Children's Health Insurance: Information on Coverage of Services, Costs to Consumers, and Access to Care in CHIP and Other Sources of Insurance
Published: 2013-11-21T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: More than 8 million children were enrolled in CHIP--the federal and state children's health program that finances health care for certain low-income children--in 2012. PPACA appropriated funding for CHIP through federal fiscal year 2015. Beginning in October 2015, any state with insufficient CHIP funding must establish procedures to ensure that children who are not covered by CHIP are screened for Medicaid eligibility, and if ineligible, are enrolled into a QHP that has been certified by the Secretary of Health and Human Services (HHS) as comparable to CHIP. Exchanges are marketplaces for QHP coverage effective in 2014. GAO was asked to review issues related to CHIP. This report provides a baseline comparison of coverage and costs to consumers in separate CHIP plans and benchmark plans in select states; describes how coverage and costs might change in 2014; and describes how access to care by CHIP children compares to other children nationwide.
For the coverage and cost comparison, GAO reviewed Evidences of Coverage from separate CHIP plans and benchmark plans (base and supplemental) from five states--Colorado, Illinois, Kansas, New York, and Utah--selected based on variation in location, program size, and design. GAO reviewed documents and spoke to officials from states' CHIP programs, exchanges, and benchmark plans, and from the Centers for Medicare & Medicaid Services. To describe access to care by children in CHIP compared to others with Medicaid, private insurance or without insurance, GAO analyzed nationwide data from HHS's MEPS from 2007 through 2010.
section_title: What GAO Found
paragraphs: In five selected states, GAO determined that the separate State Children's Health Insurance Program (CHIP) plans were generally comparable to the benchmark plans selected by states in 2012 as models for the benefits that will be offered through qualified health plans (QHP) in 2014. The plans were comparable in the services they covered and the services on which they imposed limits, although there was some variation. For example, in coverage of hearing and outpatient therapy services, the benchmark plan in one of the five states--Kansas--did not cover hearing aids nor hearing tests, while the CHIP plans in all states covered at least one of these services. Similarly, two states' CHIP plans and three states' benchmark plans did not cover certain outpatient therapies--known as habilitative services--to help individuals attain or maintain skills they had not learned due to a disability. States' CHIP and benchmark state plans were also similar in terms of the services on which they imposed day, visit, or dollar limits. Plans most commonly imposed limits on outpatient therapies and pediatric dental, vision, and hearing services. Officials in all five states expect that CHIP coverage, including limits on these services, will remain relatively unchanged in 2014, while QHPs offered in the exchanges will be subject to certain Patient Protection and Affordable Care Act (PPACA) requirements, such as the elimination of annual dollar limits on coverage for certain services.
Consumers' costs for these services--defined as deductibles, copayments, coinsurance, and premiums--were almost always less in the five selected states' CHIP plans when compared to their respective benchmark plans. For example, the CHIP plan in the five states typically did not include deductibles while all five states' benchmark plans did. Similarly, when cost-sharing applied, the amount was almost always less for CHIP plans, and the cost difference was particularly pronounced for physician visits, prescription drugs, and outpatient therapies. For example, an office visit to a specialist in Colorado would cost a CHIP enrollee $2 to $10 per visit, depending on their income, compared to $50 per visit for benchmark plan enrollees. GAO's review of premium data further suggests that CHIP premiums are also lower than benchmark plans' premiums. While CHIP officials in five states expect consumer costs to remain largely unchanged in 2014, the cost of QHPs to consumers is less certain. These plans were not yet available at the time of GAO's review. However, PPACA includes provisions that seek to standardize QHP costs or reduce cost-sharing amounts for certain individuals.
When asked about access to care in the national Medical Expenditure Panel Survey (MEPS), CHIP enrollees reported positive responses regarding their ability to obtain care, and the proportion of positive responses was generally comparable to those with Medicaid--the federal and state program for very low-income children and families--or with private insurance. Regarding use of services, the proportion of CHIP enrollees who reported using certain services was generally comparable to Medicaid, but differed from those with private insurance for certain services. Specifically, a higher proportion of CHIP enrollees reported using emergency room services, and a lower proportion of CHIP enrollees reported visiting dentists and orthodontists. HHS provided technical comments on a draft of this report, which GAO incorporated as appropriate.

section_title: Letter
paragraphs: The State Children’s Health Insurance Program (CHIP), a joint federal- state program that was established by law in 1997, finances health  insurance for over 8 million children whose household incomes are too  high for Medicaid eligibility, but too low to afford private insurance. States  administer CHIP under broad federal requirements, and the programs  vary, for example, in the services covered, costs to individuals and  families, and eligibility requirements. The Department of Health and  Human Services’ (HHS) Centers for Medicare & Medicaid Services  (CMS) is the federal agency responsible for overseeing CHIP, with states  managing and administering the operations of their individual CHIP  programs. States can operate CHIP as a separate program or include  CHIP-eligible children in their Medicaid program. Congress has  appropriated federal CHIP funding at various times since the creation of  the program. Most recently, the Patient Protection and Affordable Care  Act (PPACA) appropriated federal CHIP funding through federal fiscal  year 2015, thus requiring Congress to act again to extend funding in the  future. Among other provisions aimed at maintaining and increasing  access to affordable health insurance, PPACA requires the establishment  of health insurance exchanges in each state—marketplaces where  eligible individuals can compare and select among qualified health plans  (QHP) offered by participating private issuers of health coverage,  hereafter referred to as issuers, beginning in 2014. PPACA also requires  that, if a state’s CHIP funding is insufficient to cover all CHIP-eligible  children, beginning in October 2015, the state must establish procedures  to ensure that the children who are not covered by CHIP are screened for  Medicaid eligibility, and if ineligible for Medicaid, are enrolled into a QHP  in an exchange in that state if the QHP has been certified as comparable  to CHIP by the Secretary of HHS.
