Study: 2.7M children could lose CHIP coverage, benefits

If Congress does not renew the Children's Health Insurance Program, approximately 2.7 million children could lose coverage or face reduced health benefits next year, according to an American Action Forum study.

CHIP was created in 1997 to provide health insurance to children whose families' incomes were too high to qualify for Medicaid but could not afford private insurance. The program is largely funded by the federal government, but unless CHIP is renewed, the funding will begin to run out in October 2014.

Legislation has been pushed in both the House and Senate to renew the program. However, some lawmakers believe there is no longer a need for CHIP with the passage of the Patient Protection and Affordable Care Act. The facts do not favor the argument for not renewing the program, as the uninsured rate of Americans under the age of 18 remained at about 7 percent between the third quarter of 2013 and the second quarter of 2014, which indicates the PPACA had little impact on children's coverage across the country, according to the findings of a recent Urban Institute survey.

There are 1.6 million children insured by the program that would lose coverage if CHIP was eliminated, as they fall into a "family glitch," according to the study. This means the children would lose their health insurance if their parent's employer offers low-cost health coverage, even if the child's family cannot afford to pay for the coverage. There are an additional 645,000 children who are currently uninsured that would fall into the family glitch.

In many states CHIP funding is used to expand Medicaid programs to the minimum premium tax credit eligibility levels. There are 460,000 children covered through CHIP funded Medicaid programs. While it is unlikely those children would lose their health insurance if the program was eliminated, it is likely their benefits would be reduced, according to the study.

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