Program that provides low-cost health care to 9M children set to expire CHIP provides health insurance for kids from low- and moderate-income families.

 -- Amid intense debates about the Graham-Cassidy health care bill, the Senate and House missed the deadline to reauthorize the Children's Health Insurance Program (CHIP) -- meaning federal funding for the program will expire at the end of the month.

Last reauthorized in 2015, CHIP is a partnership between the federal government and states that insures American children from low and moderate-income families.

And though the program's situation isn't yet dire -- and won't be until the states begin to run out of money -- some states are starting to get nervous about paying for the program.

"States are optimistic that Congress will actually act. They're not totally panicked yet," said Diane Rowland, executive vice president of Kaiser Family Foundation. "But, they need to know very soon that addition money will be coming so they'll know how they can continue their programs."

A Little History

CHIP was passed into law with bipartisan support under President Bill Clinton in 1997.

Co-sponsored by the late Sen. Ted Kennedy, D-MA, and Sen. Orrin Hatch, R-UT, and championed by then-first lady Hillary Clinton, the program provides low-cost health coverage to children in families who earn too much to qualify for Medicaid, but still need government support to pay for their kids' healthcare.

In the years following the program's passage, the uninsured rate among children fell significantly, from 13.9 percent in 1997 to 4.5 percent in 2015, according to a Medicaid and CHIP Payment and Access Commission report released early this year. An analysis from the American Academy of Pediatrics found that families are more likely to take advantage of preventative and primary care after enrolling their children in the program.

Who and What Does CHIP Cover?

In 2016, more than 8.9 million children were enrolled in CHIP, up from 8.44 million in 2015, Access Commission records show.

Eligibility rules vary by state, but in most states, children age 18 and younger qualify if their family's income falls under 200 percent of the federal poverty line -- just under $50,000 for a family of four. Some states also offer coverage to children in families earning 250 or even 300 percent of the poverty line. Twenty states offer coverage for pregnant women as well.

Benefits also vary by state, but coverage generally includes routine checkups, immunizations, mental health services, prescriptions, inpatient and outpatient hospital care, and x-ray and lab services.

How Much Does CHIP Cost?

According to the Access Commission, CHIP spending reached about $13.6 billion in FY 2016.

The feds foot the bill for the bulk of CHIP expenditures, with most state governments covering less than 15 percent of the program's cost.

The average cost to families is just over $150 per child per year, according the Access Commission estimates. If not for CHIP, those families would have faced bills of more than $850 per year per child in employer-sponsored insurance, the report said.

Most states have enough money put aside to help pay for CHIP if the government grants aren't immediately available.

But ten states are slated to run out of funding by the end of 2017.

Minnesota's state commissioner for the Department of Human Services even wrote a letter to the Minnesota congressional delegation urging them to extend funding now, saying the state will exhaust their $115 million CHIP allotment soon.

What Happens If We Don't Reauthorize CHIP?

While health coverage for kids under CHIP won't suddenly disappear on Oct. 1, there are serious consequences for the program at the state level. If certain needs aren't met, states will have to reshuffle their funds and may have to notify families soon of amended coverage plans.

Some advocates have expressed concern that CHIP could be another battleground for Obamacare, but most evidence points to lawmakers being supportive of the bipartisan program.

"What I don't know is whether there will be an extension for 5 years, 1 year, 2 years. So while I don't think there will be an immediate crisis, I don't know what the long range prospect for CHIP will be," said Rowland.