PPACA does not explicitly define the services included in the EHB categories, rather it  identifies 10 broad categories of essential benefits that QHPs must provide: ambulatory  patient services; emergency services; hospitalization; maternity and newborn care; mental  health and substance use disorder services, including behavioral health treatment;  prescription drugs; rehabilitative and habilitative services and devices; laboratory services;  preventive and wellness and chronic disease management; and pediatric services,  including oral and vision care. Rehabilitation is provided to help a person regain, maintain  or prevent deterioration of a skill that has been acquired but then lost or impaired due to  illness, injury, or disabling condition. While PPACA and its implementing regulations do  not define habilitative services, habilitation has been defined by several advocacy groups  as a service that is provided in order for a person to attain, maintain, or prevent  deterioration of a skill or function never learned or acquired due to a disabling condition. offer QHPs that are substantially equal to their state’s EHB-benchmark  plan (base and supplemental, if necessary). In this report, we refer to  states’ EHB-benchmark plans as “benchmark plans.”
You asked for baseline information about how health care coverage,  costs, and access to services in separate CHIP programs compare to  coverage provided to children and families through benchmark plans, and  how this may change with QHPs offering coverage through the  exchanges in 2014. In this report, we describe  1.  how coverage in separate CHIP plans compares to benchmark plans  in select states, and how coverage might change in 2014,  2.  how costs to consumers in separate CHIP plans compare to  benchmark plans in select states and how costs to consumers might  change in 2014, and  3.  how access to care by children covered by CHIP compares to other  children.
To address the first two objectives—how coverage and consumers’ costs  in separate CHIP plans compare to benchmark plans in select states and  how coverage and costs might change in 2014 when QHP coverage in  the exchanges begins—we reviewed federal statutes and regulations  governing CHIP-eligible services and the required EHBs to identify a  range of health care services for further review. Based on variations in  CMS region, CHIP program design, and size of enrollment in the separate  CHIP program, we also selected five states for further review: Colorado,   In each of these five states, we  Illinois, Kansas, New York, and Utah.contacted state officials to identify the plan within their separate CHIP  program with the largest enrollment from late 2012 through early 2013.  We also identified the base-benchmark and relevant supplemental plans  effective in each of these five states as of December 26, 2012. We then  reviewed the Evidences of Coverage from each of the plans identified to  determine whether the services we identified were covered and whether  there were any annual limits on those services in terms of days, visits, or  expenditures. Our analysis did not include other coverage limits, such as  unspecified limits based on medical necessity, expected improvement  deadlines (e.g., improvement must be expected within 2 months), and  drug day limits (e.g., prescriptions filled 30 days at a time). We also  reviewed plan Evidences of Coverage to identify cost-sharing amounts,  including deductibles, copayments, and coinsurance, for each of the   We  services and any stated out-of-pocket maximum cost amounts.contacted state officials in all five states to obtain historic and current  CHIP premiums and relied on national survey data on private individual  market premiums to approximate benchmark plan premiums. Our  coverage and cost comparison was limited to these five states. Our  results cannot be generalized to other states. Coverage and cost  information for QHPs was not available at the time of our analysis.  Therefore, to determine how coverage and costs might change in 2014,  we reviewed federal statutes and implementing regulations, interviewed  federal and state officials about their expectations regarding the coverage  and costs for CHIP and QHPs, and reviewed preliminary information  available on state QHP premiums.
To describe how access to care for CHIP children compares to other  children, we analyzed data from the Medical Expenditure Panel Survey  (MEPS), a nationally representative survey that collects data from a  sample of non-institutionalized Americans on their health insurance status  and service utilization, among other factors. Our analysis covered the  period of 2007 through 2010, the most recent complete data available at  the time we did our work. We compared responses to a series of  questions related to health care access and utilization by respondents  with children eligible for CHIP to respondents with children covered under  private insurance, Medicaid, and those who were uninsured.MEPS combines Medicaid- and CHIP-eligible respondents, we consulted  with HHS’s Agency for Healthcare Research and Quality (AHRQ) to  develop an analysis that disaggregated these responses. We analyzed  responses from respondents who were enrolled in the program for at  least 8 months. To determine the reliability of MEPS data, we reviewed  related documentation describing how these data are collected and  processed, and examined other research that has used these data to  report on access to health care services. We also discussed the data and  our analysis with AHRQ officials. We determined that the data we used in  this report were sufficiently reliable for the purposes of our engagement.  (See app. I for additional information on our MEPS analyses.)
Although  We conducted this performance audit from September 2012 to November  2013 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: Consumers may obtain health insurance from a variety of public and  private sources, which can help protect them from the costs associated  with obtaining medical care. Health insurance typically includes costs to  consumers, which may vary for a number of factors, including scope of  coverage, cost-sharing provisions, and federal or state requirements.  Recent federal laws —specifically, PPACA and the Children’s Health  Insurance Program Reauthorization Act of 2009 (CHIPRA)—further  define coverage and cost parameters for certain health insurance plans  available to consumers now and in 2014, when exchanges are required to  be operational, and include provisions to increase children’s access to  coverage.
subsections: section_title: Coverage and Cost Requirements for CHIP
paragraphs: Unlike states that opt to include coverage for eligible children under a  CHIP-funded expansion of Medicaid, and therefore, must extend  Medicaid covered services to CHIP-eligible individuals, states with  separate CHIP programs have flexibility in program design and are at  liberty to modify certain aspects of their programs, such as coverage and  cost-sharing requirements. For example, federal laws and regulations  allow states with separate CHIP programs to offer one of four types of  health benefit coverage and, regardless of the benefit coverage option  states choose, require states’ separate CHIP programs to include  coverage for routine check-ups, immunizations, and emergency  services. States typically cover a broad array of services in their  separate CHIP programs and, in some states, adopt the Medicaid  requirement to cover Early and Periodic Screening, Diagnostic and  Treatment (EPSDT) services. Effective October 1, 2009, CHIPRA  required CHIP plans to cover dental services defined as “necessary to  prevent disease and promote oral health, restore oral structures to health  and function, and treat emergency conditions.” CHIPRA also required  states to comply with mental health parity requirements—meaning they  must apply any financial requirements or limits on mental health or  substance abuse benefits under their separate CHIP plans in the same  manner as applied to medical and surgical benefits. States covering  EPSDT services under separate CHIP plans were deemed to comply with  these requirements.
