How Will Funding Affect the Children’s Health Insurance Program in 2018?

Federal funding for the Children’s Health Insurance Program (CHIP), which covered 8.9 million children in 2016, expired on September 30, forcing states and lawmakers to develop and pass new legislation to continue funding the bipartisan program.

CHIP helps lower- and middle-income families who earn too much to be eligible for Medicaid. It also covers 370,000 pregnant women a year. Like Medicaid, CHIP is traditionally paid for by state and federal funding, but the federal government covers most of the cost.

According to Kaiser Family Foundation, nearly all states assumed the federal funding would continue and included it in their 2018 budgets. Ten states with the most urgent need, including California and Arizona, have CHIP programs that will run out of money by the end of 2017. Other states are in danger of running out of money by summer 2018.

With federal funding stalled, some states such as Utah and Minnesota have instituted a back-up plan to tap unused state or federal funds to continue the program or shift children to other government insurance programs, such as Medicaid. If federal funding does not continue, states on the brink of running out of funding plan to freeze enrollment in their CHIP programs or discontinue coverage.

The Senate Finance Committee and House Energy and Commerce Committee have proposed a bill that would extend program funding for five years, then over two years, gradually phase down the 23 percent funding increase provided by the Affordable Care Act.

Sources: Kaiser Health News, October 4, 2017; NPR, October 3, 2017; Politico, October 2, 2017.

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