NC Budget and Tax Center

256,000 N.C. children are at risk of losing healthcare coverage as Congress lets federal funding for CHIP expire

Federal funding for the Children’s Health Insurance Program (CHIP), which covers about 9 million children in the U.S., has now expired because Congressional leaders did not renew its funding by Sept. 30 as required by law. The CHIP program was enacted in 1997 and provides affordable, high-quality, and consistent health care coverage for children who do not qualify for Medicaid and whose families lack access to affordable employer-based or private insurance.

Congress’ failure to renew funding for the CHIP program means over 256,000 children across North Carolina are at risk of losing their only source of health care coverage. Furthermore, this decision by Congress also spells budget trouble for our state in 2018, as our General Assembly assumed continued federal funding for CHIP in the most recent state budget and failed to take seriously proposed federal budget cuts.

North Carolina is now projected to exhaust all of its federal funds for CHIP within the first three months of 2018. In other words, our state could be one of many states facing a funding shortfall in this area if Congress does not extend federal funding.

The Kaiser Family Foundation summarizes the negative impact to families and provides a North Carolina case study from the past that shows the real world implications:

“Reductions in CHIP coverage will result in coverage losses for children and negative effects on children’s health and family finances. If states close enrollment and/or discontinue coverage for children in separate CHIP programs, some children could shift to parents’ employer-sponsored plans or Marketplace plans, but others would become uninsured. Previously, some states closed enrollment in CHIP for limited periods in response to state budget pressures, and studies show that this led to coverage losses, left eligible individuals without access to coverage, and had negative effects on health and family finances.

“In North Carolina, enrollment fell by nearly 30% from about 72,000 to 51,300 when it froze enrollment between January and October 2001. The number of children determined eligible for CHIP but placed on a waiting list grew to over 34,000. Most (60%) children added to the waiting list were previously enrolled in Medicaid and were unable to transition to CHIP.

“Enrollment freezes negatively affected children’s health and family finances. In North Carolina, parents with children affected by the enrollment freeze said their children experienced periods of being uninsured and that almost all needed care during the time that they lacked coverage. Parents often had to delay care while their children were uninsured and reported difficulties obtaining prescription medications for their children. Parents also reported that obtaining care while their children were uninsured resulted in significant financial hardships, requiring them to cut back on necessities, borrow money from family or friends, and accrue debt for missed payments on bills.”

The fact that Congress failed to act in a timely manner for such an important program affecting millions of children is unfortunate considering that a recent poll had found three-fourths (75 percent) of the general public saying it was important for Congress to work on reauthorizing funding for the State Children’s Health Insurance Program (CHIP).

The bottom line: It is critical that Congress renew federal funding for CHIP and stop political budget games that hurt vulnerable families and children across America and North Carolina.

Luis A. Toledo is a Public Policy Analyst for the Budget & Tax Center, a project of the North Carolina Justice Center.

 

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