Advocates worry states that pull CHIP funding put program in jeopardy

The Affordable Care Act provision that shifts the costs for the Children's Health Insurance Program (CHIP) to the federal government has had the unintended consequence of encouraging states to spend their CHIP dollars elsewhere, according to The Hill.

Starting this year, the federal government will fully pay for CHIP in 11 states and the District of Columbia, and all states will pay no more than 12 percent of their CHIP costs. Previously, between 65 and 83 percent of CHIP had been covered by the federal government.

When the ACA's architects first proposed the federal funding increase for CHIP, groups like Families USA had hailed the idea as a win for children who received health coverage through the program, the article notes. The funding bump will free up as much as $6 billion over two years before it expires.

Yet rather than use their sudden CHIP funding surplus to expand the program, many states are instead opting to fill holes in their budgets, improve roadways or enact tax cuts, according to the article. Indiana, for example, is set to receive an extra $25 million, but won't expand CHIP; in California, Democratic Gov. Jerry Brown removed $381 million in funding from the program in his upcoming budget.

Advocates say such states are flouting the intent of the ACA, and they're worried that after the two-year federal funding increase expires, it will be a challenge for states to re-fund CHIP.

"At the end of the day, what it might mean is a reduction in children's health coverage," Shannon Cotsoradis, who leads Kansas Action for Children, told The Hill. "And I suspect we're not the only state in that boat."

Indeed, many advocates and officials have quietly been preparing for the possibility of CHIP's demise, FierceHealthPayer has reported. While some have suggested that children covered through CHIP could be moved to ACA plans, the latter often have very narrow networks and don't feature some of the generous coverage options CHIP has long provided its members.

To learn more:
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