078 Fmt 6633 Sfmt 6633 F:\MY DOCS\HEARINGS 113\113-184 CHRIS
75 

rollees experience similar challenges as individuals covered by private insurance. Would you agree that issues with access experienced by families with children in CHIP reflect broader systemwide challenges, rather than problems with CHIP itself? 

Ms. YOCOM. There are certainly issues with access, particularly 

with mental health, with dental care, and with specialty services. 

I would agree that those issues that arise in CHIP appear to be 

similar for the private sector, but more intense for CHIP and for 

Medicaid. 

Mr. GREEN. Ms. Schwartz, I only have a few seconds, but can you 

discuss the issues that still need to be resolved with regard to network adequacy and access to pediatric services and qualified health 

plans? 

Ms. SCHWARTZ. Yes. This is an area which we are looking into. 

There is an assumption that CHIP networks work best for children 

because it is predominantly a child program. We convened a roundtable earlier this week, bringing together plans, providers, state officials, federal officials, and beneficiaries, to kind of explore what 

some of the solutions might be, and you will be hearing more about 

that from us in the future. 

Mr. GREEN. All right. 

Mr. Chairman, thank you, and thank you again for having the 

hearing. 

Mr. PITTS. Certainly. Thank you. 

That concludes the questions from the Members. As I said, Members will have follow-up questions. We ask that you please respond 

promptly. And I will remind Members that they have 10 business 

days to submit questions for the record, and Members should submit their questions by the close of business on Wednesday, December 17. 

Thank you very much for being here, for your patience, for all 

the good information. Look forward to working with you. 

Without objection, the subcommittee is adjourned. 

[Whereupon, at 12:13 p.m., the subcommittee was adjourned.] 

[Material submitted for inclusion in the record follows:] 

PREPARED STATEMENT OF HON. FRED UPTON

CHIP is an important program that provides health coverage to children who 

might otherwise go uninsured and it has historically enjoyed bipartisan support. I 

am especially proud that because of this program, Michigan has one of the lowest 

rates of uninsured children in the nation. But funding for CHIP is set to end next 

year, and while I support extending that funding, it is important that we address 

several questions about the future of the program to ensure we continue to provide 

care for the nation’s most vulnerable kids. 

Much has changed in health care since CHIP was created back in 1997. While 

the rate of children without insurance has declined, health care costs have continued to grow. 

In its repeated reauthorizations, the CHIP program has usually been extended in 

a bipartisan manner. Most recently, however, the Children’s Health Insurance Program Reauthorization Act (CHIPRA) in 2009 and the Patient Protection and Affordable Care Act in 2010 made significant changes to the program. The president’s 

health care law reauthorized CHIP through FY2019, but only provided funding for 

the program through September 30, 2015. This has effectively created a funding cliff 

raising questions about the future of CHIP. 

First, we must consider cost. It’s important to understand the cost of extending 

CHIP coverage and ensure that any additional federal spending is fully offset. CHIP 

is a good model of a program that provides coverage and flexibility while also providing budget discipline. We need to ensure that this remains the case. 

76 

Second, crowd-out must be considered. CHIP was designed to provide coverage for 

lower-income Americans. There is a legitimate policy concern that, if not properly 

focused, CHIP coverage may unduly crowd-out private health coverage. It is imperative that CHIP remain a program targeted to those who need it most. 

A third area of concern is coverage. My colleagues and I who support extending 

CHIP funding do so because we believe in high quality, affordable coverage. As Congress considers the interactions between CHIP, employer-provided coverage, Medicaid, and exchange coverage, we need to carefully examine the benefits of different 

types of coverage. We need to examine what we know about cost, quality, outcomes, 

access to care, and other critical metrics. 

Finally, we must consider the construction of the program. One of the great benefits of the way the CHIP program is designed is that it empowers states. We have 

heard recently from governors all across the country about the successes of the 

CHIP program. Michigan currently covers nearly 45,000 children and has provided 

services to over 300,000 since the program’s inception. The Director of Michigan’s 

Department of Community Health recently wrote, ‘‘We believe the flexibilities afforded by CHIP have contributed to our success.’’ While states need to be accountable for the federal dollars they spend, we should maintain the CHIP program in 

a manner that provides states like Michigan with appropriate tools to oversee and 

operate their programs, enabling them to build upon past success. This means policies that enhance program integrity, state flexibility, and other factors should be a 

priority. 

I want to thank the Congressional Research Service, Government Accountability 

Office, and Medicaid and CHIP Payment and Access Commission (MACPAC) for 

their testimony. I look forward to working across the aisle to adopt common-sense 

policies that keep the CHIP program strong for the future and provide needed coverage to millions of kids. 

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