Congress is now overdue to reauthorize funding for the State Children’s Health Insurance Program (CHIP). The funding provided in the last reauthorization expired on September 30 and by the end of this year, states will begin to run out of money to fund their programs. While the current congressional debate is focused primarily on funding, it is even more important to resolve the policy problems that beset the program.

Congress should make structural policy changes to CHIP, particularly in the program’s financing.

Twenty years ago in 1997, Congress created CHIP to address the problem of uninsured American children. Increased tobacco taxes provide funding for block grants to each of the states and five U.S. territories—American Samoa, Guam, the Northern Mariana Islands, Puerto Rico, and the Virgin Islands.

Since that time, American taxpayers have invested billions of dollars, with mixed results. Millions of children have received access to coverage. However, CHIP expansion also has contributed to the “crowding out” of private health insurance coverage for children. Moreover, states offer a limited set of coverage options, so access to coverage itself does not automatically translate into access to a variety of quality health care options for all children.

Read the full article on reforming CHIP by Meridian Paulton, Robert Moffit, and Marie Fishpaw at The Heritage Foundation