The Fate of the Children’s Health Insurance Program: Can It Be Saved?

Tax reform, statutory spending caps, continuing resolutions and omnibus appropriations all contribute to the traditional year-end high drama called the legislative process. But what’s at risk of being overlooked in the fray is funding for the Children’s Health Insurance Program, or CHIP.

Created for the purpose of providing health coverage for vulnerable children in families that cannot afford private insurance coverage—but do not qualify for Medicaid—CHIP was crafted two decades ago by Senators Edward M. Kennedy (D-MA) and Orrin Hatch (R-UT) to help families be more self-sufficient and less dependent on financial assistance. Since then, CHIP has played an important role in providing insurance coverage and access to health care for millions of children in families with incomes just above Medicaid eligibility threshold.

An estimated 9 million children are insured through CHIP, and the program enjoys bipartisan support in Congress.

Unfortunately, Congress missed a September 30 deadline to extend CHIP, which is jointly funded by both states and the federal government. But even though several states are financially stable enough to keep their individual programs active for a few more months, five states and the District of Columbia may run out of money in late December.

Last week, in fact, Colorado became the first state to notify families that children who receive health insurance through CHIP are in danger of losing their coverage. Texas plans to notify families in January that the program could end soon, while officials in West Virginia voted to shut the program down in February if Congress fails to act.

What’s the hang-up? Money, of course. Congress can’t agree on how to pay for the $15 billion program.

In November, the House passed a bill to extend CHIP funding for five years. But the House bill is paid for, in part, by cuts to the Prevention and Public Health Fund. The problem is that the Fund makes up more than 12 percent of the Centers for Disease Control and Prevention (CDC) budget, including core public health programs that provide essential funds to help states keep communities healthy and safe, like immunization programs, cancer screenings, chronic disease prevention and other critically important programs.

But there’s a glimmer of hope—at least for the short-term. Over the weekend, the House appropriations committee released a two-week continuing resolution that would allow states to continue running CHIP in the absence of a formal reauthorization, at least through the end of the year. In the meantime, the Centers for Medicare and Medicaid Services is redistributing some unused CHIP grants to those states in greatest need.

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