Enforce 42 CFR 457.560 5% family income cap on chip_premium

[MaxGhenis]

Follow-up from #8086 (found in session review).

Problem

Federal law (42 CFR 457.560) caps total CHIP cost sharing at 5% of the family's income for the 12-month enrollment period. "Cost sharing" in this regulation combines:

• Premiums and enrollment fees
• Copays, deductibles, coinsurance
• Any other charges imposed on CHIP enrollees

PolicyEngine's chip_premium (from #8086) is computed from state schedules without this cap. For high-income CHIP-eligible families in states with steep schedules — especially WI (no per-child cap, up to $97.53/child/month at the top bracket) and MO (up to $508/month for a large family of 8 at 225-300% FPL) — the computed premium alone can approach or exceed the 5% cap.

Example (MO family of 8 at 280% FPL, ~$80k income): encoded premium tier 3 = $508/mo = $6,096/yr. 5% cap = $4,000. State would reduce premium to $4,000. We currently return $6,096.

Fix (first-pass)

Apply the 5% cap on chip_premium alone:

capped_premium = min(computed_state_premium, 0.05 * tax_unit_income)

in each <state>_chip_premium variable, or as a post-computation cap in the federal chip_premium aggregator.

Known imperfection

Because the real cap binds on premium + copays + other cost-sharing, capping premium alone:

• Is too lenient on the cap: if copays are $600 and premium computed at $3,000 for a family with $50k income, real combined = $3,600 > $2,500 cap → state would reduce. We return the uncapped $3,000 because we don't see the copays. Real collect = $1,900 (cap-adjusted). Difference: $1,100.
• Is never too harsh: premium-only capping never binds harder than the true combined cap would.

Net effect: under-applies the cap. Better than not applying it at all, since the few cases where premium alone exceeds 5% are real.

Full fix requires copay modeling

Proper enforcement of 42 CFR 457.560 needs chip_copay or similar — rules-based or imputed — added to the cost-sharing sum. Each state has its own copay schedule by service type (per office visit, per ER, per prescription, etc.). Modeling utilization is hard; a simplified state-average-per-enrollee imputation would be a first pass.

Separate follow-up — more research effort than the cap alone.

Acceptance

• 42 CFR 457.560 cap enforced on chip_premium (not combined with copays).
• Test: MO family of 8 at 280% FPL, $80k income: computed premium capped at $4,000 (5% of $80k), not $6,096.
• Test: WI with many children at top FPL tier shows capping behavior.
• Variable docstring calls out the copay-absent under-enforcement explicitly.

Related

• Add chip_premium with 17-state CHIP premium implementations #8086 — CHIP premium framework (where the uncapped computation lives)
• MOOP should use computed premiums instead of fully imputed, so reforms propagate to SPM #8089 — MOOP architecture