On November 3, 2017, in a vote cast primarily along party lines, the United States House of Representatives passed a five-year extension of funding for the Children’s Health Insurance Plan (CHIP).
The vote on November 3 is Congress’ most substantial move toward reauthorization of the Program since its expiration on September 30. Although a state-run program, funding for CHIP is approved by the federal government, then disbursed to the states, which subsequently administer healthcare services pursuant to policies crafted by each state. While every state has adopted the expansion of health coverage to include kids who qualify for CHIP, how the Program is implemented varies. Many states process CHIP funding through Medicaid expansion; some maintain a system thoroughly separate from Medicaid; while others utilize a mixed system.
For twenty years, CHIP has covered children and pregnant women from low- to moderate-income families that typically earn too much to qualify for Medicaid and too little to afford private insurance, providing these populations with prescription medicine, checkups, and hospital care.
In 2016, roughly nine million children were insured under CHIP. In Utah, where 20,000 children are covered, the Division of Medicaid and Health Care projects that federal funding of the program would be exhausted by the end of December, and the state would probably end the program altogether if Congress does not act. Similarly, Arizona anticipates it will run out of federal funding by December 31, 2017; its officials announcing that if Congress does not reauthorize federal funding prior to that date, the state will be forced to consider various policy alternatives, since state statute mandates the freezing of enrollment if the federal match goes below its current level. Likewise, in Ohio, where 200,000 children are covered under CHIP and 97% of the program is supported by federal funds, state officials estimate complete depletion of funds by the end of the year. Unsurprisingly, California, the nation’s most populous state, covers the most CHIP beneficiaries with over 1.9 million children participants, and estimates the program will also exhaust funds by the fourth quarter of 2017. In all, as many as eleven states have given notice that funds will likely run out by year’s end.
Because some families of CHIP recipients are eligible for Medicaid, many children and pregnant women may obtain health insurance by other means. However, of the current CHIP enrollees, nearly four million children are still at risk of losing their health coverage altogether. As with all populations lacking healthcare, this shift will likely result in heavier burdens on the system, exacerbating emergency room occurrences, and increasing the overall healthcare costs.
While CHIP has enjoyed popularity among both Democrats and Republicans in the past, the legislation is expected to be met with great resistance as it moves to the Senate. In addition to reauthorizing CHIP for five years, the bill passed on November 3 would also provide funding for community health centers for two years. The legislation would simultaneous make changes to the Affordable Care Act policies such as “grace periods” for premium non-payments, changes in income determination rules and other measures, which are very unpopular with Democrats.
CHIP falls under the statutory authority of the Social Security Act of 1965. Originally sponsored by Senator Orrin Hatch (R-UT) and the late Senator Edward Kennedy (D-MA), the legislation was signed into law in 1997. Since then, after a number of extensions and a budget increase that expanded insurance to more than four million children, Congress’ current inaction has brought CHIP closer to the brink of extinction than it has been since its enactment two decades ago.