Extending the Children’s Health Insurance Program: High Stakes for Families and States.

Issue: Congress must decide whether to extend federal funding authority for the Children’s Health Insurance Program (CHIP), which ends September 30, 2017. CHIP operates much like Medicaid, providing federal matching payments for state program expenses, although CHIP’s funding rate is higher than the federal rate paid for traditional Medicaid and was further enhanced under the Affordable Care Act. States can use their CHIP funds to expand Medicaid, operate separate CHIP programs, or combine the two approaches. Today CHIP covers 8.4 million children and provides maternity coverage for approximately 370,000 women.

Goal: To examine the potential effects of ending federal CHIP funding.

Methods: Analysis of legislative and regulatory policy as well as evidence from the literature.

Findings and Conclusions: Without congressional action, CHIP funds will be virtually gone by summer 2018. The 4.7 million children who receive CHIP coverage through Medicaid will remain entitled to coverage through 2019, but only at normal Medicaid federal matching rates. Among the 3.7 million children enrolled in separate programs, an estimated 1.1 million could lose coverage entirely, while the rest could face reduced coverage and significantly higher out-of-pocket costs. Congress is facing key decisions, including whether to extend funding, if the ACA rate enhancement should continue, and potential changes to eligibility levels.