iPhone 5 home button problems, sunk in and chipping? Replacement?

Ever since I got my iPhone 5 back at the beginning of November, I noticed my home button was slightly sunk in so it wasn't smooth with the rest of the screen. This slightly bothered me, but I didn't think of replacing it in fear that I might get a more serious problem; However, now I'm starting to get one of my own.

Today I was cleaning out the lint that gets stuck in between the edges of the home button, which is a bit more serious since it's sunk in, and I noticed there was something white that I couldn't get off of the top right edge of the button, it was just stuck there. So I started cleaning it and come to find out it was the actual material of the home button chipping off of it... Now I'm not exactly sure what the substance is that's on top of the home button (it seems sort of plasticy), but it's starting to chip and it's made a rather distracting white line near the edge of the button.

I'm wondering if I took it into the Apple Store, would they replace the phone for me? It's a really distracting and annoying problem... I've used a magnifying loupe to look up close and it is indeed chipping, I'm not sure how, but it is... I don't know what to do :( Any help, please?

UPDATE: I found other posts about it online, It's apparently the lamination of the home button peeling off.. Doesn't sound good :(