Emergency funding approved by Congress last month will not be enough to keep the Children’s Health Insurance Program (CHIP) afloat this month in some states.

Phil Galewitz of Kaiser Health News reports that despite a $2.85 billion stopgap measure passed in late December that Congress intended to keep programs going for the next three months, federal officials now say that some states will begin running out of funding on January 19. The update came on the same day that the Congressional Budget Office released an updated budget score that now estimates the net budget impact of CHIP re-authorization to be a fraction of previous projections.


Department of Human Services spokesperson Amy Webb said this week that ARKids funds would be set to run out of funds in March if Congress doesn’t take action.

It has now been more than three months since the federal government allowed funding for the Children’s Health Insurance Program (CHIP) — which provides health coverage for 9 million lower-income children, including 400,000 kids who are covered by ARKids — to lapse.


Thus far, no state has had to stop services thanks to stopgap funding. Alabama was set to freeze enrollment on Jan. 1 because of the funding lapse, but the temporary funds authorized in December bought the state a few more weeks. Other states are preparing to notify families that their children could be in danger of losing CHIP coverage.

Re-authorization of long-term funding (unlike Medicaid, Congress must periodically extend funding for CHIP) has been at a standstill because Republicans insist the nation can’t afford to fund CHIP unless other social services are cut — at the same time that they devoted all of their energies last month to ramming through a tax cut that will add at least a trillion dollars to the national debt.


Ironically enough, Republicans’ excuse for holding off on permanent funding for CHIP is now out the window because of the quirks of that very tax bill. The Congressional Budget Office yesterday announced a revised budget projection for the five-year re-authorization bill to take into account the repeal of the Affordable Care Act’s individual mandate that was part of the GOP tax bill. Whereas before the net impact on federal deficits was $8.2 billion, now it’s all the way down to $800 million, a 90 percent reduction in projected impact.

How did this happen? Nothing has changed in terms of the gross costs of funding CHIP. But when CBO does budget scores, it considers the net impact to the federal budget, including offsets that would come about from passing a given piece of legislation (providing coverage via CHIP, for example, saves the federal government money if those children would receive different federally funded coverage without CHIP). By repealing the ACA’s individual mandate (as well as some other regulatory changes included in the bill), Congress changed the baseline: The enactment of the GOP tax bill will make premiums on the ACA exchanges more expensive, which changes the CBO score on CHIP. If kids are booted from CHIP and get insurance on the ACA exchange, that will now be more costly to the federal government than it would have been prior to the individual mandate repeal. (The CBO also projects that because the individual mandate will increase the number of uninsured adults, ending CHIP funding would now have a bigger ripple effect as uninsured parents may sign up on the exchange when they go there seeking insurance for their children.)

The end result of the CBO’s calculations: With the tax bill in place, the hypothetical scenario in which CHIP funding ends is more expensive to the federal government than it was prior to the tax bill. When you take that into account, under current law, the decision to re-authorize CHIP now would have very little overall impact on the federal budget at all — less than $1 billion for a five-year extension of health insurance for millions of lower-income children.

The inaction of Republicans in Congress on CHIP was already a shameful scandal, particularly as they put on a full-on blitz to add at least a trillion dollars to the debt via their tax cut. Now, with this revised CBO score, their excuse has evaporated. It is past time to do the right thing.