Crowd-out Effect of CHIP Expansion 44 to 70 Percent
In 2009, Congress reauthorized the Children’s Health Insurance Program (CHIP), providing states added resources and options to insure children. About 15 states expanded CHIP eligibility to families with incomes up to 400 percent of the federal poverty level (an income of $94,000 for a family of four) with a median upper limit for coverage at 250 percent of poverty, the highest since CHIP’s inception in 1997. Federal CHIP funding is up for reauthorization in 2015 and some argue that CHIP is unnecessary because of Obamacare’s subsidies, which kicked in this year.
Source: “The Impact of Recent CHIP Eligibility Expansions on Children’s Insurance Coverage” from Health Affairs.
“Crowd out” refers to people dropping private insurance in response to increased availability of subsidized coverage. Previous estimates measured the crowd-out effect of said CHIP expansion to be as high as 50 percent. Using data from the American Community Survey between 2018-12, Ian M. Goldstein and colleagues estimated a crowd-out effect of 63 percent, with alternative estimates ranging from 43.8 to 70 percent.
Source: “The Impact of Recent CHIP Eligibility Expansions on Children’s Insurance Coverage” from Health Affairs.
By crowding out private insurance at such high rates, CHIP separates children from their family’s coverage and spends taxpayer’s money where it is not needed. At the end of 2013, 6 million children had CHIP insurance. However, 5.1 million of those children also qualify for subsidized insurance in the Obamacare exchange. As funding for the program approaches re-authorization in October 2015, policy makers must examine who still actually needs CHIP while considering the adverse impact high crowd-out levels have on family coverage.
“400 percent of the federal poverty level (an income of $94,000 for a family of four)”
$ay what?
You got to love New York. I have 2 clients in Iowa that are lawyers. There MAGi is around $70,000 for the family of 4. That puts them at under the 302% needed to force the kids into SCHIP. They wanted the kids on there health plan but because they qualified for tax credits the kids were forced into the Iowa hawk-I plan.
This is why the crowding out is getting so significant. The expansion reaches into the middle class.
“Middle class,” it’s a funny phrase. I’d like to know what the heck it means today when 96K a year can get you CHIP.
Is there an estimate on how much taxpayer money is spent a year resulting from crowding out?
Think of crowding out as the result of tax payer money, i.e. a reudction in private investment as a result of government spending (i. e. taxpayer money)
The states are very good at hiding the true cost. They ask for increases and only report % changes. It is almost impossible to find out what the actual premiums paid to the insurance companies for the administration of the SCHIP plans. Iowa has it listed in there budget 64,000 kids at a ruff cost of $2,400 per kid per year. However they only report the state portions and not the federal payments they receive. Here is a link to there budget. Extrapolate it out for the country.
http://www.dom.state.ia.us/index_files/FY2015_Budget_Book.pdf
This is all so financially ridicules it’s comical. Besides I think 20 trillion in debt just sounds like a good round number by 2016..should be the end of the world as we know it.
“At the end of 2013, 6 million children had CHIP insurance. However, 5.1 million of those children also qualify for subsidized insurance in the Obamacare exchange.”
How would one quantify or define the economic consequences of this type of redundancy?
Who gets “crowded out”? Are they crowded out of the private plan or crowded out of the public plan?
The term refers to a reduction in private investment as a result of public spending.