Families across the nation are anxiously waiting to see if lawmakers will continue to fund the Children’s Health Insurance Program (CHIP), which helps nearly 9 million children obtain health insurance.
While funding for CHIP officially lapsed last year, Congress passed $2.8 billion in stopgap funding in December designed to keep the program alive for a few months.
That funding bought some time for states… but not much.
A new analysis from the Kaiser Family Foundation found that 16 states projected a funding shortfall before the end of this month, putting hundreds of thousands, or even millions, of children at risk for losing coverage.
With Congress facing a January 19 deadline to pass a spending bill to fund the federal government, experts in medical and public health industries are hoping that CHIP will finally be fully funded.
However, with the deadline just one day away, CHIP’s future remains uncertain.
The history of CHIP
CHIP, which was passed by Congress in 1997, costs approximately $13 billion a year with almost $10 billion paid for by the federal government, according to the Kaiser Family Foundation.
States administer the program to help fund coverage for children in families that make too much to qualify for Medicaid but not enough to afford health insurance.
While this federal block-grant program is now in limbo, it’s been popular among both Democrats and Republicans since its inception 21 years ago.
The program is also a money saver.
Earlier this month, an analysis by the nonpartisan Congressional Budget Office (CBO) found that funding CHIP would result in net savings for the federal government of $6 billion, compared to other healthcare coverage options.
“Extending funding for CHIP for 10 years yields net savings to the federal government because the federal costs of the alternatives to providing coverage through CHIP (primarily Medicaid, subsidized coverage in the marketplaces, and employment-based insurance) are larger than the costs of providing coverage through CHIP during that period,” CBO officials said in their report.
What happens if there’s no money
While no state has stopped covering children after the October lapse in funding, experts say the uncertainty has put a strain on the system.
An analysis from the Georgetown University Health Policy Institute found that as many as 1.7 million children in 20 states and the District of Columbia will be at risk for losing coverage by the end of next month if funding isn’t renewed.
At least 16 states could run out of funding as soon as the end of this month, according to the Kaiser Family Foundation.
Samantha Artiga, an analyst at Kaiser Family Foundation, said the lack of funding has put states in a difficult position as they try to keep their 2018 budgets balanced.
“It’s incredibly challenging for them to be managing their program without a stable source of funding and to be planning ahead,” she said. “States that are thinking about making coverage reductions or changes in their coverage, those aren’t things that can be done overnight.”
With funding uncertain, Artiga explained state officials have to spend money and manpower on figuring out a way to keep the program going as long as possible and how to pull back on costs if funding is ultimately not approved.
“Those all involve time and money on the administrative side so states are extending efforts in those areas to make program changes or plan program changes,” she said.
For families, the uncertainty can be a problem as they get conflicting reports from state health officials who administer the program.
“There’s the potential that some families may lose coverage,” Artiga said. “They may not renew coverage because they may think it’s no longer available.”
Some states have had to send out multiple notices that could be confusing.
In December, Colorado notified families that it would terminate coverage on January 31, but then announced it would continue coverage until the end of February after the funding measure.
Connecticut initially closed new enrollment on December 23, but reopened enrollment after the stopgap funding was passed.
Virginia officials reported that the stopgap funding would allow them to continue coverage through the end of January and “maybe longer.”
“It’s also creating stress and worry among families,” Artiga said of this uncertainty. “Particularly among families who have kids.”
In December, the American Academy of Pediatrics, the Children’s Defense Fund, and the Children's Hospital Association, among another associations, came out against the passage of the short-term funding and pushed Congress to fully fund the program for five years.
“Congress’ failure to extend CHIP funding long-term has resulted in a manufactured emergency that has real consequences for children, families and pregnant women. It doesn’t have to be this way,” group officials said in a statement. “Right now, the greatest threat to children’s health care coverage is congressional inaction.”