CHIP covered healthcare for 9 million kids. What happens now that it's expired?

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Myles Ma, CPFCSenior ReporterMyles Ma, CPFC, is a senior reporter and certified personal finance counselor at Policygenius, where he covers insurance and personal finance. His expertise has been featured in The Washington Post, PBS, CNBC, CBS News, USA Today, HuffPost, Salon, Inc. Magazine, MarketWatch, and elsewhere.

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The Children’s Health Insurance Program (CHIP) is credited with helping lower the rate of uninsured children from 14.5% in 1997, when it was signed, to 4.5% in 2015. It provides low-cost health insurance to about 9 million children who aren’t eligible for Medicaid, but whose family can’t afford private coverage.

Healthcare for children might seem like something Congress could agree on, despite a huge decline in their ability to do anything in the 20 years since CHIP was passed. But Congress failed to renew funding for the program by the end of September, putting the program, and the children it covers, at risk.

Sidetracked by repeal & replace

The Republican-led Congress ran out of time to reauthorize CHIP by Sept. 30 while debating the latest in several efforts to repeal and replace the Affordable Care Act, the Washington Post reported. While states pay into CHIP and can keep the program going for a limited time, most of the funding comes from the federal government.

Without action from Congress, every state will run out of CHIP money by September 2018, with most going dry in March, and some running out of money even earlier than that, according to a government report. CHIP funding is even more urgent because of instability in health insurance markets, in part caused by uncertainty over the future of Obamacare.

Without federal funding, states may have to decide whether or not to end CHIP. The federal government was projected to spend $17.4 billion on CHIP in 2018. There’s about $4.2 billion in unspent money leftover from this year. If the federal source of funds is cut off, states will have to figure out a way to make up the shortfall.

Other options for families?

According to federal estimates, some of the 9 million children CHIP ensures could qualify for employer-sponsored insurance or coverage under Affordable Care Act exchanges. But repeated repeal attempts and the Trump Administration’s efforts to undermine the exchanges by cutting advertising money and reducing the signup window may make it difficult for many families to learn about their options.

While CHIP benefits vary in each state, they all provide coverage for:

  • Routine check-ups

  • Immunizations

  • Doctor visits

  • Prescriptions

  • Dental and vision care

  • Inpatient and outpatient hospital care

  • Laboratory and X-ray services

  • Emergency services

Routine doctor and dental visits are free, while other services may require copayments. Some states charge a monthly premium as well.

While costs vary from state to state, families don’t pay more than 5% of their annual income.

Senators Edward Kennedy, a Democrat from Massachusetts, and Orrin G. Hatch, a Republican of Utah, led the effort to pass CHIP 20 years ago. Kennedy patterned CHIP on a program passed in Massachusetts in 1996. President Bill Clinton signed it into law a year later.

Congress has reauthorized CHIP multiple times since, most recently in 2015. Diane Rowland, executive vice president of Kaiser Family Foundation, told ABC News that states are still optimistic Congress will act. However, ten states, including Arizona, Minnesota, North Carolina, and the District of Columbia are expected to run out of CHIP funds by the end of 2017, so time is already running short for many children who depend on CHIP coverage.

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