'Life or death' insurance program for kids could lose funding in matter of months

Funding lapsed on Sept. 30 and has not been reauthorized by Congress.

ByABC News
December 15, 2017, 3:10 PM

— -- Comedian Jimmy Kimmel brought his 7-month-old son on stage for his monologue Monday night to draw attention to the de-funding of a "life or death" program that helps America's sick kids.

Kimmel first spoke about his son's heart condition after he was born to call attention to the importance of the Affordable Care Act, but Monday night's message was about a national program that hasn’t been center stage. The Children’s Health Insurance Program, or CHIP, provides health insurance for a huge segment of the American children, but it lost federal funding on Sept. 30. Congress has yet to reauthorize its funding, meaning that some of the families who depend on it could be cut off soon.

Kimmel blasted Congress for letting CHIP run out when so many Americans depend on it.

“Now CHIP has become a bargaining chip. It's on the back burner while they work out the new tax plans,” Kimmel said on his show. “Parents of children with cancer, diabetes and heart problems are about to get letters saying their coverage could be cut off next month. Merry Christmas, right?"

Kimmel added, “This is literally a life-and-death program for American kids.”

Despite its importance, CHIP is not exactly a household acronym. But Dr. Lee Beers, past president of the D.C. chapter of the American Academy of Pediatrics, said the program is very important.

“In the scheme of our national budget, this is a very small piece,” Beers told ABC News. “But it is a small piece that has a tremendous impact on the lives and health of children.”

Ahead, here is what you need to know about the program.

What is CHIP?

CHIP is a program that funds health insurance for the children of working mothers (and pregnant mothers) who make too much money to be covered by Medicaid but earn too little to afford other insurance coverage. It was passed in 1997 under the Clinton administration and has enjoyed bipartisan support since its inception. In 2016, it covered 8.9 million children and pregnant mothers, according to government figures.

Why are people talking about CHIP?

Funding lapsed on Sept. 30 and has not been reauthorized by Congress; this is the longest lapse in funding in the program's history. Many states, including Virginia and Colorado, have had to notify residents that their insurance will be cut off soon, and that they should make contingency plans.

How much does CHIP cost taxpayers?

An analysis by the Kaiser Family Foundation found that government contributions to CHIP totaled about $15.6 billion in 2016. By contrast, Medicare and Medicaid combined cost about $1.24 trillion –- about 80 times more, according to data from the Centers for Medicare and Medicaid Services (CMS).

When analyzed by cost per beneficiary, CHIP costs about $1,750 per child or pregnant mother per year, while Medicare costs about $12,000 per person per year, according to CMS data.

What happens to women and children using CHIP if it isn’t renewed?

Most states expect to run out of funds in one to three months. Families that lose insurance have the option of buying individual insurance, which is prohibitively expensive for many of them. Access to the individual insurance marketplace has been restricted by legislative changes enacted by Congress.

If mothers obtain steady employment, they can sometimes get health insurance from their employer. The other option is to not buy any insurance and to hope that uncovered children do not require medical care. If a child does need expensive care, however, the out-of-pocket costs could be very high.

A graphic showing the 16 states that project exhaustion of federal CHIP funds before the end of January 2018.
Kaiser Family Foundation

Why does CHIP matter?

It is crucial that children and pregnant mothers of all income levels be able to access medical care to stay healthy and prevent future illness. If CHIP doesn't receive the funding it needs, it could have serious consequences for working families, Beers said.

“In the U.S., children are insured at historically high rates, and CHIP funding is an important piece of that,” Beers said. “These families are facing a lot of uncertainty about their children’s health care coverage. Imagine you didn’t know what’s going to happen to your child’s insurance in one month. These are working families that don’t have any other options.”

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