Approaches to Medicaid, CHIP Expansion Expected to Differ

While the Senate Health, Education, Labor, and Pensions (HELP) Committee, which completed its reform bill in July, does not have jurisdiction over Medicaid and CHIP, it has sketched a plan that it is suggesting to the Senate Finance Committee. Among the areas being discussed:

• If Medicaid eligibility is expanded on the basis of income, should the House's limit (of 133% of the federal poverty level) remain? The HELP committee had suggested going up to 150% of the federal poverty level, while a Senate Finance Committee discussion draft released in spring 2009 had suggested a lower threshold of 115%.
• Should the federal government cover all of the costs of enrolling all of these people in Medicaid, as the House has proposed?
• Should low- and moderate-income individuals and families with incomes too high for Medicaid--and up to 400% of the federal poverty level--be eligible for taxpayer-funded credits to help them purchase private health insurance coverage?
• Should states be able to use Medicaid dollars to help pay the costs of employer-sponsored health insurance for Medicaid-eligible individuals?

Supporters of Medicaid and CHIP have said that they are more cost effective when compared to private insurance, according to the brief. Also, they have said that dollars spent on Medicaid stretch further than dollars spent on private coverage because   Medicaid programs get a discount on prescription drug costs and have lower overhead costs than commercial insurers.

On the other side, those who oppose expansion said the need is not there to now expand public coverage options. Some have said that the federal government should not spend any more dollars on public insurance programs of any type and should instead use federal resources to subsidize the purchase of private health coverage.

The decision of how and whether to expand coverage for uninsured low-income people "will depend in part on whatever Congress and the president decide is affordable," the researchers concluded. It also will also depend on what can be paid for through additional revenues and any savings reaped through healthcare reforms.

In addition, those savings must be counted as "scorable" by the CBO. The less in revenue or savings that Congress is able to identify, the fewer people are likely to be covered through health reform legislation, the brief said.