With respect to costs to consumers, CHIP premiums and cost-sharing  may not exceed minimum amounts as defined by law. States may vary  CHIP premiums and cost-sharing based on income and family size, as  long as cost-sharing for higher-income children is not lower than for  lower-income children. Federal laws and regulations also impose  additional limits on premiums and cost-sharing for children in families with  incomes at or below 150 percent of the federal poverty level (FPL). For  example, the range of copayments was $1.15 to $5.70 per service in  2009 for children in families with incomes between 100 and 150 percent  of FPL. In all cases, no cost-sharing can be required for preventive  services—defined as well-baby and well-child care, including age- appropriate immunizations and pregnancy-related services. In addition,  states may not impose premiums and cost-sharing, in the aggregate, that  exceed 5 percent of a family’s total income for the length of the child’s  eligibility period in CHIP.
Children’s access to affordable health insurance and health care can be  affected by many different factors, and CHIPRA and PPACA also contain  provisions to facilitate eligible children’s access to CHIP.  For example,  CHIPRA appropriated funding for state and other organization outreach  grants to help increase enrollment of CHIP-eligible children for federal  fiscal years 2009 through 2013 and performance bonuses for simplifying  CHIP enrollment and retention by applying certain program reforms.  PPACA provisions that aim to facilitate eligible children’s access to CHIP  include appropriating additional funding for CHIPRA outreach grants  through federal fiscal year 2015. PPACA also requires states to maintain  CHIP eligibility standards for children through September 2019. In  accordance with this requirement, states are prohibited from increasing  existing premiums or imposing new premiums except in limited  circumstances.
section_title: Coverage and Cost Requirements for QHPs
paragraphs: PPACA requires the establishment of exchanges in all states by   January 1, 2014, to allow consumers to compare health insurance options  available in that state and enroll in coverage. The exchanges will offer  QHPs that are certified and are offered by participating issuers of  coverage. PPACA further requires QHPs offered through an exchange  to comply with applicable private insurance market reforms, including  relevant premium rating requirements, the elimination of lifetime and  annual dollar limits on essential health benefits, prohibition of cost-sharing  for preventive services, mental health parity requirements, and the  offering of comprehensive coverage. With respect to comprehensive  coverage, PPACA requires QHPs offered through an exchange to cover  10 categories of EHBs, limit cost-sharing associated with this coverage,  and provide one of four levels of coverage determined by the plan’s  actuarial value.
By the end of December 2012, states had either selected a base- benchmark plan or been assigned the default base-benchmark plan by  HHS. In over 80 percent of states, the largest plan by enrollment in the  largest product by enrollment in the state’s small group market was  established as the base-benchmark plan. In addition, in states where the  base-benchmark plan did not include coverage for pediatric dental or  vision services, the state (or HHS, in the case of a federally established  default benchmark plan) was required to supplement coverage with the  addition of the entire category of pediatric dental or vision benefits from  either (i) the Federal Employees Dental and Vision Insurance Program  (FEDVIP) dental or vision plan with the largest national enrollment of  federal employees, or (ii) the benefits available under the plan in the  state’s separate CHIP program with the highest enrollment, if a separate  CHIP program existed. PPACA also allows exchanges in each state the  option of providing pediatric dental services using a stand-alone dental  plan (SADP). In exchanges with at least one participating SADP, QHPs  will have the option of excluding pediatric dental benefits from their  covered services.
section_title: In Five States, Coverage in CHIP and Benchmark Plans Was Generally Comparable; These States Expect Minimal Changes to CHIP and QHPs to Reflect PPACA Requirements in 2014
paragraphs: In our five selected states, CHIP and benchmark plans generally covered  the services we reviewed and were similar in terms of the services on  which they imposed day, visit, or dollar limits. CHIP officials in our  selected states expected minimal or no changes to CHIP coverage in  2014, and that the QHPs offered through the exchanges would reflect  states’ benchmark plans and PPACA requirements.
subsections: section_title: Coverage in CHIP and Benchmark Plans Was Generally Comparable, with Some Variation in Hearing and Outpatient Therapy Services in Five States
paragraphs: We determined that the CHIP and benchmark plans in our five selected  states were comparable in that they included some level of coverage for  nearly all the services we reviewed. Exceptions were hearing-related  services, such as tests or hearing aids, where both were not covered by  the benchmark plan in Kansas, and outpatient therapies for habilitation,  which were not covered by CHIP plans in Kansas and Utah or by the   (See app. II for a  benchmark plans in Colorado, Kansas, or New York.detailed list of selected services covered by each state.) The benchmark  plan coverage for pediatric dental and vision services was often the same  as that in the CHIP plan because the base-benchmark plan, which was  typically based on the largest plan by enrollment from each state’s small  group market, did not cover these services, and the states often selected  CHIP as the supplementary coverage model. In particular, the base- benchmark plan in four states did not cover pediatric dental services and  in three states did not cover pediatric vision services. Because pediatric  dental and vision services are EHBs, these states were required to select  supplemental benchmark plans to bridge the coverage gaps, and often  selected CHIP as the supplement. National data from HHS suggests  that nearly all states supplemented the base-benchmark plan with  pediatric dental and vision plans. According to HHS, 50 and 46 states had  to identify supplemental pediatric dental and vision plans, respectively,  and more than half of the states selected the FEDVIP plan as the  supplement for each service.
