Children's Health Insurance Program: Effects on Coverage and Access, and Considerations for Extending Funding
Released: 2015-03-30T00:00:00

Letter

Background

Federal law provides states with flexibility in how they operate their CHIP programs and how states implement more recent coverage options under PPACA. For example, states may operate CHIP as a separate program, include CHIP-eligible children in their Medicaid programs, or use a combination of the two approaches. States with separate CHIP programs may modify certain aspects of their programs, such as coverage and cost-sharing requirements.regulations require states’ separate CHIP programs to include coverage However, federal laws and for routine check-ups, immunizations, inpatient and outpatient hospital services, and dental services defined as “necessary to prevent disease and promote oral health, restore oral structures to health and function, and treat emergency conditions.” In addition, CHIP premiums and cost- sharing may not exceed maximum amounts as defined by law. Similarly, PPACA provides states with flexibility in how they opt to implement certain coverage options included in the law. For example, PPACA allows states to expand eligibility for Medicaid to most non-elderly, non-pregnant adults who are not eligible for Medicare and whose income is at or below 133 percent of the FPL. As of January 2015, 29 states have implemented this expansion. PPACA required the establishment of health insurance exchanges by January 1, 2014, to allow consumers to compare individual health insurance options available in each state and enroll in coverage. In states electing not to operate their own exchange, PPACA required the federal government to establish and operate an exchange in the state, referred to as a federally facilitated exchange. States with federally facilitated exchanges may enter into a partnership with HHS to assist with the operation of certain exchange functions. As such, a state could establish the exchange (referred to as a state-based exchange), cede the responsibility entirely to HHS (referred to as a federally facilitated exchange), or enter into a partnership with HHS (referred to as a partnership exchange). As of January 2015, 17 states established state-based exchanges, 27 states were using the federally facilitated exchange, and 7 states established partnership exchanges.See fig. 1 for information on the variation in children’s uninsured rates, CHIP characteristics, and coverage approaches under PPACA by state; and see appendix I for the information in tabular form.

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) included provisions aimed at improving the information available from states on the quality of health care furnished to children in both CHIP and Medicaid. Specifically, CHIPRA required the Secretary of HHS to conduct an independent evaluation of CHIP and to submit the results to Congress. The mandated evaluation, for which the final report was issued in August 2014, documents what is known about CHIP; explores the program’s evolution since inception; and examines the role CHIP has played in covering low-income children. In addition, CHIPRA required HHS to identify quality measures, known as the Child Core Set measures, to serve as a tool for states to use to monitor and improve the quality of health care provided to children enrolled in CHIP and Medicaid. CHIPRA also required HHS to develop a standardized format for states to voluntarily report these measures. These measures assess the quality of care provided through CHIP and Medicaid, and include a range of health conditions, such as asthma, obesity, attention deficit hyperactivity disorder, and perinatal care. (See table 1.)

In 2013, as required by CHIPRA, HHS began annually publishing recommended changes to the Child Core Set measures in an effort to improve upon the measures and align them with national quality measurement activities, which can result in changes to the number of measures. With the use of state reported data on the Child Core Set, HHS conducts an annual assessment and publishes its findings in its annual quality report, as required under CHIPRA. States report CHIP service utilization and other measures through systems developed by HHS; specifically, the CHIP Annual Reporting Template System (CARTS), a web-based data submission tool, and through the Form CMS-416, an annual report submitted by states on the Medicaid Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) benefit provided for enrolled children. States that use managed care plans to deliver CHIP benefits are also required to report outcomes and performance measures from External Quality Review Organizations and performance improvement projects.

In February 2010, CMS awarded 10 grants—which funded 18 states to implement projects that include using quality measures to improve child health. CMS also provided funding to AHRQ to lead a national evaluation of these demonstrations, to be completed by September 30, 2015. electronic health records, and (5) assessing the utility of other innovative approaches to enhance quality.

Assessments of National Data Largely Show Positive Effect of CHIP on Coverage and Access, and Identify Areas for Improvement

Available assessments of national data we reviewed identify positive effects of CHIP, including a reduction in the rate of uninsured children and children’s improved access to care, and these findings are often consistent with our prior work. HHS also has ongoing efforts to enhance state reporting of the Child Core Set measures and publishes data from these quality measures to identify areas for improving the care provided in CHIP.

