May 6, 2015
On April 16, President Barack Obama signed the Medicare Access and CHIP Reauthorization Act (MACRA) into law. Jonathan Oberlander, PhD, professor of health policy and management at the UNC-Chapel Hill Gillings School of Global Public Health and professor of social medicine at UNC’s School of Medicine, wrote a perspective piece on the law for The New England Journal of Medicine. The essay, titled “The Children’s Cliff — Extending CHIP,” was published online May 6.
As Oberlander and colleague David Jones, PhD, explain, the law implements a two-year extension of CHIP (the Children’s Health Insurance Program). CHIP is a federal-state program that provides health care coverage to children up to 18 years old in families that have low incomes but do not qualify for Medicaid.
CHIP was enacted in 1997 with broad bipartisan support. States can choose to operate the program as a standalone option, an extension of Medicare or a combination of the two approaches. The program has been notably successful at enhancing health insurance coverage among children. By 2012, CHIP had helped to reduce the proportion of uninsured children in low-income United States families from 25 percent to 13 percent.
CHIP’s funding has been previously extended in 2009 and 2013. Had the latest reauthorization not passed, the health insurance of more than 5 million children would have been in jeopardy.
Recent tensions over the Affordable Care Act fueled concern that a heated partisan debate would derail CHIP renewal. The program was eventually linked to a must-pass bill that cancelled scheduled cuts in Medicare payments to doctors and terminated Medicare’s sustainable growth formula for reimbursing physicians. The bill passed easily in both the House and Congress with overwhelming bipartisan support.
The strong support for CHIP among both Democrats and Republicans reflects its unique political attributes: insuring children is a popular cause, the program’s flexibility is appealing and the overall program expenses are modest.
The recent approval, however, ensures CHIP’s continuation for only two more years. Democrats pushed for a four-year extension, but ultimately had to compromise. In 2017, CHIP will be voted on once again, making the program’s long-term prospects uncertain.
“CHIP’s extension is good news for children and working families,” Oberlander noted, “but this agreement delays rather than resolves the question of what role CHIP should play in U.S. health care following the enactment of the Affordable Care Act.”