The CHIP and benchmark plans we reviewed were also generally similar  in terms of the services on which they imposed day, visit, or dollar limits.  For example, the plans we reviewed were similar in that they typically did  not impose any such limits on ambulatory patient services, emergency  care, preventive care, or prescription drugs, but commonly did impose  limits on outpatient therapies and pediatric dental, vision, and hearing  services. One notable difference between CHIP and benchmark plans we reviewed was the frequency by which they limited home- and  community-based health care services. While the benchmark plans in  four states imposed day or visit limits on these services, only one state’s  CHIP plan did so. (See fig. 1.)
For services where both plan types imposed limits, our review of plan  Evidences of Coverage found that, except for dental and vision services,  the comparability between plan types in terms of annual limits was less  clear, but at times was more generous for CHIP. For example, Utah’s  benchmark plan limited home- and community-based health care services  to 30 visits per year while the state’s CHIP plan did not impose any limits  on this service. Comparability between annual service limits in states’  CHIP and benchmark plans was less clear for outpatient therapy  services. For example, the Colorado CHIP plan limited outpatient therapy  to 40 visits per diagnosis compared to 20 visits per therapy type in the  benchmark plan. Similarly, the New York CHIP plan allowed a maximum  of six weeks for physical therapy while the benchmark plan allowed up to  60 visits per condition per lifetime. Limits on dental and vision services  were largely comparable, due to the selection of CHIP as the  supplemental benchmark for those services in most of the selected  states. Table 1 provides examples of annual limits for select services  between CHIP and benchmark plans, and app. III lists annual limits for all  services we reviewed.
CHIP officials in all five states said that they expect the services we  reviewed that were covered by their respective CHIP plans and any  relevant limits on these services to remain largely unchanged in 2014.  With respect to QHP coverage, state officials in all five states expect 2014  coverage to reflect PPACA and its implementing requirements, including  being comparable to their respective benchmark plans. For example,  QHPs must offer EHB services at levels that are substantially equal to  their respective state’s benchmark plans. With state approval, QHPs may  substitute services that are actuarially equivalent and from the same EHB  category as the service being replaced. The actuarial equivalence  requirement also applies to dental benefits provided by SADPs, which are  expected to be available in all five selected states, according to state  officials.Illinois, and Kansas—commented on the advantages and disadvantages  of SADPs. While their availability could benefit consumers in terms of a  broader set of options for dental services, their availability could also  create confusion among consumers. For example, because QHPs are not  required to include pediatric dental coverage in their plans if an SADP is  available in their state’s exchange, some officials expressed concern that  a consumer who needs the pediatric dental benefit may mistakenly  purchase a plan in the exchange without such coverage or, conversely,  could have duplicate coverage if they purchased an SADP in addition to a  QHP that may include pediatric dental coverage.
Exchange officials in three of the selected states—Colorado,  State officials said that they also expect QHPs to reflect additional  PPACA requirements. For example, PPACA requires QHPs to include  coverage for the categories of rehabilitative and habilitative services and  devices. For benchmark plans that do not cover habilitative services,  HHS’s implementing regulations provide three options to comply with the  requirement. States can opt to (1) require QHPs to cover habilitative  services in parity with rehabilitative services; (2) select specific services  that would qualify as habilitative or, if the state neglects to choose either  of these choices, (3) allow the QHP issuer to determine which services  qualify as habilitative. Each of the three selected states that did not cover  outpatient therapies for habilitation—Colorado, Kansas, and New York— has opted to require QHPs to cover these services in parity with  rehabilitative services. According to HHS, nationwide data show that in  addition to these three states, 19 other states had benchmark plans that  did not cover habilitation, and the majority chose to allow the issuers to  determine which services would qualify as habilitative.
PPACA also eliminates the use of annual and lifetime dollar limits on any  EHB services. The elimination of lifetime dollar limits was effective in  September 2010 and the elimination of annual limits takes effect in  January 2014. Among our five selected states, four states had  benchmark plans that imposed an annual dollar limit on at least one of the  service categories we reviewed; with limited exception, none of these  dollar limits were imposed on EHB services. For example, Kansas’  benchmark plan limited hospice services to $5000 per insured person per  lifetime. In general, state officials indicated that for these services, they  expected that QHP issuers would eliminate the dollar limits.
PPACA also extends the mental health parity requirements, which require  that any lifetime limits placed on mental health or substance abuse  services be the same as those placed on physical health care services.The benchmark plans in two selected states—New York and Utah— included such limits on mental health and substance abuse services. For  example, both states’ benchmark plans limited inpatient mental health  service to 30 days a year, where similar limits did not exist for inpatient  physical health services. Officials in both states said that they expected  that QHP issuers would eliminate such limits.
section_title: In Five States, Costs to Consumers Were Almost Always Less in CHIP than in Benchmark Plans; CHIP Costs Are Expected to Remain the Same and QHP Costs to Reflect PPACA Limits in 2014
paragraphs: In our five selected states, consumers’ costs were almost always less in  CHIP plans when compared to the states’ benchmark plans. While CHIP  officials said that they expect CHIP costs to consumers to remain largely  unchanged in 2014, the cost of QHPs to consumers is less certain, since  benchmarks are not models for QHP cost-sharing. Instead, PPACA  includes provisions that will standardize QHP costs and reduce cost- sharing for certain individuals.
subsections: section_title: Costs to Consumers in Five States Were Almost Always Less in CHIP Plans than in Benchmark Plans
paragraphs: Based on the review of plan Evidences of Coverage in our five selected  states, costs to consumers were almost always less in the CHIP plans  than in the states’ benchmark plans. For example, the CHIP plans in four  of the five selected states did not include any deductibles, which means  that enrollees in those states did not need to pay a specified amount  before the plan began paying for services. Utah is the only selected state  that imposed a deductible on a portion of its CHIP population, which  applied to about 60 percent of its CHIP enrollees—those with higher  incomes. In contrast, benchmark plans in all five selected states had  deductibles, which ranged from $500 in Illinois and Kansas to $3,000 in  Utah for an individual, and $1,000 in Kansas to $6,000 in Utah for a  family.
