In its June report to Congress, the Medicaid and Children's Health Insurance Program Payment and Access Commission has recommended extending federal CHIP funding for an additional two years through fiscal year 2017.
Under current law, the government will distribute final CHIP allotments to the states on Oct. 1 of this year. Those funds are expected to last through fiscal year 2015 but will run out soon afterward, according to MACPAC. If CHIP funds run out, the number of uninsured children will increase, as not all of them will be eligible for subsidized coverage through the health insurance exchanges. Cost-sharing would also go up for many families, and it's not clear whether the Patient Protection and Affordable Care Act exchange plans are a suitable alternative for CHIP coverage, according to the report.
Therefore, MACPAC recommends a funding extension "to enable policymakers to address these concerns so that children currently enrolled in CHIP can be integrated into other sources of coverage that are of high quality and affordable to families. To aid the Congress in this endeavor, the Commission's future analyses will explore such policy options and the associated trade-offs."
Additionally, the report states an additional funding extension should be considered if it becomes clear during the two-year transition period that more time is needed to ensure appropriate transitions to other forms of health insurance coverage.
CHIP covers 8 million children in families with low to moderate incomes, 97 percent of whom were at or below 250 percent of the federal poverty level in fiscal year 2013. The federal government spent $13 billion on the program in FY 2013, according to the report.
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