More than a Million Kids Could Lose Health Coverage Next Month if Congress Fails to Fund CHIP

Despite new indications that renewing the Children’s Health Insurance Program (CHIP) could actually save the federal government money, Congress has yet to pass a reauthorization of the program.

Nearly 1.7 million out of the 9 million children served by CHIP each year could lose healthcare coverage by the end of February if Congress fails to pass legislation to reauthorize the program, according to a new report from Georgetown University’s Center for Children and Families.

The authorization for CHIP expired at the end of September. In December, Congress passed a $2.85 billion “patch,” meant to provide supplemental cash to the program as Congress continues to weigh plans for long-term funding. The patch was part of the continuing resolution (CR) that Congress passed to avoid a government shutdown, which expires January 19.

Eleven states are expected to run through their remaining federal funds before the end of February: Arizona, Connecticut, Florida, Hawaii, Louisiana, Minnesota, Nevada, New York, Ohio, Washington State and Washington, DC.

By March, the report says, 24 states would face a shortfall.

“As February 1 approaches and Congress has still not taken action, some states are likely to send notices to families alerting them that their child’s coverage is in jeopardy and may begin procedures to freeze enrollment,” authors Tricia Brooks and Joan Alker wrote in the report.

CHIP helps states support children whose parents are not eligible for Medicaid, but cannot afford insurance for their children. It serves about 9 million children nationwide each year, and states have some discretion in setting their income eligibility standards, and eligibility varies across states.

According to the 2018-19 budget proposal for California: “Coverage for approximately 32,000 pregnant women and children [in California] is at risk if CHIP funding is not provided beyond March 2018 because they do not qualify for federally funded, full-scope [Medicaid].”

CHIP rules require states to return any unspent grant money into a “redistribution pool” which provides supplementary funds to states that run out of money for the program. When CHIP expired at the end of fiscal year 2017, there was just under $3 billion in this fund.

In the past, these redistribution funds were divvied up proportionally based on states’ projected budgetary shortfalls. However, the CR that authorized the “patch” funding also changed the redistribution protocol. Now, it will be distributed on a first-come, first-serve basis each month as states hit the end of their existing allotments.

New estimates indicate that extending federal funding for CHIP would cost significantly less than previously projected, according to the Congressional Budget Office. After last month’s tax reform, CBO analysts found that funding CHIP for the next five years would add $800 million to the deficit over 10 years, rather than the $8.2 billion originally projected.

A further CBO analysis, shared anonymously with several political websites, found that a ten-year reauthorization of CHIP would actually save $6 billion.

According to the CBO, by removing the individual insurance mandate put in place by the Affordable Care Act (ACA), the cost of buying coverage in insurance marketplaces will increase. Because CHIP would cause fewer children to enroll in coverage through the marketplace, it would mean the government is spending less per child.

In theory, this drastic drop in the net cost should make it easier for Congress to reauthorize funding for the program, which has enjoyed bipartisan support since its inception in the 1990s.

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Sara Tiano
About Sara Tiano 28 Articles
General assignment reporter for The Chronicle of Social Change

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