House Approves Legislation that Cuts Children from Health Coverage

May 13, 2011

Washington D.C. - Today, the First Focus Campaign for Children expressed strong opposition to the legislation approved by the House Energy and Commerce Subcommittee that will significantly increase the number of children without health insurance. The State Flexibility Act (H.R. 1683) would repeal a provision of the health reform law that requires states to maintain current eligibility and enrollment requirements for Medicaid and the Children’s Health Insurance Program (CHIP). Without this so-called “Maintenance of Effort” (MOE) provision, an estimated 14 million children currently covered by either Medicaid or CHIP could be dropped from coverage.

While the legislation seeks to secure some short-term federal savings by allowing states to eliminate or reduce Medicaid and CHIP coverage, a report released Wednesday by the Congressional Budget Office (CBO) found that the bill would significantly increase in the number of uninsured individuals, especially children. In fact, under the State Flexibility Act, two out of every three individuals at risk of losing health care coverage are children.

Over the long-term, the bill will have an increasingly severe impact on CHIP, resulting in half of states entirely eliminating their CHIP programs by 2016, and the remaining states scaling back their coverage for children. CBO estimates that by 2016, 1.7 million children will have been dropped from CHIP coverage, leaving some children uninsured completely and enrolling others in the new state exchanges created as part of the health reform law.

Bruce Lesley, President of the First Focus Campaign for Children, a bipartisan advocacy organization, issued the following statement:

“We strongly oppose the State Flexibility Act as it effectively ends the Children’s Health Insurance Program (CHIP) as we know it. In fact, the bill dismantles years of progress ensuring health coverage for low-income children by dropping them from CHIP, leaving them uninsured, or moving them into the insurance exchanges. Children across the nation would be left with no coverage, or coverage that fails to come even close to matching the comprehensive benefits and affordable cost-sharing currently provided for children through CHIP.

“Since its inception in 1997, CHIP has shown to be a cost-effective program that provides remarkable results, reducing the number of uninsured children by almost a third – even as uninsured rates for adults increased steadily. Today the program provides coverage to more than seven million low-income children. Support for children’s health coverage among the public is overwhelming. A recent public opinion survey commissioned by First Focus found 73% of Americans oppose cutting CHIP. In addition, an analysis by Watson Wyatt Worldwide confirms that children currently enrolled in CHIP have stronger coverage than would otherwise be available. It provides comprehensive benefits to children that specifically address their unique health care needs while limiting families’ out-of-pocket costs. The evidence is clear that CHIP works for kids.

“As our nation’s economy and families struggle to recover from the recession, the proper role of government is to ensure that our most vulnerable citizens are not left worse off. CHIP and Medicaid have played a critical role in significantly reducing the child uninsured rate to less than 10 percent, over the past decade. Additionally, despite the devastating impact of the recession, which produced serious increases in child poverty and an increasing number of adults without health insurance, the uninsured rate for children remained flat, largely due to these successful programs.

“It shouldn’t take a budget or health care expert to recognize that balancing budgets on the backs of children doesn’t add up to a positive future for the next generation or our country. Instead of placing children directly in harm’s way, we urge our nation’s leaders to protect children from harm as they work to find solutions to our budget challenges.”

Contact:
Katie Peters
202.657.0685 (office)
202.445.4312 (mobile)
katiep@firstfocus.net