What to know about the Children’s Health Insurance Program

There has been a lot of talk lately about the need for Congress to fund the Children’s Health Insurance Program (CHIP). But what is CHIP, and why is it important? Here’s what is important to know.

 

What is the Children’s Health Insurance Program?

The Children’s Health Insurance Program, known as CHIP, is a federal-state partnership program that provides health insurance for children from low-income families. The program was created in 1997 with strong bipartisan support. Federal funding for CHIP was reauthorized in 2009 and again in 2015. The 2015 reauthorization provided federal funding for CHIP through September 30, 2017.

 

Who does CHIP cover?

CHIP provides health insurance coverage for low-income uninsured children. Children eligible for CHIP are from households that make too much money to be eligible for Medicaid but not enough to purchase private insurance. It’s said that CHIP “stands on the shoulders of Medicaid” to fill that gap. Across the United States, CHIP covers almost 9 million children, including around 55,000 children in Nebraska. Along with Medicaid and private insurance coverage, CHIP has greatly contributed to the fact that 95 percent of children in the United States are insured.

 

What kinds of services does CHIP cover?

States have flexibility in how they structure their CHIP programs. Nebraska has structured its program so that children enrolled in CHIP receive the same benefits package as children enrolled in Medicaid. This means that they have access to a robust array of health care services, including inpatient and outpatient treatments, childhood screenings, and medications.

 

What’s going on with CHIP funding?

Federal funding for CHIP expired on September 30 of this year. Traditionally, CHIP has been seen as a piece of “must-pass” legislation, meaning that it is a top priority for Congress. It has also traditionally received bipartisan support. This year, Congress let funding for the program lapse, arguing about how to pay for the program and prioritizing attempts to repeal the Affordable Care Act and tax cuts instead of kids’ health coverage.

It has now been over 100 days since the program’s funding expired, and health insurance coverage for 9 million children hangs in the balance. States have turned to using reserve funds to continue their programs, but a long-term funding fix is needed.

The continuing resolution passed by Congress on December 22 included a small amount of money for CHIP, however, that money is not enough for states to continue CHIP programs very long or to have certainty in budgeting for their programs for the upcoming year and beyond. Some states will run out of money for CHIP in the next week and a half. In Nebraska, money for CHIP will run out in March of this year without reauthorization.

Because states have different ways of structuring their CHIP programs, without reauthorization, some states will freeze enrollment in their programs or limit the number of children that can enroll, resulting in more children becoming uninsured. Other states, like Nebraska, are required to continue covering children enrolled in CHIP under their Medicaid programs. While it is a relief that these children can continue receiving coverage, the state must make up the lack of federal CHIP funding with state dollars.

Last Friday, the nonpartisan Congressional Budget Office and Joint Committee on Taxation put out a revised, much lower estimate of how much it would cost to reauthorize CHIP for five years. The new estimate is that it will only cost $800 million (down from the original $8.3 billion) for five years. Because of the lower estimate, Congress should find it much easier to to figure out a way to pay for this program.  

Ultimately, as Congress gets back to work in the new year, funding CHIP must be a priority.

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