What’s Next for CHIP?
The Children’s Health Insurance Program (CHIP) offers a critical health insurance pathway for children living in families with modest means. These families’ incomes exceed the basic Medicaid eligibility standard for children but they lack access to employer insurance for their children, either because none is offered or because of a phenomenon known as the “family glitch," which bars working parents with affordable employer coverage for themselves from getting marketplace subsidies for their children.
CHIP fills these gaps, reaching nearly 9 million children. And because of its popularity, as well as a streamlined enrollment process built into the original law in 1997 and expanded under Affordable Care Act, CHIP has had a remarkable impact on children’s access to health insurance. By 2016, just 4 percent of U.S. children lacked health insurance. Yet Congress has still not reauthorized federal funding for this program.
Unlike Medicaid, which rests on a permanent federal funding authorization, CHIP funding authority must be periodically renewed. Administering CHIP is complex for states because they typically offer CHIP in two forms: coverage through Medicaid for children with incomes just above the Medicaid eligibility cutoff and a separate, companion program for children living in families with slightly higher incomes. As a result, there is a need to transition children between two sources of insurance coverage (and potentially separate managed care plans and provider networks) as family incomes fluctuate.