The Children’s Health Insurance Program (CHIP) doesn’t just provide healthcare to 9 million low-income kids, it also saves the government $6 billion. Despite this, it’s in danger of exhausting its funding as early as this month in some states.

The Congressional Budget Office estimated that reauthorizing CHIP for five years would cost $800 million, but an estimate Wednesday found that reauthorizing CHIP for ten years would save the government $6 billion. But how?

Slate theorized that this has to do with how cheap CHIP is relative to the Affordable Care Act (ACA). If CHIP is allowed to lapse, the protected children would almost certainly get expensive-to-subsidize plans off the ACA exchanges instead. Conversely, funding CHIP better allows families to get the cheaper government insurance plan.

According to these estimates, Congress can actually lower the deficit by giving health insurance to millions of kids. But the implications for healthcare are broad.

The Children’s Health Insurance Program functions as a government-operated insurance provider, like Medicare. Along with Medicaid, CHIP covers nearly 40 percent of American children. CHIP’s savings over the ACA marketplace are proof positive that “Medicare for All” universal healthcare could prove a cheaper system.

Single-payer healthcare — what Bernie Sanders’ Medicare for All bill would create — has gained traction in the political consciousness of Americans, according to a Pew study last year. The pressure levied by Congressional Republicans to repeal the ACA gives a political opening for single-payer or public option plans, both of which would cast the government as an insurance provider.

The calculation from the CBO that compares CHIP to the ACA-subsidized plans adds another piece to the argument, and proves that providing health insurance can be done cheaper and better by the government directly than supported through private insurers.

But the first battle is saving the Children’s Health Insurance Program. Despite the fact that extending the program generates more savings than it costs by leaps and bounds, it’s unclear if it will be extended in time to help those who could lose their insurance this month.

Millions of children and billions of dollars are waiting on Congress.


Katelyn Kivel is a journalist and political scientist in Kalamazoo, Michigan. Follow her on Twitter @KatelynKivel.

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