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House Bill to Extend Children’s Health Funding Would Ease Pressure on States

March 24, 2015 at 2:27 PM

The House is likely to vote this week on a bipartisan compromise to permanently fix Medicare’s flawed physician payment formula (SGR) and extend federal funding and current policy for the Children’s Health Insurance Program (CHIP) for two years.  The continued momentum for extending CHIP funding quickly and cleanly is important not only for the millions of children who rely on the program for health coverage, but also for states and their budgets.

Six state legislative sessions have already ended, and Kentucky will become the seventh when it adjourns today.  So while lawmakers have yet to make new federal funding for CHIP available starting in October, states are passing budgets for the next fiscal year — which in most states begin on July 1 — nowRepublican and Democratic governors alike have called for CHIP funding certainty and quick extension.

Each week that passes without congressional action on CHIP places states in a tougher position.  For example, a recent survey of state CHIP directors found that if uncertainty about the program’s funding persists, states will have to pursue contingency plans that reflect the risk that no new federal CHIP funding will be available, such as how to move kids out of CHIP coverage and how to inform families that coverage could end.

To be sure, it would be better if the House bill extended federal CHIP funding for four years in order to ensure longer-term stability for the program and the children it serves (and robust efforts are expected to secure that in the Senate once the House bill is passed).  Nevertheless, the House bill does right by states and kids in other critical aspects.  Most importantly, the House bill maintains program improvements that Congress made in 2009 and 2010, while leaving out proposals floated by House and Senate committee chairs last month that would likely cost many children their coverage while shifting costs to states.