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Federal Funding for National Children’s Health Program Now at Risk

The clock is set to run out on the popular — and widely beneficial — CHIP program in just three days

kid swinging

While healthcare reform has been the recent focus in the nation’s capital, federal officials have failed to renew funding for the Children’s Health Insurance Program (CHIP), which insures working-class children — including more than a million in New Jersey.

The funding is set to expire in three days.

The Garden State, which has one of the nation’s most expansive efforts, has enough money to sustain the current benefits well into next spring, one review found. Several states could run out of dollars by the end of 2017 and more than two dozen will run dry by March.

But advocates for the program said the uncertainty still puts the system at risk — a fear that is only magnified by concern over federal proposals to reform the Affordable Care Act that could eliminate billions in Medicaid funding. Congress has also failed to extend certain federal funding — also due to expire by October 1 — for Federally Qualified Health Centers, which provide care for low-income patients of all ages, including nearly half a million New Jersey residents.

One in three kids covered

Together, Medicaid and CHIP cover one in three children nationwide, according to a report by State Health Value Strategies, a project of Princeton University’s Woodrow Wilson School of Public and International Affairs. The two programs have helped reduce the uninsured rate for those under 18 by more than two-thirds, to 4.8 percent.

“New Jersey is in a better place than many other states, but it’s still not a good place to be in because of the uncertainty,” explained Mary Coogan, vice president at Advocates for Children of New Jersey, which tracks children’s health and social welfare.

ACNJ also produces the annual Kids Count report, which found only 3.7 percent of Garden State youth are now uninsured; the healthier children are, the more likely they are to stay in school and succeed, ACNJ notes. Coogan said New Jersey has also made gains in enrolling children who were born here — and thus U.S. citizens — to undocumented parents, who may have been afraid to enroll their kids for fear of being deported.

“We would hate to see any of those efforts undone,” Coogan said, adding, “This is not time to be complacent, just because New Jersey is in a good place.”

Federally funded

Nationwide, the CHIP program costs nearly $14 million billion — more than two-thirds of which is paid by federal funds, traditionally granted to states on annual basis — and covers nearly 9 million children. In the last budget year (fiscal 2017), New Jersey spent close to $519 million to insure some 112,000 children, with $456 million from federal funds, according to state officials.

CHIP was created more than two decades ago in an effort to extend the reach of Medicaid, which covers many of the nation’s poorest children and adults, to reach working-class kids whose parents often had several jobs but lacked insurance coverage. In New Jersey, it was embraced by then Gov. Christie Whitman, a Republican, and has seen bipartisan support ever since.

(While it is funded independent of Medicaid, many states operate the programs together; in New Jersey the program started as KidCare and is now part of FamilyCare, the state’s Medicaid program.)

State Sen. Joseph Vitale (D-Middlesex), the longtime health committee chair and a lead architect of the KidCare program, called the program “extremely vital” to both kids and families. Numerous studies have shown that enrolling children in health insurance programs can help keep their parents healthier, and vice versa.

“It is a life-saving program that allows millions of Americans and kids all across New Jersey access to affordable health care,” Vitale said. “These members of Congress should imagine what it would be like to lose their coverage and access to the services from which they benefit. Children should not be used as pawns for political or deal-making purposes.”

Two weeks ago, a bipartisan team of U.S. Senators announced they had crafted a deal to extend federal funding for the CHIP program for five years; advocates welcomed that it would have provided longer-term funding and protected a 23 percent hike in the federal funding implemented in 2015 as part of the ACA. This change added some $110 million to New Jersey’s federal share in 2016, according to State Health Value Strategies; only seven states received more.

But there has been little movement on the proposal since, despite strong support from officials on both ends of the political spectrum, as some Senators feared the measure would become a vehicle for controversial and unrelated amendments. And leaders in the U.S. House announced Wednesday they were unlikely to take up the issue before the October 1 deadline, according to several news reports.

The ACA, or Obamacare, also included other protections for CHIP funding in states – like New Jersey – that chose to expand Medicaid under that law. Many of the parents who benefitted from this Medicaid expansion have children already covered under the CHIP program, advocates said. It also provided two years of funding for the program, set to end this month.

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