Saturday, February 22, 2014

Children, CHIP, Medicaid and the ACA

Means-tested government benefits are inevitably a somewhat blunt instrument. One inflexibility in the Affordable Care Act is its propensity to put children into CHIP and young adults into Medicaid.

Every state has its own threshold for CHIP eligibility, which the ACA incorporates into its calculations. If the state threshold is 300% of the Federal Poverty Level (FPL), then any ACA applicant in that state with children and an income under that benchmark will find their children enrolled in CHIP, while the adults select a subsidized plan from the exchange. A family with CHIP-eligible kids can enroll the whole family in an exchange plan, but the kids will be unsubsidized, according to the Kaiser Family Foundation.

Likewise, a lot of young adults, including most college students, will have an income that qualifies them for Medicaid -- that is, below $15,521 in 2014 --  and so will not be able to get a subsidy for a private plan if it better suits their needs.

For parents of children and young adults with serious preexisting conditions, continuity of care can be a huge issue, and it may not be possible under CHIP or state Medicaid programs. One reader has written to me about her child, a college student who had been paying for an expensive, high-deductible, mandatory student health plan through December of last year. This student -- "Sean" -- has a condition that is treated with medication that costs thousands of dollars per year.  Insurance coverage to help pay for the meds is important to the family, but maintaining care with the student's current providers is equally or more important.

Sean determined that under the ACA he would qualify for Medicaid (his parents did not claim him as a dependent), which he and his family felt would disrupt his medical care.  He found a platinum Qualified Health Plan (QHP ) on his state exchange with a premium of under $200 per month -- much less than the college plan -- and a very low deductible and out-of-pocket maximum. He purchased the plan directly from the insurer -- saving thousands in comparison to the college plan, but also paying thousands more than he would under Medicaid.

Sean is fortunate both to have the family resources to pay for the private plan and also to live in a state and county where QHP prices are among the lowest in the country. If he had neither advantage, he would be fortunate, relatively,  to have access to Medicaid under the ACA.

But as some red states look at crafting "private option" variants of the ACA Medicaid expansion, which would put those whom the ACA deemed eligible for Medicaid into subsidized private plans (at doubtless greater expense to the state), it's worth keeping in mind that a different kind of private option -- allowing ACA buyers to opt out of CHIP or Medicaid, perhaps at something of a price premium -- might suit the needs of a substantial subset of Americans.

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