The 114-day wait is over: Congress renews CHIP funding



Myles Ma

Myles Ma

Senior Managing Editor

Myles Ma is a health care expert & personal finance writer for Policygenius. He edits the Easy Money newsletter.

Published January 22, 2018|2 min read

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The Senate finally approved funding for the Children's Health Insurance Program on Monday. Congress let funding for the program, which provides low-cost health insurance to about 9 million children, run out at the end of September. It took a government shutdown to get legislators to act. Lawmakers funded CHIP through Sept. 30, 2023 as part of an agreement to fund the government for three more weeks.

What is CHIP?

CHIP has been around since 1997. In its 20-year history, it's credited with helping lower the rate of uninsured children from 14.5% to 4.5% in 2015. It serves families who aren't eligible for Medicaid, but can't afford private coverage for their children. While benefits vary by state, it generally provides for routine checkups, immunizations, prescriptions, dental and vision care, hospital care, laboratory and X-ray services and emergency services.

Routine doctor and dental visits are free, while other services require copayments. Some states charge a monthly premium, but families generally don't pay more than 5% of their annual income for CHIP.

Why CHIP ran out of money

So why did Congress let funding lapse for so long? The short answer: Republicans were busy trying (and failing) to repeal former President Barack Obama's health care law, and then passing a tax cut that got rid of the law's requirement that everyone get health insurance or pay a penalty. In the mean time, the few times CHIP was put up for renewal, it was tied to bills Democrats widely opposed and refused to vote for.

While the federal government funds CHIP, the program is administered by the states. Until Monday, some state programs were at risk of running out of money. Connecticut closed enrollment to children on Dec. 23 until Congress provided short-term funding.

What happens now?

The bill passed Monday provides $21.5 billion in funding for CHIP this year, with increasing amounts in the following years. The Congressional Budget Office estimated that renewing CHIP would actually save the federal government $6 billion over the next 10 years because it help keep people off other government-provided health care like Medicaid and subsidized plans in the individual marketplace.

CHIP has usually received solid bipartisan support when its funding came up for renewal in the past, but given that 2017 was the worst year ever, it makes sense that even health coverage for kids somehow became contentious. Families would have had few options if funding ran out, but now they can relax. At least until 2023.

Image: Steve Debenport