Our review of plan Evidences of Coverage and information from state and  plan officials also found that, for services we reviewed where the plan  imposed copayments or coinsurance, the amount was almost always less  in a state’s CHIP plan that in its benchmark plan. For example, the  CHIP plan in two of our five states—Kansas and New York—did not  impose copayments or coinsurance on any of the services we reviewed.  In two of the remaining three states, the CHIP plan imposed copayments  or coinsurance on less than half of the services we reviewed, and the  amounts were usually minimal and based on a sliding income scale. For  example, for each brand-name prescription drug, the Illinois CHIP plan  imposed a $4 copayment on enrollees with incomes between 134 and  150 percent of the FPL, which was increased to $7 for enrollees with  incomes between 201 and 300 percent of the FPL. Utah’s CHIP plan  differed from the other states’ plans in that it imposed either a copayment  or coinsurance on all services we reviewed—except preventive and  routine dental services—which varied by income level.
In contrast, the benchmark plans in all five states imposed copayments or  coinsurance on most services we reviewed. Further, the amounts did not  vary by income level and were consistently higher than the CHIP plan in  their respective state. These cost differences were particularly  pronounced for certain services we reviewed, such as primary care and  specialty physician office visits, prescription drugs, and outpatient  therapies. For example, depending on income, the copayment for primary  care and specialist physician visits ranged from $2 to $10 per visit for  Colorado CHIP enrollees, but was $30 and $50 per visit, respectively, for  benchmark plan enrollees in the state. In states where the benchmark  plan charged coinsurance and the CHIP plan required a copayment, a  direct comparison of cost differences could not be made, although data  suggest CHIP costs would generally be lower in most cases. For  example, while higher-income CHIP enrollees in Illinois paid $100 per  admission for an inpatient hospital stay, state benchmark enrollees were  responsible for 10 percent coinsurance after the deductible was met, an  amount that was likely to be higher than the $100 given that 10 percent of  the average price for an inpatient facility stay in 2011 was over $1,500.
Table 2 provides examples of differences in copayments and coinsurance  for select services between CHIP and benchmark plans.
Our review of CHIP premiums and other sources of premium data  suggest that CHIP premiums were also likely lower than benchmark  plans. For example, 2013 CHIP annual premiums for an individual varied  by income level and ranged from $0 for enrollees under 150, 160, and  100 percent of the FPL in Illinois, New York, and Utah, respectively, to  $720 for higher-income enrollees between 351 and 400 percent of the  FPL in New York, with most enrollees across the five selected states  paying less than $200 a year. Benchmark plan premium data were not  readily available at the time of our study; however, national survey data  from America’s Health Insurance Plans suggest that individuals under   18 years of age enrolled in the private individual market paid annual  premiums that averaged $1,350 in 2009.
In addition, both CHIP and benchmark plans in all five states limited the  total potential costs to consumers by imposing out-of-pocket maximum  costs. For example, all five states applied the limit a family could pay in  CHIP plans as established under federal law—including deductibles,  copayments, coinsurance, and premiums—at 5 percent of a family’s  income during the child’s (or children’s) eligibility for CHIP.maximum applies to all services, irrespective of the number of children in  the family enrolled. For benchmark plans, out-of-pocket maximum costs  were established by each plan. For the five benchmark plans we   This  reviewed, the annual out-of-pocket maximum costs ranged from $1,000 to  $6,050 for an individual and $3,000 to $12,100 for a family. Additionally,  the benchmark plans differed from the CHIP plans in that their maximum  costs did not include premiums and may not have included deductibles or  costs associated with all services. For example, three of the five  benchmark plans had deductibles in addition to the out-of-pocket  maximum costs. Additionally, copayments for office visits did not apply to  the out-of-pocket maximum costs in four of the five states’ benchmark  plans.
Some evidence suggests that most families in the five selected states and  nationally—whether enrolled in CHIP or a benchmark plan—were unlikely  to incur costs that reached the out-of-pocket maximum costs. Our  interviews with CHIP officials in selected states and information in the  states’ CHIP annual reports indicated that it was rare for families to  exceed their 5 percent maximum costs. Utah was the only state that said  they had more than a few families exceeding the maximum costs, with  about 140 families reporting doing so in a given year, according to state  officials. Similarly, existing national data on average out-of-pocket costs  for individuals with employer-sponsored insurance suggested that  individuals enrolled in the benchmark plans could also generally incur  costs that are lower than the maximum costs established by their plan.  For example, the Health Care Cost Institute, an organization that provides  information for researchers on health care spending and utilization trends,  reported that the average out-of-pocket amount spent per consumer was  $735 in 2011 for health care services through employer-sponsored  insurance, which was lower than the lowest maximum costs established  by our selected benchmark plans.
section_title: Five States Expect CHIP Costs to Consumers to Remain the Same; QHP Costs to Consumers Will Be Subject to PPACA Provisions that Limit Consumers’ Costs in 2014
paragraphs: According to state CHIP officials in all five states, CHIP costs to  consumers, including premiums, copayments, coinsurance, and  deductibles, are expected to remain largely unchanged in 2014. All five  states said they currently have no plans to raise premiums or change  cost-sharing amounts in 2014.
