In what may be a hopelessly quixotic effort, supporters of the federal Children's Health Insurance Program are trying to persuade Congress to renew its funding almost a year in advance — and in a lame-duck session. Nevertheless, lawmakers ought to heed that call. The program plugs a troubling gap between Medicaid and the Affordable Care Act's subsidized plans, and states need to know whether they can count on federal funding or whether they will have to spend far more dollars of their own.
Insuring kids isn't just an act of kindness; it's an investment in a better-educated, healthier and more productive population. That's why CHIP enjoyed strong bipartisan support when it was created in 1997 to provide coverage for children whose families earned too much to qualify for Medicaid but not enough to afford private policies. Since then, CHIP has helped cut the uninsurance rate for children in half. The program now protects more than 10 million children in low- and moderate-income families, including nearly 800,000 in California. The federal government also pays a larger share of the medical expenses than it does in Medicaid — in California, it's 65%, compared with 50% for Medi-Cal. That share will increase to 88% in October 2015.
Here's the problem. While the 2010 Affordable Care Act extended CHIP for nine years, it provided money only through September 2015. States are now drawing up budgets for the next fiscal year, which typically runs through June 2016. Without federal matching dollars, they'll be hard-pressed to continue the program without cutting the benefits provided, the number of children covered or the payments to doctors and hospitals, which in California are already dangerously low.
The Affordable Care Act tried to eliminate the need for CHIP by making Medicaid available to more poor families while providing subsidies for private insurance for low- and moderate-income Americans. But half of the states have chosen not to expand their Medicaid programs. And a poorly written provision in the Affordable Care Act renders families ineligible for subsidized policies if either parent can sign up for an employer-sponsored plan, even if the plan's premiums for family coverage are unaffordable. That glitch should have been fixed by now, but Congress has been so polarized on Obamacare, it's been incapable of doing so. Meanwhile, the health plans sold through the state exchanges aren't as focused on children's health as CHIP and Medicaid are. So while it may make sense to phase out CHIP someday, that day is still years away.
Sadly, chances are slim that Congress will act on CHIP this year. Not only is the program funded through much of next year, but its popularity among Democrats makes it an attractive bargaining chip for Republicans to use to extract concessions on other funding disputes. And if the November elections give the GOP control over both houses of Congress, Republicans will be even more reluctant to act on CHIP until the new Congress is seated. All the same, states should not be left to guess about such an important program, with such major ramifications for their budgets. Congress should renew the funding for CHIP as soon as possible.