Public Payers News

Children’s Health Insurance Program Funding Extended to 2017

By Vera Gruessner

- The federal government has key programs to help lower class American citizens obtain the healthcare coverage that they need. The Centers for Medicare & Medicaid Services (CMS) offers Medicaid coverage for those that have healthcare needs. Additionally, there is a federal program called the Children’s Health Insurance Program (CHIP) that helps ensure children around the nation have sufficient health insurance.

Medicare Access and CHIP Reauthorization Act

The Children’s Health Insurance Program is meant for families that do not qualify for Medicaid based on their income, but may not have enough to manage multiple insurance plans for their offspring, according to the Health Insurance Marketplace website.

Every state offers CHIP while working underneath the state’s Medicaid program. Among families looking to qualify for the Children’s Health Insurance Program, there are applications available on the Health Insurance Marketplace as well as the www.insurekidsnow.gov website.

CHIP offers important healthcare services for children around the country including doctor visits, yearly check-ups, immunization, emergency care, laboratory services, dental and vision coverage, prescriptions, and even inpatient care.

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  • On April 16 of this year, President Barack Obama signed into law the Medicare Access and CHIP Reauthorization Act. A very important part of this legislation is the two-year extension funding healthcare coverage for children enrolled in the Children’s Health Insurance Program.

    According to a summary of the legislation from First Focus, state CHIP allotments have their funding extended for two years and $19.3 billion is set aside for 2016 while $20.4 billion is allotted for the 2017 fiscal year.

    The year following the two-year extension will have funding reduced by one-third. There will be a carryover fund set aside fiscal year 2018.

    “A portion of the cost of the CHIP extension is paid for using a gimmick that reduces states’ available FY 2017 carryover funds in FY 2018. According to MACRA, any spending beyond the $5.7 billion CHIP baseline will be paid out of the FY 2017 carryover fund,” the First Focus summary explains.

    “Specifically, section 301 includes a ‘clawback’ provision that removes one-third of all CHIP carryover funding in FY 2018 from unspent FY 2017 state allotments and, instead, takes those funds from CHIP to be returned to the Federal Treasury. Although this provision lowers the CBO score for CHIP in FY 2016 and FY 2017, the clawback reduces available state CHIP funds and creates a funding hole in FY 2018 that Congress will need to address if CHIP is to continue to be funded through the end of the authorization period, which ends in FY 2019.”

    CHIP is set up to help provide pediatric-based treatment and children-specific healthcare services by offering pediatric networks and benefits meant specifically for adolescents. The US Census Bureau has found some significant benefits from the CHIP coverage program such as the fact that the number of uninsured children has decreased to only 6.2 percent nationwide.

    The Medicare Access and CHIP Reauthorization Act also provided $10 million toward the Childhood Obesity Demonstration project under the Affordable Care Act, which aims to curb obesity rates among low-income children with appropriate community opportunities.

    Other areas that the legislation also extended funding to are Family-to-Family Health Information Centers, which support community organizations that help families with disabled children or those who have special medical needs.

    The new legislation set aside $5 million annually for the next two years among Family-to-Family Health Information Centers. There are also legislative proposals that have come under scrutiny due to their potential harm to CHIP.

    “As health reform moves forward, we need to make sure children can keep their CHIP coverage and not be forced into untested private coverage,” Senator Jay Rockefeller (D-WV) said in a public statement. “The Congressional Budget Office has been very clear that replacing CHIP with private health coverage will lead some children to lose their health coverage altogether, which is harmful and intolerable. Health care reform should improve the coverage children have -- not take their coverage away.”

    “I have spent my entire career working to protect children and other vulnerable populations, and will keep fighting to protect CHIP as health care reform goes to the Senate floor, and then moves to conference with the House of Representatives. We must do all we can to shield children from harm. Always.”