In contrast, QHP costs to consumers in 2014 may be different than those  in the benchmark plans as benchmarks are not models for QHP cost- sharing. Instead, PPACA included provisions applicable to QHPs that will  limit premium variation, standardize plan values, and limit out-of-pocket  costs. For example,
PPACA will limit premium variation in the individual market by  prohibiting health plans from adjusting QHP premiums based on  factors such as health status and gender. Instead, plans will only be  allowed to adjust premiums for family size, geographic area, age, and  tobacco use.
PPACA standardizes plan values through QHP coverage level  requirements. Specifically, QHPs must offer coverage that meets one  of four metal tier levels, which correspond to actuarial value  percentages that range from 60 to 90 percent: bronze (an actuarial  value of 60 percent), silver (an actuarial value of 70 percent), gold (an  actuarial value of 80 percent), or platinum (an actuarial value of   90 percent). Actuarial value indicates the proportion of allowable  charges that a health plan will pay, on average—the higher the  actuarial value, the lower the cost-sharing expected to be paid by  consumers. Deductibles, co-pays, and coinsurance amounts can vary  within these plans, as long as the overall cost-sharing structure meets  the required actuarial value levels.
PPACA establishes out-of-pocket maximum costs on cost-sharing that  apply to all QHPs and vary by income, a change from the non- income-based out-of-pocket maximum costs found in our selected  benchmark plans. These maximums for individual plans do not  include premiums or costs associated with non-EHB services, but do  include deductibles. See table 3.
SADPs have out-of-pocket maximum costs that are in addition to the  QHP maximums described above and therefore may increase  potential maximum costs for families who purchase them. For 2014,  the out-of-pocket maximum costs for SADPs offered in federally  facilitated exchanges and state partnership exchanges are $700 for a  plan with one child or $1,400 for a plan with two or more children.  For example, a family at 225 percent of the FPL that enrolls their two  children in an SADP in addition to their QHP would be subject to an  out-of-pocket maximum cost of $11,800.
Additionally, PPACA includes provisions aimed at reducing cost-sharing  amounts for certain low-income consumers and eligible Indians who  purchase QHPs through an exchange in the individual market. For  example, PPACA and federal regulations provide cost-sharing subsidies  to individuals with incomes between 100 and 250 percent of the FPL to  offset the costs they incur through copayments, coinsurance, and  deductibles in a silver-level QHP. The cost-sharing subsidies will not be  provided directly to consumers, instead, QHP issuers are required to offer  three variations of each silver plan they market through an exchange in  the individual market. These plan variations are to reflect the cost-sharing  subsidies through lower out-of-pocket maximum costs, and, if necessary,  through lower deductibles, copayments, or coinsurance. Once the  adjustments are made, the actuarial value of the silver plan available to  eligible consumers will effectively increase from 70 percent to 73, 87, or  94 percent, depending on their income levels. However, cost-sharing  subsidies are not available for pediatric dental costs incurred by a  consumer enrolled in a QHP and an SADP.
PPACA also provides a premium tax credit to eligible individuals with  incomes that are at least 100 percent and no more than 400 percent of  the FPL when purchasing a plan with a premium no more than the  second-lowest cost silver plan in their state.  Depending on their income,  this provision limits the amount families must contribute to QHP premiums  to 2 to 9.5 percent of their annual income; in 2014 these premium  contributions will range from $471 to $8,949 for a family of four.cost-sharing subsidies, which generally do not apply to costs incurred for  services by a consumer enrolled in an SADP, the maximum contribution  amount on premiums includes premiums for both QHPs and SADPs, if   Unlike  relevant.federal poverty level.
section_title: National Survey Data Suggest that CHIP Access to Care is Comparable to Medicaid and Lower than Private Insurance for Some Services
paragraphs: When asked a series of questions about access to care, MEPS  respondents with children covered by CHIP reported positive responses  to nearly all questions regarding their ability to obtain care and at levels  that were generally comparable to those with other types of insurance.  MEPS includes questions about respondents’ ability to obtain care, and  responses to these questions can provide insight to an individual’s access  to services. In examining questions related to having a usual source of  care, getting appointments and care when needed, and accessing care,  tests, or treatment or seeing specialists when needed, most respondents  with children enrolled in CHIP had positive responses to questions for   Specifically, five of the six MEPS  calendar years 2007 through 2010.questions we analyzed related to respondents’ ability to obtain care. At  least 88 percent of CHIP enrollees responding to these questions  reported they had a usual source of care and usually or always got the  care they needed. When compared to respondents with other sources of  insurance, the proportion of CHIP enrollees’ with positive responses to  these questions were, for most questions, comparable to respondents  with Medicaid or with private insurance—that is, within 5 percentage  points. For example, about 89, 91, and 93 percent of CHIP, Medicaid, and  privately insured respondents, respectively, reported that they had a  usual source of care. The proportions of CHIP enrollees and those who  were uninsured reporting positive responses were also within   5 percentage points on four of the six questions, but the differences were  larger for the remaining two questions. Specifically, about 56 percent of  those who were uninsured reported having a usual source of care  compared to about 89 percent of CHIP enrollees, and about 75 percent of  those who were uninsured reported that it was usually or always easy to  see a specialist compared to about 81 percent of CHIP enrollees. The  area of greatest dissatisfaction appeared to be related to ease in seeing a  specialist. Approximately 18 percent of CHIP enrollees reported that it  was sometimes or never easy to see a specialist. (See table 5.)
