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An Uncertain Future for CHIP

Just before Christmas, Congress voted to temporarily keep funding the Children’s Health Insurance Program (CHIP), the federally and state funded insurance program for 8.9 million children in the United States. Children enrolled in CHIP have families that earn too much to be eligible for Medicaid, but do not have the ability to obtain private insurance. Insurance under CHIP is either free or available at a reduced cost.

States are responsible for the administration of CHIP, using state funds in conjunction with federal dollars and are able to operate the program either separate from or as an extension of Medicaid. Without adequate federal funding, however, CHIP would not be able to support all children in need.

With the December 21st vote by Congress to allocate $2.85 billion to CHIP, the program should be safe until March of this new year. When states were notified of the extension of the program, they breathed a sigh of relief knowing they wouldn’t have to send out letters over Christmas notifying needy families that their health insurance would be cut. Even with the extension, it doesn’t guarantee that every state will have enough to keep everyone enrolled until March. As part of the agreement, Congress also authorized the Centers for Medicare and Medicaid Services (CMS) to grant more funds to the neediest states.

While most states were happy to have a safety for the next few months, the question of how much time the program truly has is hanging over them. The truth is that no one knows what might happen to CHIP. If the government does away with CHIP altogether, some states may have the option to transition qualifying families to Medicaid, while others may not be able to offer relief to families with children in need.

For more information on the difference between CHIP and Medicare, please see this useful fact sheet from The Catalyst Center.