Future of Health Insurance Program for 8.9 Million Children Uncertain

Congress must vote by Sept. 30 to ensure the future of federal funding for the Children’s Health Insurance Program, or CHIP. States are following this vote closely, as 8.9 million children per year are insured under CHIP.

The CHIP program began in 1997, providing federal matching funds to states to provide health coverage to children in families that don’t qualify for Medicaid, but who can't afford private insurance. CHIP gives states the option to create a separate CHIP program that supplements their Medicaid program, extend Medicaid to children at higher income levels with funding through CHIP, or some combination of the two. In 2017, 14 states run CHIP-funded Medicaid extensions, two states run exclusively separate programs and 34 states administer some combination of the two.

Children in the U.S. obtain health insurance through Medicaid (32 percent), CHIP (9 percent), military or veterans insurance (2 percent), or private insurance (54 percent). The Centers for Medicare and Medicaid Services reported 8.9 million children enrolled in CHIP and over 37 million children in Medicaid at some point during fiscal year 2016. There are over 3 million children without health insurance (5 percent) as last reported in 2015, a number that may increase if states lose federal CHIP funding.

The Enhanced Federal Medical Assistance Percentage, or eFMAPs, determines the federal payments to a state for Medicaid and CHIP and they vary from state to state. Since its creation, the federal match for CHIP was greater than the federal match for Medicaid. Under the ACA, federal minimum rates for CHIP increased by 23 percentage points in fiscal year 2016, raising the new minimum rate to 88 percent and the maximum to 100 percent. The increased CHIP matching rates also expire in September 2017 and must be reconsidered along with CHIP appropriations.

Under the law extending CHIP funding through Sept. 30, 2017, any leftover CHIP allotments can still be expended after Sept. 30, but are reduced by one-third. Most states will exhaust their fiscal year 2017 CHIP allotments by March 2018, according to the Medicaid and CHIP Payment and Access Commission. Without new federal funding for fiscal year 2018, it is doubtful states can continue to implement their CHIP programs.

For more information on CHIP, Medicaid and the uninsured rates for children in each state, download the spreadsheet below.

 

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