What’s Happening With CHIP?
In September 2017, Congress failed to reauthorize funding for the Children’s Health Insurance Program (CHIP), a program that has provided prescriptions, checkups and hospital services for low- to moderate-income children for 20 years. In November, the House of Representatives passed legislation reauthorizing the program that covers approximately 9 million children and pregnant women. However, the Senate has stalled on voting on the bill until a spending bill is presented at the end of the year, keeping the program in limbo.
What is CHIP?
CHIP provides low-cost health coverage to children whose families do not qualify for coverage under Medicaid. In some states, it also provides coverage to pregnant women. States control the CHIP program, which usually works closely with the Medicaid program. CHIP covers routine examinations, immunizations, doctor visits, prescriptions, dental, vision, inpatient and outpatient care as well as laboratory fees, X-rays and emergency services. Routine visits are free under CHIP, but other services may require a co-payment. Each state determines who is eligible for CHIP along with the amount of people’s co-payments, although no state can require enrollees to pay more than 5 percent of their household income each year.
End of Funding
Each state funds its own CHIP program but also gets federal matching. The federal government stopped funding the CHIP program in October 2017. The House bill passed in early November would return funding to community health centers and extend the program for an additional five years. But Democrats say that the bill would pay for the program using money from a preventive care fund and that it would require Medicare-means-testing as a way to partially pay for the program. The preventive care fund, established under the Affordable Care Act (ACA), pays for immunizations and research designed to prevent Alzheimer’s and diabetes. Since Congress couldn’t agree on how to fund CHIP, the program remains in limbo, and several states are in dire need of federal funding.
State Funding
Most states have funding available to carry CHIP to the end of the year, when the Senate will review the bill, and some states have funding to keep the program running well into 2018. However, other states are facing the loss of the program if Congress does not renew funding soon. In most cases, bills are passed in one chamber and immediately sent to the other, but there seems to be no indication that the Senate intends to reauthorize the program. Without renewed federal CHIP funding, it’s expected that about 600,000 children in America would lose their health insurance by January.
Possible Chaos
States whose funding is almost depleted for CHIP have begun sending letters to families to let them know their children may no longer have coverage. Congress indicated that continuing resolution may be used to reauthorize funding, but that decision had to be made by December 8. On Thursday, December 7, the House and Senate did pass a continuous resolution to keep the government operating until December 22, but a decision must still be made on how CHIP will be funded in the future.
Experts say that many families who depend on CHIP are unaware that their coverage is in danger and will not be aware of the problem until they receive letters indicating that coverage could end. Arizona, California, Minnesota, Ohio, Oregon and the District of Columbia will run out of money for the program by December 31 and at least six other states plan to take action to address funding loss. Due to Hurricane Harvey, Texas requested permission to waive co-payments and enrollment fees for the program in counties that were considered disaster areas. This means less money is coming into the program and could cause Texas to shut down the program even before the end of the year without federal intervention.
Because some states operate CHIP as a separate program, they would have no option but to shut it down if federal funding disappears. West Virginia has already voted to end the program on February 28 if Congress does not act because their funding will be gone by March.
Extension of Medicaid
Some states, including Maryland and the District of Columbia, treated CHIP as an extension of Medicaid. This means they will be required to keep the program going regardless of what Congress decides. The District of Columbia will need to come up with $12.5 million to cover the children who are enrolled in the program if they don’t get federal funds.
Options Available
The Centers for Medicare and Medicaid Services (CMS) notified state officials of their options if the CHIP fund runs out by the end of the year. States may determine that some children in the CHIP program are now eligible for Medicaid while others may find coverage through the ACA marketplace. Doctors say that parents who lose coverage under CHIP may delay bringing children in for care until they are gravely ill or require emergency treatment. Pediatrics is primarily preventive care, which is completed during routine visits. If children do not have insurance coverage, parents may choose not to bring them in for routine care, leading to costlier and more life-threatening problems later.
Increased Participation Under ACA
Statistics show that CHIP has lowered the rate of uninsured children to 4.5 percent and the program has been reauthorized several times. The federal government provides 88 percent the cost of CHIP. However, Congress is now struggling to determine how the program will be funded going forward. CHIP costs the federal government $15 billion and President Trump’s budget plan not only cut billions from CHIP, but it also limited eligibility in regard to federal matching funds.
The issue in Congress is not whether CHIP is a good program. Most agree that it’s beneficial and helps children get the healthcare they need. The issue is deciding how to fund the program.
Senator Orrin Hatch, who was one of the authors of the original CHIP legislation in 1997, is working to find a bipartisan solution to the funding issue. Many in the healthcare industry are frustrated at the inaction of Congress considering most agree that CHIP is a beneficial program. Supporters claim that it’s a core program that many low-income families depend on, and it has been widely credited as a success.
When Congress failed to reinstate funding in September, CMS was able to extend funding for several states with emergency funds and has used about $542 million in surplus funding to keep the programs operational. However, CMS says it will be unable to continue much longer and is urging Congress to act.
