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Will Federal CHIP Coverage Continue For California Kids?

zherun / Flickr

zherun / Flickr

Alla Moraru of Sacramento says she doesn’t know how she would keep her four children covered without the federally subsidized Children’s Health Insurance Program.

When her husband lost his job in February, they rushed to enroll in CHIP, a joint state-federal safety net for families who make too much to qualify for Medicaid but not enough to buy private insurance.

A month later, doctors found a tumor in her two-year-old son’s cheekbone. Fortunately, her CHIP plan has covered the brunt of his surgeries and follow-up care.

“If we move we don’t know if we’re going to get health coverage in another state,” Moraru says. “So we’re just holding on and staying here in parents house just because we have medical here, and we’re afraid to just leave it.”

But the federal government’s failure to renew funding for CHIP this year is making Moraru and other parents nervous. About two million California children get check-ups, vaccinations, emergency visits and other benefits through the program, and available federal funding will dry up by the end of the year if Congress doesn’t take action.

California receives roughly $2.7 billion federal dollars for CHIP each year, which covers roughly 88 percent of the program’s cost. The rest comes from the state’s Medicaid budget.

Former presidential candidate Hillary Clinton emphasized the need for CHIP in her Monday night speech at UC Davis’ Mondavi Center. 

"Many states are getting ready to send out notices that will basically tell parents that their kid’s coverage may be ending. I can’t even imagine the fear and worry in the families of those 9 million children."

She also urged the audience to call their legislators and ask them to keep CHIP going.

"We’ve got to fight to hold onto the gains we‘ve made against the mean-spirited efforts to turn the clock back when it comes to caring for our children."

The Affordable Care Act mandates that states maintain their CHIP programs through 2019, even though federal funding was only appropriated through 2017. So if a CHIP funding bill doesn’t pass, California will need to reach into its general fund.

“And we would have to do that because if we didn’t, we would lose all Medicaid funding completely,” says Esi Hutchful, state policy fellow with the California Budget and Policy Center. “And that’s very much not a position California wants to be in.”

Hutchful says some of the proposals floating around Congress would fund the CHIP program, but would offset the costs by pulling from Medicaid or Medicare.

They’ll also likely bring down the federal reimbursement rate for CHIP, which got a 23-percentage-point boost in 2015. For California, the 88 percent match would go down to 65 percent.

Mayra Alvarez of The Children’s Partnership, a Los Angeles-based nonprofit, says the last time there was a CHIP funding delay was in 2009. California was also experiencing a budget shortfall due to the recession.

“Previously when federal CHIP dollars were delayed, California was forced to impose freezes on enrollment. We hope it doesn’t get to that point.”

Alvarez urges the federal government to authorize CHIP for a full five years, instead of for just two years as they did in 2015.

She says the uncertainty around CHIP could lead families to distrust the program going forward.

“All year they’re been hearing that Congress is going to take away coverage, that their Medicaid won’t be there, that their CHIP program won’t be there,” she says. “Those rumors, those assumptions that they’re making, it has real consequences, and it will impact a family’s decision to enroll in coverage. We’re fearful that they’ll think the worst and they won’t sign their kids up for coverage.”

Both the Senate and the House have drafted bills to reauthorize CHIP funding.

Corrected on October 10, 2017

Due to incorrect information from a source, a previous version of this post said the last CHIP funding delay was in 2007.


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