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new study from the Urban Institute, conducted on behalf of the Medicaid and CHIP Payment and Access Commission (MACPAC), warns of major consequences if Congress fails to extend funding for the Children's Health Insurance Program past the September 30, 2015 expiration date. Those consequences: 3.7 million children losing CHIP coverage, and an additional 1.1 million becoming uninsured—a 40 percent increase in the uninsured rate of children.
The CHIP program provides an important safety net for children. In the absence of CHIP funding, an estimated 3.7 million children enrolled in separate CHIP programs in 36 states would need to obtain coverage elsewhere in 2016. We find that about half these children would be eligible for subsidized coverage in the marketplace. In general, families would face much higher out-of-pocket costs and less-comprehensive benefits when they use services in marketplace plans than they would under CHIP (Bly, Lerche, and Rustagi 2014). For 63 percent of children in this situation, their parents would already be enrolled in subsidized marketplace coverage, and the family would face no additional premiums to cover them. For other families, the whole family would need to enroll in marketplace coverage to cover the children, making the incremental costs much higher than covering the child under CHIP. […]
The analysis presented here estimates that an additional 1.1 million children would become uninsured if separate CHIP coverage were eliminated. This would constitute a 40 percent increase in the number of uninsured children in the United States relative to the number projected under the ACA with the continuation of CHIP.
One of the coverage problems is the "family affordability glitch" in Obamacare. The subsidy provision in the law does not allow families with incomes below 400 percent of the federal poverty line to receive subsidies if just one of the parents has "affordable" health insurance through their employer—even when that coverage won't cover dependent spouses or children. If it's affordable for the employee—less than 9.5 percent of their family income—that family isn't eligible to buy insurance through Obamacare. So about half of the families of the 3.7 million kids who would need to find new insurance if CHIP isn't funded are caught in this glitch—insurance to cover the kids will cost more than 9.5 percent of their family income, but they still can't get assistance through Obamacare subsidies.
The other big looming problem out there is the Supreme Court, and if it takes subsidies away entirely from families getting coverage through the federal exchange. Urban doesn't estimate just how many children would likely become uninsured in that case, but acknowledges that it would indeed "cause more children to join the ranks of the uninsured."
This all definitely raises the stakes in the new governing experiment House Speaker John Boehner is conducting with Nancy Pelosi. They're attempting to end an annual problem—the Medicare doc fix—as well as provide two years of funding for CHIP. The test for Boehner will be to see if he can resist the siren call of his crazy caucus and pass this Democratic vote.