As part of a stopgap federal government spending measure passed today by both the House and Senate, funding for the Children’s Health Insurance Program (CHIP) has been authorized through the end of 2017. Meanwhile, funding for the federal government will expire on Dec. 22, presumably giving Republicans long enough to pass their tax reform reconciliation measure.

chip-program-reauthorizedThe CHIP provisions allows the Secretary of Health and Human Services (HHS) to reallocate any unused federal funds to the states most at risk of running out of CHIP money by the end of the month.

CHIP covers health care for some 8.9 million children who otherwise would be without medical aid because of their parents’ income and/or work status. Several states and the District of Columbia that offer the program are in danger of running out of CHIP funds since authorization for the program expired with the federal fiscal year on Sept. 30.

The program has become somewhat of a bargaining chip (no pun intended) between Democrats and Republicans as they kibbutz toward a long-term funding authorization for the federal government, which under the measure passed today will expire three days before Christmas. There is no guarantee that an agreement will be reached by that date, but whenever a spending plan is approved, few doubt that CHIP — which has wide bipartisan support — will not be part of it.

President Trump and Democrat party leaders meanwhile mingled with Republican representatives at 1600 Pennsylvania Ave. to bargain for a long-term spending agreement.

“We’re here in the spirit of ‘let’s get it done,'” Senate Minority Leader Chuck Schumer (D-N.Y.) said in the Oval Office, where he was joined by House Minority Leader Nancy Pelosi (D-Calif.), top Republicans, Trump and Defense Secretary Gen. James Mattis.

The Children’s Health Insurance Program (CHIP) provides health coverage to eligible children, through both Medicaid and separate CHIP programs. CHIP is administered by states, according to federal requirements. The program is funded jointly by states and the federal government.

The Children’s Health Insurance Program (CHIP) is funded jointly by the federal government and states through a formula based on the Medicaid Federal Medical Assistance Percentage (FMAP). As an incentive for states to expand their coverage programs for children, Congress created an “enhanced” federal matching rate for CHIP that is generally about 15 percentage points higher than the Medicaid rate — averaging 71 percent nationally. For example, if a state has a 50 percent match rate for Medicaid, they may have a 65 percent match rate for CHIP.

Because CHIP is a capped program, each state is provided an annual CHIP allotment. Every fiscal year, the Centers for Medicare & Medicaid Services (CMS) determines the share of program funding  they will pay that year. States must provide matching funds to get their federal funding allotment.