Mandated Evaluation Highlights Reduction in the Rate of Uninsured Children and Improved Access to Health Care

HHS’s mandated evaluation identified several positive effects of CHIP across states, particularly with regard to children who are uninsured. For example, based on an analysis of data from the Current Population Survey Annual Social and Economic Supplement (CPS-ASEC), the evaluation reported that Medicaid and CHIP contributed to the decline in the national rate of uninsured children between 1997 and 2012, with coverage rates improving for all ethnic and income groups.notably, coverage rates for Hispanic children increased dramatically, rising from 42 percent to 65 percent during this time. Changes to state CHIP programs also contributed to the decline in the national uninsured rates among children. For example, many states expanded CHIP coverage by raising upper income eligibility limits and covering newly eligible groups, such as immigrant children who have resided legally in the United States for less than 5 years, which was newly permitted under Most federal law. In addition, state outreach and enrollment activities also reduced the number of children eligible for—but not enrolled in—Medicaid or CHIP by about 1.2 million from 2008 to 2012.

To determine whether factors other than insurance coverage may affect differences in responses about obtaining care or utilization of health care services, the mandated evaluation controlled for age, sex, race/ethnicity and language groups, more than three children in the household, highest education of any parent, parents’ employment status, parent citizenship, and local area or county.

CHIP enrollees were an estimated 38 percentage points more likely to have a usual source of dental care, and were an estimated 39 percentage points more likely to have had a dental check-up in the past year;

CHIP enrollees were an estimated 25 percentage points more likely to have an annual well-child checkup visit, and were more likely to receive a range of health services, including mental health visits, specialty care, and prescription drugs;

CHIP enrollees were more likely to receive most preventive care measures, including flu vaccinations, vision screenings, and height and weight measurements; and parents of CHIP enrollees were less likely to report having trouble paying their child’s medical bills, and were substantially more confident in their ability to get needed health care for their child.

Based on our assessment of HHS’s Medical Expenditure Panel Survey from 2007 through 2010, we also found that children enrolled in CHIP have better access to care and service use than children who are uninsured. In particular, when compared with uninsured children, we found that CHIP enrollees fared better, and the differences we identified were statistically significant in most cases. For example, a higher proportion of CHIP respondents reported having a usual source of care; ease in getting a person the care, tests, or treatment that the parent or a doctor believed necessary; and ease in seeing a specialist; and using certain health care services, including office-based provider visits, outpatient department provider visits, and dental care visits.

When the mandated evaluation compared CHIP enrollees with the privately-insured group, it also found that CHIP enrollees experienced comparable access and service use for many, but not all, measures, and that parents of children enrolled in CHIP experienced less financial burden in paying their children’s medical bills.

CHIP enrollees used a similar level of preventive care and other health care services; however, CHIP enrollees had higher usage of prescription medication and lower levels of emergency department visits and hospital stays.

CHIP enrollees had similar rates of health and development screenings, but were 9 percentage points less likely to receive a flu vaccination.

CHIP enrollees had higher rates of dental access and utilization of certain services. For example, 92 percent of CHIP enrollees reported having access to dental coverage in 2012, compared with 77 percent of privately insured children. In terms of utilization, 84 percent of CHIP enrollees reported having a dental checkup or cleaning in the previous 12 months compared with 79 percent of privately insured children.

Parents of CHIP enrollees reported substantially less trouble paying their children’s medical bills and had much lower out-of-pocket spending levels.

For our assessment of the Medical Expenditure Panel Survey, we also compared CHIP enrollees’ access and service use with children who were privately-insured, and our findings were consistent with some of the findings in the mandated evaluation.

When asked about access to care, we found that respondents with children enrolled in CHIP reported experiences that were generally comparable with privately insured children for 5 of the 6 measures reviewed, including having a usual source of care; ability to make needed appointments; and ease in seeing a specialist.

Respondents’ reported ease in getting needed care was the only measure for which we identified a statistically significant difference.

CHIP families faced a lower financial burden than families with private insurance because of the federal requirement that states’ CHIP programs may not impose premiums and cost-sharing that, in the aggregate, exceed 5 percent of a family’s total income for the length of the child’s eligibility period.

However, with regard to the utilization of certain services, our prior work is less consistent with the findings of HHS’s mandated evaluation. For example, when asked about their use of certain medical and dental services, we found that access to care for CHIP enrollees was lower than that of the privately-insured for several services, and these differences were often statistically significant. Specifically, we previously reported that a lower proportion of CHIP enrollees reported visiting dentists (42.4 percent compared with 50.9 percent) and orthodontists (4.9 percent compared with 11.2 percent) within the past 12 months than did those who were privately insured; and a higher proportion of CHIP enrollees reported having an emergency room visit (14.1 percent compared with 10.4 percent).

