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Do Right by States and Extend Children’s Health Funding Soon

The Children’s Health Insurance Program (CHIP), which along with Medicaid has played a central role in cutting the number of uninsured children to a historic low, has no new federal funding starting in October.  Congress should act soon to extend CHIP — for example, by attaching a funding extension to must-pass legislation in March to avert scheduled cuts in Medicare payments to physicians.

Waiting until later in the year to fund CHIP or pursuing harmful program changes to it would make it unnecessarily difficult for states to administer their CHIP programs and risks disrupting coverage for children.

Here’s why:  State legislative sessions are already entering the homestretch; Virginia adjourned Saturday, seven more states will end by April 1, and 13 others by May 1.  This means states are making decisions now about their budgets for fiscal year 2016, which in most states begins on July 1.  As Governors Steve Beshear (D-KY) and Bill Haslam (R-TN) wrote Congress recently on behalf of the National Governors Association, “certainty of [CHIP] funding in the near-term is needed so that states may appropriately budget and plan for their upcoming fiscal years.”

The longer Congress waits to fund CHIP, the greater the unnecessary burden it will place on states.  In a recent survey, many state CHIP directors said that continued delay would force them to develop contingency plans for possible measures like moving enrollees out of state CHIP programs if federal funding runs out, updating eligibility systems to allow for the termination of coverage, and renegotiating or ending contracts with managed care plans providing CHIP coverage.

Also, if Congress pursues controversial changes that could adversely affect the program and the children who rely on it, that likely would significantly delay — and could derail — CHIP funding legislation.  Draft legislation from Senate Finance Committee Chairman Orrin Hatch (R-UT) and House Energy and Commerce Committee Chairman Fred Upton (R-MI) is a prime example.  As we’ve explained, it would likely cause some CHIP children to become uninsured, shift large costs to states, and make the program harder for eligible children to enroll in.

Congress should instead quickly extend CHIP funding for another four years and largely continue existing policies, as bills introduced by Senator Sherrod Brown (D-OH) and Representative Gene Green (D-TX) and as the President’s 2016 budget would do.