Study: 2.7M children could lose CHIP benefits

As many as 2.7 million children could lose health coverage or benefits next year if Congress does not renew the Children’s Health Insurance Program (CHIP), according to a study by the conservative American Action Forum

CHIP is a $13-billion-a-year program that provides insurance to about 8.1 million children nationwide, largely paid for by the federal government. But unless the program is reauthorized, states’ share of that funding will begin to run dry in October 2015. 

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States will receive their last round of federal dollars on Oct. 1. 

Democrats in both the House and Senate have pushed bills to renew CHIP, but some lawmakers and policy experts have argued that the program is unnecessary under ObamaCare, which created more opportunities for low-income families to secure health coverage.

About 6.4 million children would gain access to insurance under the healthcare law, according to a study last week by American Action Forum. But nearly 2 million children wouldn’t qualify for additional help under ObamaCare because they fall into what the think tank describes as “a family glitch.” 

A child would be deemed ineligible for CHIP if their parent’s employer offers low-cost health coverage — even if their family can’t afford that extra coverage.

That means that “the entire family is disqualified for premium tax credits,” according to the study. 

Another 460,000 children would stand to lose health benefits if they are enrolled in a Medicaid program instead of CHIP, which receives a smaller share of federal funding.

A group of health policy analysts that advises Congress on insurance for low-income families — the Medicaid and CHIP Payment and Access Committee — met Friday to discuss the dire state of the program's funding. 

About 40 percent of all CHIP funding next year will go toward programs that are set to expire after the last round of federal dollars, including benefits for pregnant women and unborn children. States could be left on the hook for that leftover spending, health policy analyst Chris Peterson cautioned during the meeting. 

Many states have begun to enroll children in low-income insurance plans under Medicaid, instead of CHIP, to address the shortfall. But that transition costs states about 43 percent more without the federal matching funds. 

Peterson’s report also warned that some children moving to the exchange could have a “less comprehensive set of covered benefits.” 

Since CHIP was created in 1997, it has helped cut the rate of uninsured children in half, to about 7 percent last year. 

Douglas Holtz-Eakin, the president of the American Action Forum, urged senators last week to reauthorize the CHIP program — but to consider changes.

He said simply reauthorizing CHIP is “unwise” because of how ObamaCare has altered the healthcare landscape.

Sen. Jay RockefellerJohn (Jay) Davison RockefellerBottom Line World Health Day: It's time to fight preventable disease Lobbying World MORE (D-W.Va.), who authored a bill to reauthorize CHIP, called the program “a game-changer for millions of children."

The meeting last week was the Senate's first hearing this year on CHIP funding.