ADEA Issue Update: Congress Funds the Children’s Health Insurance Program for Six More Years
On Jan. 22, President Trump signed a bill (specifically, a short-term continuing resolution [CR]) to keep the federal government open for three more weeks, through Feb. 8. The bill passed both chambers of Congress on that same day, after the government was shutdown for three days. The short-term CR also reauthorizes funding for the Children’s Health Insurance Program (CHIP) for six more years.
Historically, CHIP has received bipartisan support since it was created in 1997, and championed by Sens. Ted Kennedy (D-MA) and Orrin Hatch (R-UT). However, as a result of the current political climate in Washington, Congress failed to reauthorize funding for CHIP in a timely fashion, allowing funding for this critical program to lapse on Sept. 30, 2017.
What Is CHIP?
CHIP covers 8.9 million children across the United States. The situation over the last 115 days was most dire for the nearly 3.7 million children who receive their health insurance through their state's separate CHIP programs, rather than CHIP-funded Medicaid. A provision in the Affordable Care Act (ACA) stipulates that children who receive health insurance through CHIP-funded Medicaid cannot lose their insurance, even if that CHIP funding were to disappear.
What Does CHIP Cover?
CHIP benefits are different in each state; however, all states provide comprehensive coverage, including dental and vision care, routine check-ups, immunizations, doctor visits, prescriptions, inpatient and outpatient hospital care, laboratory and radiograph services, and emergency services. Routine “well child” doctor and dental visits are free under CHIP; however, there may be copayments for other services.
The Details of the CHIP Funding Reauthorization
The bill extends CHIP through federal fiscal year (FY) 2023, and required no offsets because of a new Congressional Budget Office score post-repeal of the ACA individual mandate via the tax reform bill. The current enhanced CHIP match rate of 23 percentage points continues without change for FY18 and FY19, and is then reduced by 11.5% in FY20 (i.e., the enhancement is cut in half). In FY21, states go back to CHIP’s regular match rate. Another important issue is the “maintenance of effort,” which requires states to continue income eligibility levels that were in place as of the ACA’s enactment date. This important provision, which ensures that kids have a stable source of coverage, remains.
 The ACA enhanced the CHIP federal matching rate, increasing the rate by 23 percentage points, thus bringing the average federal matching rate for CHIP to 93%.