Health care reform may have an impact on CHIP

Children’s Health Insurance Program kids

Affordable Care Act could have major consequences for the Children’s Health Insurance Program

The Affordable Care Act may have a significant impact on the Children’s Health Insurance Program (CHIP) in the coming years. The program was first enacted in 1997 and serves as a way to provide minors with the insurance coverage they need. Before the implementation of CHIP, the uninsured rate for minors throughout the U.S. was 14%. Today, the uninsured rate among minors is 7%. Many of the minors that receive coverage through this program could see their policies placed in jeopardy in the coming years, however.

Health care reform could place the federal program in jeopardy

CHIP currently covers 8 million minors throughout the country and has an annual cost of $13 billion. The majority of this money is appropriated through Congress, with the remainder coming from state governments. The Affordable Care Act  made significant changes to the country’s health care system and could make CHIP obsolete within the near future, but the federal government has opted to maintain the program for a time in order to facilitate a smooth transition. The problem, however, is that funding for the program could lapse.

Federal funding for CHIP could expire at the end of 2015

Children Health InsuranceThe Affordable Care Act ensures that federal funding to CHIP will remain active through 2015, but funding could run out after that period. States are required to maintain their eligibility standards for CHIP through 2019, but without the supply of federal funds, the program may not be able to adequately provide coverage to many minors. If families could find insurance coverage through state-based exchanges, this may not be a problem, but exchanges often offer more expensive policies with fewer benefits than those that can be found through CHIP.

2.2 million may lose their insurance coverage if federal funding is not extended

According to the American Action Forum, this could have an effect on 2.2 million that receive coverage through CHIP. If federal funding for the program is not extended beyond 2015, many families could be forced to find insurance coverage elsewhere. In some cases, this coverage may be subsidized by the federal government, but the majority of families are not expected to be eligible for these subsidies.

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