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How to Wreck an Already Weak Health Care System

The failure to extend the Children's Health Insurance Program reveals the confusing, precarious nature of the U.S. social safety net.

Joe Raedle/Getty Images

In a country where affordable health care is not a guarantee, the Children’s Health Insurance Program is a lifeline. Established in 1997, the program covers nearly nine million children. But the GOP-led Congress missed an October 1 deadline to reauthorize the program, despite its historically bipartisan support and its public popularity. A recent poll conducted by the Kaiser Family Foundation showed that 75 percent of respondents rank the reauthorization of CHIP as a major priority.

Nevertheless, congressional progress on the issue has stalled. The House recently voted to reauthorize it, but the Senate has so far failed to reach an agreement. Senator Orrin Hatch proclaimed on Thursday that the Senate “will do” CHIP, but that it must be done “the right way.” Hatch’s concerns appear to be fiscal: “The reason CHIP is in trouble is because we don’t have money anymore,” he stated, even as he and his colleagues prepare to pass a $1.5 trillion tax cut package heavily skewed toward the wealthy. As David Dayen noted earlier this week in The New Republic, extending CHIP for five years would cost 1.6 percent of that amount.

Families who rely on CHIP now inhabit a health care no-man’s-land. This is partly due to the way CHIP was written. States fund the program and are later reimbursed by the federal government; state governments have some flexibility and can structure and fund the program in different ways. Some states will run out of CHIP funding soon, others have leftover CHIP funds from previous fiscal years that they can apply to keep the program going for a few more months. “The other thing to keep in mind is that the state can’t wait until they completely exhaust funds before they start making program changes, because they also need to build in time to actually implement program change,” explains Samantha Artiga, the director of the Disparities Policy Project for the Kaiser Family Foundation. The state of Colorado recently informed parents that they should prepare to lose CHIP coverage by January 3. In Minnesota, officials are now funding the program out of the state purse.

That means a crucial piece of this country’s jigsaw health care system is in jeopardy. “The Children’s Health Insurance Program really works together with Medicaid to provide a strong base of coverage for our nation’s children,” Artiga continues. “It provides coverage to children who are in families that don’t qualify for Medicaid but still don’t have access to or cannot afford coverage in the private market. So it really filled an important gap in coverage for those children in those families.”

CHIP’s vulnerability exposes the weaknesses of the American safety net. If it dies by negligent homicide, parents have few alternatives available to them. That was true under President Obama, but the situation is particularly dangerous now: The Trump administration’s quest to undermine the Affordable Care Act has pushed insurers out of the marketplaces; premiums, meanwhile, are going up. And while employers may guarantee health insurance as a benefit, that guarantee doesn’t promise affordability—which means it isn’t always much help to working parents. CHIP’s murky future is a byproduct both of the GOP’s war on welfare, and of a more generalized and serious dysfunction.

“Sometimes when you’re in an income bracket, you might find yourself in between jobs periodically,” says Leanna George, a North Carolina mother who recently testified before the Senate in defense of CHIP. George’s son has autism and ADHD, and she says that CHIP ensures his consistent access to therapeutic services. “Even if we’re moving from one company to another, coverage always remains constant. He was never without access to care or coverage, which is so important, when families are somewhat transient in terms of where they work and where they get their insurance from,” she explains.

Anticipating the potential loss of CHIP, George says she added her son to her husband’s health insurance. That raised their monthly premium by $100. She hopes that CHIP will still be around to cover her son’s needs, but her family must stay in a specific income bracket to keep using the program. “It’s really a very fine line between if you’re on the higher ends socioeconomically to find yourself out of coverage altogether,” she says. “We’ve been in situations where we made the cutoff by $5 a month for care that would cost us $400 to $500 out-of-pocket. It’s a disservice to families by discouraging advancement, if you know what I’m saying.”

Her family’s precarious situation isn’t unusual, especially for parents of children with special needs. “It really kind of fills that gap for some of our children who cannot access Medicaid either because they don’t have a disability that is significant enough to meet the disability standards to gain access to Medicaid, or because they have a little bit higher incomes than Medicaid allows in their states,” says Julie Ward, director of health policy for The ARC, an advocacy group for people with intellectual and developmental disabilities. “It is like a piece of the puzzle for coverage for kids. I mean, we’re doing better than we ever have in this country in terms of insuring children and making sure they get health insurance.”

Ward adds that “about 25 percent of kids who rely on CHIP have special health care needs. That could be asthma, that could be diabetes, that could be a whole range of needs. So we’re really concerned.”

With the potential loss of CHIP, and with cuts to Medicaid an ever-likelier possibility, parents are scrambling to figure out a way to make sure their children are able to access medical care. But Republicans are also starving one of their few alternatives: Community health centers, which do not turn anyone away because of their inability to pay for services. Health centers face a 70 percent cut to their federal funding in 2018 unless Congress fixes the funding cliff before January. USA Today reported in September that the Department of Health and Human Services estimates a funding shortfall could close 2,800 centers, cost 50,000 jobs, and impact nine million patients.

Amy Simmons, a spokesperson for the National Association of Community Health Centers, says that her organization has already seen center closures. “If you’re living in a rural community and you’re poor and the nearest doctor is 50 miles in any direction, a community health center is a lifeline. Particularly if you have you have a child with asthma or diabetes, for instance,” she explains. Because community health centers don’t turn patients away, cuts to the safety net also mean they’ll have to bear greater burdens: Simmons says centers already have tight operating margins. Without a fix, there won’t be much to save Americans from preventable deaths or to stop a family’s freefall into medical bankruptcy.

The GOP’s tax bill will, if passed, subject families to even tougher conditions. NPR reports that House Republicans wanted to eliminate the Orphan Drug Tax Credit entirely to help pay for their tax cuts; while the Senate version of the tax bill keeps the credit, it still reduces it. This means that pharmaceutical companies could have fewer incentives to keep producing orphan drugs for rare diseases. For families charged with the care of people with disabilities, that’s a grim prospect.

The GOP’s attacks on health care are useful in at least one sense: They clarify the limitations of our patchwork system. Members of the working and lower middle class have to navigate health care laws that can vary drastically from state to state. Even the names of those laws can be confusing: George notes that in North Carolina, one health care program is called Health Choice, and another is called Health Check. “You have to remember, which one is CHIP program, which one is not?” she observes.

When those laws don’t meet a family’s needs, they have to depend on a series of failsafes. Those failsafes themselves largely depend on the good graces of the federal government. Newer laws, like CHIP and the Affordable Care Act, improve that system, but they don’t address the real problem that plagues it. The cracks in our system don’t occur naturally; they’re created by a government that is still incapable of accepting the simple premise that everyone, no matter their income or job status, should have access to good, affordable health care.

Congress still has time to act. But Leanna George could still be out of luck. Her husband is scheduled to receive a raise in January. That boost in income, which should be great news, could cost them access to CHIP. “We started running the numbers and figuring out, ‘Okay, if we lose CHIP, how can we afford health insurance.’ I’m looking at our household finances. We may be giving up some of the extracurricular activities that my son does. He’s in a drawing class right now, but come January, we might not be able to do that anymore,” she says.

She adds, “In the end, the ones who lose out are the kids. If families are making these cuts, the money has to come from somewhere, whether you’re the federal government or you’re a family in North Carolina.”