Additional MEPS questions related to respondents’ use of certain medical  and dental visits also provide insight on respondents’ access to services  and suggest that, for most services, access to care for individuals  covered by CHIP is comparable to that of those with Medicaid and lower  than that of the privately insured, particularly for dental care. MEPS  questions ask about respondents’ health care visits, including office- based health provider, emergency room, and dental visits, in the year  prior to the survey. Respondents with children in CHIP reported using  services at rates generally comparable to those with Medicaid and  lower—except for emergency room visits, which were higher—than those  with private health insurance, particularly for oral health care. A higher  proportion of CHIP respondents reported using health care services  compared to those who were uninsured. For example, about 51 percent  of those with private insurance reported visiting a dentist in the past   12 months compared to about 42 percent of CHIP respondents.  Additionally, 69 percent of CHIP respondents reported having an office- based provider visit compared to about 50 percent of respondents who  were uninsured. (See table 6.)
Because factors other than insurance coverage may affect these  observed differences in responses about obtaining care or utilization of  health care services, we ran a logistic regression to determine whether  differences between CHIP respondents and those with other sources of  insurance coverage were significant after controlling for other factors,  such as age, race, and income levels. (See app. I for more detailed  information on our model and results.) After controlling for these factors,  we found that differences between CHIP and Medicaid responses were  not statistically significant for any of the 12 questions we reviewed, and  that the differences between CHIP and privately insured respondents  were statistically significant for 4 questions, which related to respondents’  reported use of emergency rooms, dentist visits, orthodontist visits, and  their reported ease in getting needed care, tests, or treatment. CHIP- covered individuals were more likely to report emergency room visits and  visits to a general dentist, and less likely to report orthodontist visits and  ease in getting needed care than the privately insured. More pronounced  differences in reported access existed between CHIP enrollees and those  who were uninsured. When comparing CHIP to the uninsured, differences  in responses were statistically significant for 8 of the 12 questions we  reviewed.
section_title: Concluding Observations
paragraphs: Congress, HHS, and the states have important decisions to make  regarding the future of CHIP. Congress will face decisions concerning  CHIP funding as current funding has been appropriated only through  federal fiscal year 2015. The Secretary of HHS will face decisions around  parameters by which QHPs offered by exchanges can be considered to  be comparable to CHIP plans. Beginning in October 2015, if CHIP  funding is insufficient, states will need to have procedures in place to  enroll CHIP-eligible children in Medicaid, if eligible, and, if not, in QHPs as  long as the Secretary of HHS has certified the QHPs are comparable to  CHIP in covered services and cost-sharing protections.
Although state officials in the five states we reviewed expect the CHIP  landscape to remain relatively stable over the next year, uncertainty  remains regarding issuer decisions and the implementation of other  PPACA provisions. This uncertainty complicates making a definitive  determination of what CHIP enrollees would face if they were to obtain  QHP coverage rather than be enrolled in CHIP. To some extent,  coverage and costs in QHPs will be determined by individual states,  issuers, and families’ choices. For example, individual issuers of QHPs in  many states will define the habilitative services they cover and the limits  on services they cover, including ones that are required under PPACA but  that they may not have previously covered. In many states, families  seeking coverage through exchanges will be allowed to choose whether  to obtain pediatric dental coverage by enrolling in a stand-alone dental  plan, which will affect upfront and other costs they face. Yet, some—or  many—families may choose not to purchase dental coverage that all  CHIP plans must cover. PPACA provisions, which seek to standardize  QHP costs and reduce cost-sharing for certain individuals, could narrow  the cost gap we identified, but will vary by consumers’ income level and  plan selection. Assessing the comparability of CHIP and QHP plans will  require ongoing monitoring of a complex array of factors.
section_title: Agency Comments
paragraphs: We provided a draft of this report for comment to HHS. HHS officials  provided technical comments, which we incorporated as appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from its  date. At that time, we will send copies to the Secretary of Health and  Human Services and other interested parties. In addition, the report will  be available at no charge on the GAO website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  Katherine Iritani at (202)512-7114 or iritanik@gao.gov. Contact points for  our Offices of Congressional Relations and Public Affairs may be found  on the last page of this report. GAO staff who made key contributions to  this report are listed in appendix IV.
section_title: Appendix I: Scope and Methodology of the Medical Expenditure Panel Survey (MEPS) Analysis
paragraphs: To describe how access to care for CHIP children compares to other  children, we analyzed data from the Medical Expenditure Panel Survey  (MEPS), a nationally representative survey that collects data from a  sample of non-institutionalized Americans on their health insurance status  and service utilization, among other factors. MEPS is administered by the  Department of Health and Human Services’ (HHS) Agency for Healthcare  Research and Quality (AHRQ) and collects information from respondents  on many topics, including demographic characteristics, insurance status,  health conditions, and their use of specific health services. We analyzed  results from the MEPS household component, which collects data from a  sample of families and individuals in selected communities across the  United States and is drawn from a nationally representative subsample of  households that participated in the prior year’s National Health Interview  Survey. The MEPS household component features five rounds of  interviews, which occur over two full calendar years. MEPS collects  information for each person in the household, and information is generally  provided by an adult member of the household.
We did not include questions that focused on the quality of care received. identify which respondents were eligible for CHIP versus Medicaid. To  ensure we had a large enough sample size for our analysis of CHIP- eligible respondents, we included respondents who were continuously  enrolled in CHIP for at least 8 months, and we analyzed responses from  respondents enrolled in CHIP, Medicaid, or private insurance for at least  eight months or who were uninsured at least 8 months out of the year. In  addition, we pooled MEPS survey results from 2007 through 2010, the  most recent, complete MEPS data available at the time of our analysis,  and combined response choices for some of the MEPS questions. For  example, some questions had several response choices, such as  “always,” “usually,” “sometimes,” or “never.” We combined the four  response choices into two response choices (e.g., “usually or always” and  “sometimes or never”). Despite these efforts, 8 questions that we  originally selected for analysis were excluded because of an insufficient  number of responses. Nine additional questions were excluded due to our  determination that they were redundant of other questions. As a result,  our analyses focused on 12 MEPS questions: 6 questions asked about  respondents experiences obtaining care and 6 questions asked about  their utilization of specific services. (See table 7.)
