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As CHIP Funding Shortage Looms, States Are Increasingly Concerned

On September 30th, funding for the Children's Health Insurance Program (CHIP), which provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid. The program is bipartisan enactment from the late 1990s and covers over nine million children and pregnant women. But as Congress shows no sign of reauthorizing funding, states are going to run out of money to provide health insurance, and they are getting increasingly worried.

On Friday, December 1st, Utah posted a notice saying it would run out of CHIP funding by the end of January. Earlier last week, Colorado told families participating in CHIP that their coverage would probably end early next year. And other states, such as Arizona, California, Ohio, and Oregon, are nearing the end of their funding. Oregon Governor Kate Brown has ordered her state's health authority to continue funding CHIP out of the state coffers, and criticized Congress for failing to take action. State authorities across America are alarmed; if nothing is done, hundreds of thousands of residents in each state will lose coverage.

How did we arrive at this state of affairs? Well, Congress has to reauthorize CHIP periodically because it is a block grant program, meaning that meaning that states are provided with a set amount of federal dollars instead of an ongoing funding stream (as with Medicaid). Democrats and Republicans both agree that CHIP should be funded but they disagree on how to pay for it. Republicans want to pay for CHIP by charging higher Medicare premiums to wealthy seniors, shortening the grace period for marketplace enrollees who don’t pay their premiums and redirecting money away from the Affordable Care Act’s public health fund--essentially undermining the ACA, and the House passed a bill doing just that. Democrats oppose all this and just want the program reauthorized.

Even Texas, a state which had only reluctantly embraced measures to provide people with health insurance, asked the Centers for Medicare and Medicaid Services for $90 million in leftover funds so it can continue its CHIP program. The lack of funding is causing fear and chaos on the ground. And until recently, both Democrats and Republicans agreed on the program's importance. It’s largely because of CHIP that the rate of uninsured children has fallen to a record low of 4.5 percent. Under match rates boosted by the ACA, the federal government now provides 88 percent or more of every state’s CHIP costs.

But instead of reauthorizing health insurance for millions of children and pregnant women, congressional Republicans put all their efforts into trying to repeal the ACA and passing tax cuts for the very wealthy. Governor Brown called the situation "absurd and bizarre and unacceptable...Congress is neglecting our most vulnerable children."

The House and Senate should reauthorize funding for CHIP immediately. If Republicans in Congress can pass a $1.4 trillion tax cut, they can surely renew children's health insurance.

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