5 Things to Know About CHIP Reauthorization

Senator Orrin Hatch was the original co-sponsor of CHIP in 1991. He said he is in favor of a 5-year CHIP reauthorization.
Image: AP Photo/Pablo Martinez Monsivais

With three weeks before it ends, here are five aspects affecting CHIP reauthorization.

Federal funding for close to 8.5 million low- and middle-income children covered by the Children’s Health Insurance Protection (CHIP) Program is set to expire at the end of September. Here’s 5 things to know about a CHIP reauthorization:

#1 CHIP Covers Children That Are Not Medicaid Eligible

CHIP provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid, according to Healthcare.gov. Routine care is fully covered under the program, but some states might charge co-pays for additional care, and monthly premiums for enrollment.

Families that qualify do not have to pay more than 5 percent of their income for the year to enroll.

When CHIP was originally proposed and passed in 1997, Senator Orrin Hatch, the bill’s co-sponsor, said that without health insurance, “Children are being terribly hurt and perhaps scarred for the rest of their lives.” Hatch told reporters today that he is in favor of a five-year CHIP reauthorization.

#2 The Affordable Care Act Proposed Increased CHIP Funding for FY2016-2019 

According to the Kaiser Foundation, when the Affordable Care Act (ACA) extended CHIP, it provided for a 23 percentage point increase in CHIP matching rates for FY2016-2019 if the program were again extended.

ACA’s murky fate further complicates the short window Congress has for a CHIP reauthorization.

#3 The Proposed 2018 Budget Would Cut CHIP by $5.8 Billion

In 2017, President Donald Trump’s proposed 2018 budget extended CHIP for another two years, but cut it by $5.8 billion. Also proposed, federal payments would no longer match state spending on coverage for kids whose families make more than two-and-a-half times the federal poverty level, about $51,000 for a family of three.

About 50 percent of states currently cover children above that cutoff.

#4 States Will End Up with Budget Shortfalls This Year

States have assumed CHIP federal funding in their budgets, so most will experience a funding shortfall if Congress doesn’t extend CHIP, according to The Hill.  CHIP reauthorization delays could soon grind programs to a halt.

“We’re dangerously close to the wire,” said Linda Nablo, chief deputy director of the Virginia Department of Medical Assistance Services. Nablo also told Senators this week, according to Modern Healthcare, that many states would be forced to send notices to CHIP beneficiaries, health plans and providers as soon as Dec. 1 if CHIP funding is not renewed this month.

The Kaiser Foundation posted a fact sheet and map with projected exhaustion dates based on current federal funding ending:

Fact Sheet Current Status of State Planning for the Future of CHIP by Ed Praetorian on Scribd

#5 About 25 Percent on CHIP Have Serious Medical Needs 

Of the nearly 8.5 million children covered by CHIP, about two million have serious chronic conditions, according to the Modern Healthcare report.

According to the 2014 Kaiser Foundation study, The Impact of the Children’s Health Insurance Program: What Does the Research Tell Us?, for children with special health care needs, CHIP covers physical, occupational and speech and language therapies, without limits in many states.

Review of studies led the Foundation to conclude that there is also enough evidence to suggest CHIP increases their short- and long-term educational attainment:

These improvements in access and care appear to lay the foundation for gains in school performance and educational attainment, which, in turn, hold promise for children’s long-term health and economic well-being, and for economic productivity at the societal level. The evidence is strong that improving coverage through CHIP and Medicaid has contributed to meaningful gains in access to care and the quality of care for low-income children. Further, studies that find an impact of CHIP and Medicaid on children’s health show a positive impact, suggesting that the programs advance the end goal of coverage, better health.”

Update October 2, 2017: The Senate Committee on Finance will mark up the Keep Kids’ Insurance Dependable and Secure (KIDS) Act of 2017.

About the author

Andrea Fox

Andrea Fox

Andrea Fox is Editor of EfficientGov.com and Senior Editor at Praetorian Digital. She is based in Massachusetts.