Differences between our findings and those included in the national evaluation may be related to the timeframes of the data and the measures used. For example, some of the data used in our analyses predate the CHIPRA requirement that CHIP programs offer comprehensive dental benefits coverage beginning in 2009. The timeframes for both bodies of work also predate the implementation of the PPACA requirement that most individual and small group market health plans provide pediatric dental coverage.

Finally, while the mandated evaluation noted that, overall, CHIP programs were meeting the health care needs of most enrollees, it identified areas for program improvement. Specifically, many CHIP enrollees did not receive recommended preventive care or reported an unmet health care need. For example, slightly less than half of CHIP enrollees received a flu vaccination, and only about one-third received a developmental screening for children under age 6. In addition, one in four CHIP enrollees had an unmet health care need, with the highest unmet need being for dental care.

HHS Has Ongoing Efforts to Enhance State Reporting of Quality Measures and Identify Areas for Improvement to Care Provided in CHIP

HHS publishes data that states report on the Child Core Set measures in its annual quality report. While reporting on the Child Core Set measures is voluntary for states, the number of states reporting these quality measures and the median number of measures each state reports has increased steadily since reporting of the measures began in 2010. For example, beginning in fiscal year 2012, all 51 states have reported at least two or more measures, a notable increase from the 43 states that reported at least one measure for fiscal year 2010. Similarly, the median number of Child Core Set measures that states report has increased from about 7 measures in fiscal year 2010 to 16 measures in fiscal year 2013. HHS attributed the rise in state reporting to increased familiarity with the Child Core Set measures and the department’s efforts to streamline state reporting and provide technical assistance and guidance to states. For example, CMS established a Quality Measures Technical Assistance and Analytic Support Program in May 2011, which works with states to support their efforts in collecting, reporting, and using quality measures for their CHIP and Medicaid programs.

However, states varied considerably in the number of measures they reported in fiscal year 2013, ranging from 2 measures in Nebraska and Wisconsin to 25 measures in North Carolina and South Carolina. (See fig. 2.)

Several factors can affect a state’s ability to report the Child Core Set measures. Officials from the states we reviewed provided the following examples of challenges they face reporting the Child Core Set measures.

Mississippi and Pennsylvania officials cited difficulty reporting certain measures, such as the extent of follow-up care for children prescribed medication for attention-deficit/hyperactivity disorder, due, in part, to their not having access to the data required to report the measure.

Arizona, New Hampshire, Nevada, and Wisconsin officials cited the difficulty and cost of reporting certain measures, in particular those measures that require medical record reviews as opposed to the reporting of measures that use only encounter data. For example, HHS suggests that medical record reviews be used to calculate a perinatal measure related to the performance of caesarean sections and none of these states reported this measure in fiscal year 2013.

Rhode Island officials noted that it can be difficult to collect data for measures that are not nationally endorsed—and as a result, they may not report them. For example, in fiscal year 2013, Rhode Island did not report the Child Core Set measure of a developmental screening in the first 3 years of a child’s life, which had not been endorsed by the National Committee for Quality Assurance, but developed by a university in Oregon.

Noting that the state does not have a department dedicated to measuring quality, Alaska cited a lack of internal expertise needed to collect and report reliable data for the measures. As such, an official cited the need to leverage resources and work with other agencies within the state that have the expertise to analyze measures and set targets for quality improvement.

In light of difficulties cited by states in reporting on the Child Core Set measures, HHS reported ongoing efforts to assist states with reporting the measures. For example, to streamline state reporting, HHS began calculating three Child Core Set measures on behalf of states in fiscal year 2012. Specifically, HHS began calculating the preventive dental and dental treatment measures from the Form CMS-416. At this time, HHS also began using data available from the Centers for Disease Control and Prevention to calculate the neonatal central-line associated blood stream infection measure. In addition, HHS assists states by allowing states to report Child Core Set measures for the Medicaid population, CHIP population, or combined Medicaid and CHIP populations.

Additionally, HHS reported efforts to assist states in improving their reporting of the Child Core Set measures through the Quality Demonstration Grant Program. Through this program, HHS awarded 10 grants providing funding to 18 states to implement various projects to improve the information available on the quality of care provided to children enrolled in CHIP, including undertaking efforts to improve their reporting of the Child Core Set measures. For example, in one such project, Pennsylvania is testing the use of financial rewards to encourage certain health systems—which include hospitals, primary care practice sites, and other facilities—to use the Child Core Set measures to drive Pennsylvania also reported that it is quality improvement projects.recruiting health systems to determine the extent to which electronic health records can provide data for the Child Core Set measures for children.

