Future funding for CHIP in limbo after yet another patch

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A critical government program that provides healthcare coverage to 9 million low-income children received yet another patch to help stretch it out a few more months—with no long-term fix in sight.

Congress passed short-term legislation Thursday night that includes $2.85 billion to help fund the program, known as CHIP, through the end of March. The measure will help cover the estimated 1.9 million children across 24 states and Washington, DC, that stood to lose coverage for care such as doctors visits and hospitalizations in January as states have dipped into reserve funds. But the temporary relief still leaves CHIP and families that rely on it in a state of uncertainty.

“You can’t run an insurance program this way,” said Sara Rosenbaum, a professor at the Milken Institute School of Public Health at George Washington University. Lawmakers are forcing health officials who run the program “to go month to month.”

Funding for the Children’s Health Insurance Program lapsed at the end of September when lawmakers couldn’t reach agreement on a five-year reauthorization of the program. They’ve since failed to come up with a solution and instead passed short-term fixes—even though CHIP is one of the few programs that enjoys bipartisan support. Both Republicans and Democrats have disagreed on how to pay for a full reauthorization.

“We share a commitment to extend full funding for CHIP as soon as possible,” Senate Finance Committee Chairman Orrin Hatch, a Republican, and Senator Ron Wyden, the top Democrat on the committee, said in a joint statement.

The spending legislation passed Thursday is part of a last-ditch proposal that keeps the government open through January 19 while a longer-term budget solution is worked out. Both the House and Senate approved the spending measure before government-wide funding expired Friday.

CHIP, created in 1997, is a shared federal-state program for children of parents who can’t afford private insurance but make too much to qualify for the Medicaid government program for the poor. States have broad discretion in setting eligibility and have the option to cover pregnant women as well.

Funding for CHIP—which also covers dental care and prescriptions, among other services—amounts to almost $16 billion, with more than 90 percent coming from the federal government.

Even with passage of another patch, the limbo is hard on families. “It’s a pretty bad Christmas or holiday present for a lot of families,” said Diane Rowland, executive vice president of the Kaiser Family Foundation, a bipartisan nonprofit focused on national health issues. “You can predict that there will be relief that the funding has been extended, but it will be combined with a lot of anxiety.”

As for states that can’t plan ahead, “this is creating an administrative nightmare,” Rowland said. States have to start preparing for a possible shutdown of the program well before the day comes when they run out of money.

“This whole situation is causing chaos,” said Cathy Caldwell, director of the bureau of Children’s Health Insurance with the Alabama department of public health. “We are causing confusion to families, stress and turmoil.” Alabama health officials were forced to warn on December 15 they would stop taking new enrollees on New Year’s Day and that the 84,000 children currently in the program could lose coverage February 1.

Democrats have opposed a House GOP proposal to reauthorize CHIP for five years because it would be paid for by taking money from a fund set up under Obamacare to invest in prevention efforts. Bipartisan talks with the Senate and the White House on other funding offsets are “well down the road,” said House Minority Leader Nancy Pelosi, a California Democrat.

Bloomberg News