Because factors other than insurance coverage—such as income, parent  education, and family composition, may affect access to care, we also ran  a multivariate logistic regression analysis of responses to these 12  questions. Based on the literature and in consultation with experts at  AHRQ and the Urban Institute, an organization that has conducted past  research on access to care using MEPS data, we identified a number of  factors in addition to insurance that could influence access to care and  constructed logistic regression models to control for the effects of these  factors on our results. The factors we included were age, race, income,  total number of parents in the household, parent education, family size,  health status, mental health status, children with special needs, total  number of workers in the household, metropolitan statistical area, sex,  whether the respondent was born in the United States, and English  versus non-English speakers. We then tested whether there was a  statistically significant difference in the effect of enrollment in CHIP versus  other types of insurance coverage on responses to questions about  access to care after controlling for these factors. For 9 of the 12  questions in our analysis, there were statistically significant differences  between CHIP and certain comparison groups after controlling for other  factors.
To determine the reliability of the MEPS data, we reviewed related  documentation, identified other studies, including our prior reports, that  used MEPS data to address similar research questions, and consulted  researchers at AHRQ and the Urban Institute about our analysis. We  determined that the MEPS data were sufficiently reliable for the purposes  of our report. However, there were several limitations to our analysis.  First, to separate CHIP and Medicaid respondents, we relied on state  CHIP and Medicaid income eligibility and income disregard rules reported  by Kaiser between 2007 through 2010, and did not independently verify  these data. In addition, the information available from Kaiser on each  state’s income disregard rules was limited and had not been uniformly  updated since 2008. Therefore, to account for potential gaps in  information, we applied the income disregard rules from the 2008 Kaiser  report to MEPS results from 2007 and 2008, and applied unverified 2010  income disregard rules from Kaiser to MEPS results from 2009 and 2010.  When discrepancies between the 2008 and 2010 Kaiser data existed, we  contacted states for clarification. In the event we could not verify the  change in income disregard rules, which was the case with two states, we  applied the 2008 income disregard rules for MEPS survey results to all   4 years of our analysis, 2007 through 2010. In addition, our analysis did  not account for earnings disregards related to child care expenses, child  support paid, or child support received; therefore, the groups we identified  as Medicaid- or CHIP-eligible may be understated. Further, our analysis  also did not account for income-ineligible respondents. Therefore, there  may be some overlap between Medicaid and CHIP respondents or under-  Finally, because our analyses reflect an  reporting of CHIP respondents.eight-month period of enrollment or uninsurance, the responses may not  precisely align with the respondents’ current health insurance status,  particularly because several MEPS questions refer to respondents’  experiences and utilization over the prior 12 months.
section_title: Appendix II: Coverage for Selected Services in CHIP and Benchmark Plans in Five States
paragraphs: Legend: = yes;  = no.
Rehabilitation is provided to help a person regain, maintain or prevent deterioration of a skill that has  been acquired but then lost or impaired due to illness, injury, or disabling condition. While PPACA  and its implementing regulations do not define habilitative services, habilitation has been defined by  several advocacy groups as a service that is provided in order for a person to attain, maintain, or  prevent deterioration of a skill or function never learned or acquired due to a disabling condition.
State selected CHIP as its supplemental vision benchmark plan.
section_title: Appendix III: Copayments, Coinsurance, and Annual Coverage Limits for Selected Services in CHIP and Benchmark Plans in Five States
paragraphs: Tables 8 through 12 provide information on copayments, coinsurance,  and annual coverage limits for selected services in the State Children’s  Health Insurance Program (CHIP) and benchmark plans in each of the  five states we reviewed: Colorado, Illinois, Kansas, New York, and Utah.  States’ CHIP and benchmark plans may also include a deductible, which  was the case for all five states’ benchmark plans and one state’s CHIP  plan. For all five states, cost-sharing for individuals and families was also  subject to an out-of-pocket maximum cost. For CHIP enrollees, the out-of- pocket maximum cost amount was applied by the plans as established by  federal statute, limited to 5 percent of a family’s income, and included all   For the benchmark plans, the out- consumer costs, including premiums.of-pocket maximum cost for benchmark plans was established by each  issuer, did not include premium costs, and was sometimes in addition to  the deductible.
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Susan T. Anthony, Assistant  Director; Carolyn Fitzgerald; Toni Harrison; Laurie Pachter; Teresa Tam;  and Hemi Tewarson made key contributions to this report.
section_title: Related GAO Products
paragraphs: Children’s Mental Health: Concerns Remain about Appropriate Services  for Children in Medicaid and Foster Care. GAO-13-15. Washington, D.C.:  December 10, 2012.
Medicaid: States Made Multiple Program Changes, and Beneficiaries  Generally Reported Access Comparable to Private Insurance.  GAO-13-55. Washington, D.C.: November 15, 2012.
Children’s Health Insurance: Opportunities Exist for Improved Access to  Affordable Insurance. GAO-12-648. Washington, D.C.: June 22, 2012.
Medicaid and CHIP: Most Physicians Serve Covered Children but Have  Difficulty Referring Them for Specialty Care. GAO-11-624. Washington,  D.C.: June 30, 2011.
Medicaid and CHIP: Given the Association between Parent and Child  Insurance Status, New Expansions May Benefit Families. GAO-11-264.  Washington, D.C.: February 4, 2011.
Oral Health: Efforts Under Way to Improve Children’s Access to Dental  Services, but Sustained Attention Needed to Address Ongoing Concerns.  GAO-11-96. Washington, D.C.: November 30, 2010.
Medicaid: State and Federal Actions Have Been Taken to Improve  Children’s Access to Dental Services, but Gaps Remain. GAO-09-723.  Washington, D.C.: September 30, 2009.