From the measures submitted by states, HHS reports states’ performance to assess the quality of care for children enrolled in CHIP and Medicaid, and the results of this assessment are mixed. HHS calculates mean rates for most of the Child Core Set measures—which it calls performance rates—including primary and preventive care, perinatal health, management of acute and chronic conditions, and dental services, among the states reporting those measures. Based on this assessment, HHS determined that states had high performance rates for some measures, such as young children’s access to primary care. For example, a mean of 96 percent of children aged 12 to 24 months enrolled in CHIP or Medicaid had at least one primary care physician visit during fiscal year 2013. In contrast, states had lower performance rates for other measures. For example, a mean of 46 percent of children received at least one preventive dental service, and a mean of 25 percent of children (See table 2.) received at least one dental treatment in fiscal year 2013.As such, HHS specified that children’s access to oral health care continues to be a primary focus of improvement efforts in CHIP and Medicaid.

In addition to HHS’s review of states’ reporting on the Child Core Set measures, the department’s annual quality report includes the results of its review of external quality review reports and performance improvement projects from states that contract with managed care plans to deliver services for CHIP and Medicaid enrollees. States are required to annually review their managed care plans to evaluate the quality, timeliness, and access to services that the plans provide to enrollees, and HHS must include this information in its annual quality report. For the most recent annual quality report, 40 of the 42 states that contract with managed care plans to deliver services to CHIP and Medicaid enrollees Based on its review of these submitted external quality review reports.reports, HHS found that the most frequently reported performance measures from states’ external quality reports—which included well-child care, primary care access, childhood immunization rates, and prenatal/postpartum care—mirrored states’ most frequently reported Child Core Set measures in fiscal year 2013. In terms of HHS’s review of states’ performance improvement projects, 38 of the 40 states that submitted external quality review reports included at least one project targeted to improve the quality of care for children and pregnant women enrolled in managed care; for example, by implementing projects related to behavioral health and improving childhood immunization rates for children, and prenatal and postpartum care for pregnant women.

Cost, Coverage, and Access to Care Are Key Considerations in Determining the Reauthorization of CHIP Funding

Our prior work has identified important considerations related to cost, coverage, and access when determining the ongoing need for CHIP, many of which were echoed by officials from the 10 states we reviewed. With regard to cost, our prior work comparing CHIP plans to states’ benchmark plans, which were the models for health plans available under health insurance exchanges established under PPACA, found that costs—defined as deductibles, copayments, coinsurance, and premiums—were almost always less for CHIP plans.

CHIP plans we reviewed typically did not require the payment of deductibles, while all five states’ benchmark plans did.

The cost difference in copayments between CHIP plans and benchmark plans was considerable 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.

Families could face higher dental costs in states where dental coverage through the exchange is optional and offered as a stand- alone dental plan (SADP) as opposed to CHIP plans where dental benefits are included.

Officials from five selected states also expressed concerns about the higher costs of QHP coverage and the implications this would have for families.

See GAO-14-40. The five states evaluated in our prior work were Colorado, Illinois, Kansas, New York, and Utah. These findings were subsequently discussed in a hearing before the Subcommittee on Health, Committee on Energy and Commerce, House of Representatives on December 3, 2014. See GAO, Children’s Health Insurance: Cost, Coverage, and Access Considerations for Extending Federal Funding. GAO-15-268T (Washington, D.C.: Dec. 3, 2014); We are currently examining how CHIP coverage and consumer costs compare to selected QHPs that were available on the exchanges in these five states in 2014.

Based on a review of QHPs available on the state’s exchange in 2014, Nevada officials estimated that the average annual premium for a child in a family with an income of 168 percent of the FPL was more than two and a half times higher than the $200 premium for coverage in a CHIP plan. This price difference does not account for differences in co-pays, which the state does not charge under CHIP. The extent to which QHPs in the state apply co-pays to covered services could increase this price differential further. As such, Nevada officials were concerned that absent CHIP, families would not purchase QHP plans due to their higher cost.

Due to the additional premiums and cost-sharing associated with SADPs, New Hampshire officials expressed concern that families will forego dental care if they must purchase a SADP. The officials noted that cost-sharing particularly affects families with incomes from 185 to 250 percent of the FPL, which is 75 percent of the state’s CHIP population.

