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CHIP is Critical to Families and State Budgets

As Congress begins a busy September, it must reauthorize funding for the Children’s Health Insurance Program (CHIP) by the end of the month. Currently, CHIP provides health care to 8.9 million children, or 12 percent of all children nationally. In particular, children in rural areas depend on public insurance: 47 percent are on Medicaid or CHIP, compared to 38 percent of children in urban areas.

CHIP helps families afford care for their children at a time when many employer-sponsored plans are dropping or increasing costs for dependent coverage. By increasing access to health services, it reduces rates of unmet medical need and child mortality. CHIP plans cover similar or better coverage to individual market plans, in addition to child-specific services including dental, vision, and autism services. Families also save money: without CHIP, cost sharing could be ten times higher for individual market plans.

Failing to reauthorize CHIP funding shifts a huge financial burden onto states, forcing states to make tough choices between denying coverage and cutting other budget priorities. States have already enacted their budgets for next year, and at least 35 states lack contingency funds if funding does not continue at current levels.

Without reauthorization, states will face at least a $10 billion total shortfall next year. Families depending most on CHIP, such as rural families, will be hit hard if states cut enrollment. Thirty-one states, including Colorado, Nevada, and Pennsylvania, will exhaust their remaining funds within six months.

Congress should quickly act to reauthorize funding for CHIP to ensure that states can balance their budgets and that families have peace of mind that their children will have access to care.