Congress Must Act Soon to Maintain Health Coverage for Children of Working Families

October 13, 2017 by Shamekka Kuykendall in Blog, Health

When Congress allowed federal funding for the Children’s Health Insurance Program (CHIP) to expire on Sept. 30, policymakers put at risk health coverage for nearly 9 million children of working families nationwide. For Maryland, this could mean nearly 138,000 children lose their health care if the state can’t cobble together the funds to keep the program going. It is critical that Congress moves soon to restore federal funding for CHIP or else Maryland and other states will be forced to make tough decisions as existing funding runs out.

Doctor and child

CHIP provides low-cost health coverage to children in families that earn too much income to qualify for Medicaid but still struggle to afford private health coverage along with housing, food, and other day-to-day needs. In Maryland, there are two CHIP programs, Maryland Children’s Health Program (MCHP) and MCHP Premium. MCHP provides health insurance for uninsured children under age 19 whose household is at or below 211 percent of the federal poverty level for their family size. In 2017, this is about $51,273 for a family of four. MCHP Premium provides the same health insurance coverage, but it is for households whose income is above MCHP guidelines, at or below 322 percent of the federal poverty line. In 2017, this is about $78,246 for a family of four.

Because Maryland expanded Medicaid under the Affordable Care Act, the federal government provides an enhanced matching rate that will pay 88 percent of the cost of MCHP through 2019. The loss of this enhanced matching rate would increase Maryland’s investment in the program by an estimated $68 million in fiscal 2018, $72.8 million in fiscal 2019, and $19.5 million in fiscal 2020.

If Congress does not extend federal funding for CHIP, Maryland and other states face tough decisions about children’s health insurance coverage. Under current law, federal funds for the CHIP are only provided through federal fiscal year 2017, which ended Sept. 30. Unless Congress extends CHIP funding, all states are expected to exhaust any remaining federal CHIP funds within the next year, including funding left over from prior years. At this rate, Maryland is projected to exhaust its federal funds for children’s health insurance by April 2018, at the latest. Because of the way CHIP is set up, Maryland must continue to fund the program through 2019, even without the federal dollars. This means that Maryland will face difficult budget choices, putting other vital programs at risk of cuts.

These tough budget choices are compounded by the current $750 million projected budget shortfall for the next fiscal year, which begins July 2018. Policymakers have already cut from the current year’s budget to address the shortfall. On Sept. 6, the Maryland Board of Public Works approved $61 million in budget cuts for the current fiscal year, including $22 million in cuts from the Department of Health.

Given Maryland’s current fiscal condition, the state cannot afford to absorb federal cuts in such a vital service without harming other state responsibilities. It is imperative that Congress restore funding for CHIP by passing the Healthy Kids Act or similar legislation, so that children have access to routine doctor visits, immunizations, prescriptions, and dental and vision care. Without this funding, we will see the effects in schools and our communities across Maryland and the nation.