Why We Need to Fund the Children’s Health Insurance Program (CHIP) Now!

By Carolyn Burstein
March 02, 2015

Funding for CHIP runs out at the end of this fiscal year (September 30, 2015) and without its renewal almost every state will be affected. This is because CHIP is a block grant program in which nearly all states have opted to participate. (The exception is Arizona, which left the program in Jan. 2014).

In an op-ed piece in the New York Times, Hillary Clinton and former Senate Republican leader Bill Frist remind us that more than four-fifths of state legislatures complete their budgets (some for the next two fiscal years) and end their sessions by the end of June —some like Virginia and Maryland by March or April. They must be operating on the assumption that renewed funding will be forthcoming, but given so many contingencies in the healthcare field, there is no certainty. We must assure that renewed funding does occur and our advocacy must start now.

Why is CHIP so important, now that the Affordable Care Act (ACA) has become law? A significant gap that exists in the ACA is the “Family Glitch.” As CBS News describes it, this prevents families from receiving subsidies if the employer of one of the adults is offered “affordable coverage.” “Affordable” is defined as less than 9.5% of household income for that adult alone, regardless of how many members may be in the family. For many families, CHIP may be the only viable option for insuring their children.

Perhaps now we can understand why the ACA extended authority for CHIP through 2019 (though no funding was provided beyond fiscal year 2015). Over the next several months there will be extensive debate about the continued need and funding for CHIP, expected to cost about $10 billion over four years. Forty governors have written to members of Congress urging quick action on reauthorizing CHIP. Indeed, CHIP has always had bipartisan support.

CHIP was first enacted in 1997 in response to the needs of millions of children who lacked health insurance. Senator Barbara Mikulski (D-MD) and Senator Orrin Hatch (R-UT) were both strong supporters of this legislation and still are. Sen. Hatch has said that continued funding for CHIP is “must-do” legislation and is one of three sponsors of a Republican discussion paper on the reauthorization of CHIP, and Sen. Mikulski is one of the early co-sponsors of S. 522, a Democratic bill introduced in the Senate on February 12.

As a compromise between Democrats and Republicans, CHIP began and continues life as a block grant program (rather than a new federal entitlement program), in which the federal government disburses funds to the states but gives them the flexibility to meet the needs of their own children and families.

When CHIP was reauthorized in 2009 (after stop-gap funding in 2007 and 2008), it contained provisions for improved health benefits such as pediatric dental care and better data collection. It gave new emphasis to quality measurements, and addressed the issue of shortfalls in state funding.

For the past 17 years, CHIP has been a reliable source of insurance coverage for kids whose families make too much to qualify for Medicaid, but too little to afford private health insurance. CHIP has achieved phenomenal results in reducing the number of uninsured children, so that today we can boast that 93% of America’s children have healthcare coverage, despite the increase in the number of children living in poverty in the last few years.

The Kaiser Family Foundation examined studies completed before mid-2014 on the impact of CHIP and Medicaid. The Foundation concluded that children from low-income families not only have better access to primary, specialist, dental and preventive care and fewer unmet health needs than uninsured kids, but also experience fewer avoidable hospitalizations. Most importantly, child mortality rates are significantly lower among the Medicaid/CHIP group. In addition, low-income parents have positive impressions of their children’s insurers.

With guaranteed dental coverage, children have access to oral health, which plays a significant role in a child’s development and overall wellbeing. “Poor oral health affects a child’s self-confidence, including a child’s willingness to speak, smile, and play, potentially impacting socialization and emotional health” according to Dr. Paul O. Walker, DDS in the February 5, 2015 issue of The Hill. Moreover, Dr. Walker says that CHIP patients who see a dentist prior to their fourth birthday require less dental work than those who do not, claiming that preventive care is indeed a valuable commodity. Finally, Dr. Walker maintains that such access to a dentist at an early age helps reduce costly emergency room visits, health complications and the long-term costs associated with serious gum disease.

It should be clear that the above-listed benefits of CHIP contribute to meaningful gains in access to care as well as to the quality of care for low-income children.

The Democratic bills submitted in the House and Senate include basic CHIP coverage as well as additional benefits for the more than 8 million children enrolled in CHIP, including:

  • Extending the CHIP contingency fund to protect states that may experience a funding shortfall and including the ACA’s 23% matching rate increase
  • Extending access to pediatric dental care
  • Extending and updating performance bonuses referred to as the “Performance Incentive Program”
  • Extending the Pediatric Quality Measures Program
  • Extending the CHIP obesity and quality demonstration projects
  • Extending outreach and offering enrollment grants for simplifying eligibility and its renewal
  • Encouraging the adoption of promising strategies and best practices
  • Extending the SNAP waiver authority for streamlined eligibility determinations

The Republican discussion paper submitted by Senators Orrin Hatch, Fred Upton (R-MI) and Joe Pitts (R-PA), almost two weeks after the Democrats submitted their bills, also calls for reauthorization of CHIP through 2019, but there are numerous differences in the content. We are hopeful that discussion and dialogue among Congressional members will reduce the disparities in the issues dividing the parties and that the welfare of children will be placed in the forefront of all discussions.

If bipartisan agreement is not reached and CHIP funding is not renewed, as many as two million children will lose their current coverage (Hillary-Frist op-ed). In the state of Texas alone, 335,000 youngsters would be affected (along with their families), according to the Dallas News.

Failure by Congress to act would have repercussions on the states. If each state attempted to resolve the issue of children’s health insurance, as some might try, it would put a huge dent in their state budgets.

Since CHIP, from its inception, has always been a bipartisan issue, let us work to achieve the type of compromises that legislators on both sides of the aisle can support. It is the task of NETWORK and its supporters to advocate for the most vulnerable members of our society, and none are more vulnerable than children. They and their families deserve to live in the dignity of knowing that healthcare is available when needed.

[This New York Times editorial includes more information about current CHIP proposals on the Hill.]

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