We also previously reported that coverage is a relevant consideration, and that separate CHIP and benchmark plans were generally similar in terms of their coverage of selected services and the services on which they imposed limits, with some variation. For example, the plans we reviewed were similar in that they typically did not impose any limits on ambulatory patient services, emergency care, preventive care, or prescription drugs; but commonly imposed limits on outpatient therapies, and pediatric dental, vision, and hearing services. Officials from several selected states pointed out that CHIP coverage was more comprehensive than QHPs for certain services, particularly for services needed by children with special health care needs.

Alaska and Pennsylvania officials noted that coverage of services— including orthodontics, vision, audiology, outpatient therapies, language disorders, and durable medical equipment—was more comprehensive in CHIP when compared with QHPs in their states.

Rhode Island officials highlighted the state’s coverage of comprehensive pediatric dental services and any medically necessary services deemed warranted as a result of the EPSDT benefit to which all CHIP-eligible children in the state are entitled. According to the state officials, these same services are either unavailable or unaffordable through QHPs in the state.

Arizona officials specified that coverage of certain enabling services, such as non-emergency medical transportation, family support services, and behavioral health services are included in the state’s CHIP plan, but may not be offered in QHPs.

With regard to access, our work found that CHIP enrollees generally reported positive responses in their ability to obtain care that was generally comparable to those with private insurance, with some exceptions, including lower utilization of dental and orthodontia services. Some of the states we reviewed also raised concerns related to access to care if CHIP funding is not reauthorized. For example, Nevada officials raised concerns about the ability of certain populations—specifically, children of undocumented parents—to access care if CHIP is no longer available. Nevada officials stated that these children could lose CHIP coverage since a significant portion of them have parents who may not file federal income tax returns that would expose them to tax penalties for failing to enroll their children in alternative health coverage. In addition, an Alaska official noted the need for further work on the comparability of benefits between QHPs and CHIP to ensure that the former could be an adequate substitute, and that children moving to QHPs would not experience decreased access to health care. The official noted that comparability across benefit packages is particularly important for children in households whose income changes would result in movement between CHIP and QHPs.

Agency Comments

We provided a draft of this report to HHS for comment. The department 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. In addition, the report will be available at no charge on the GAO website at http://www.gao.gov.

If you or your staffs have any questions about this report, please contact me at (202) 512-7114 or yocomc@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 II.

Appendix I: Uninsured Rates, State Children’s Health Insurance Program (CHIP) Characteristics, and Coverage Approaches

Percentage of uninsured children in 2013

Act (PPACA)

Percentage of uninsured children in 2013

Act (PPACA)

State Texas

Act (PPACA)

As of February 2015, 42 states operated separate CHIP programs (2 states had a separate CHIP program only, and 40 states covered CHIP children through both a separate program and an expansion of their Medicaid program). The other 9 states covered CHIP children through an expansion of their Medicaid program, which we refer to as a “CHIP Medicaid expansion.” Minnesota and New Mexico have CHIP income eligibility levels that vary by age group; therefore, we reported the highest income eligibility level reported for these states—which are ages 0 to 1 year in Minnesota and ages 0 to 5 years in New Mexico. These state-based marketplaces use the federally facilitated marketplace’s information technology platform for applicants to apply and enroll in their respective states.

Appendix II: GAO Contact and Staff Acknowledgments

GAO Contact

Staff Acknowledgments

In addition to the contact named above, Susan T. Anthony, Assistant Director; Sandra George; Seta Hovagimian; Drew Long; JoAnn Martinez-Shriver; Vikki Porter; Lisa Rogers; Eden Savino; Laurie F. Thurber; and Kate Tussey made key contributions to this report.

Related GAO Products

Health Care Transparency: Actions Needed to Improve Cost and Quality. GAO-15-11. Washington, D.C.: October 20, 2014.

Children’s Health Insurance: Cost, Coverage, and Access Considerations for Extending Federal Funding. GAO-15-268T. Washington, D.C.: December 3, 2014.

Children’s Health Insurance: Information on Coverage of Services, Costs to Consumers, and Access to Care in CHIP and Other Sources of Insurance. GAO-14-40. Washington, D.C.: November 21, 2013.

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.

State Children’s Health Insurance Program: CMS Should Improve Efforts to Assess whether SCHIP Is Substituting for Private Insurance. GAO-09-252. Washington, D.C.: February 20, 2009.

Health Insurance For Children: Private Insurance Coverage Continues to Deteriorate. GAO/HEHS-96-129. Washington, D.C.: June 17, 1996.