Massachusetts is on track to run out of money in January for a federal program that provides health coverage for 172,000 children in the state unless Congress moves quickly to approve new funding.
Without congressional action, Massachusetts is slated to lose $295 million in annual funding, according to state health officials.
The deadline to renew funding for the Children’s Health Insurance Program, or CHIP, was Sept. 30. Several states, including Massachusetts, had enough money left to carry them a few months past that deadline.
The 20-year-old program provides health coverage to 9 million children nationwide. It covers children from low- and moderate-income families who do not qualify for Medicaid, the government program for low-income people.
On Wednesday, Governor Charlie Baker sent a letter to congressional leaders on behalf of the National Governors Association, urging Congress to take immediate action to continue funding for children’s health insurance.
“Absent congressional action, states will be forced to take steps including the notification of thousands of families of the loss of CHIP health care coverage,” Baker said in the letter, which also was signed by Oregon governor Kate Brown. “Taking steps to avoid those worst-case outcomes places a tremendous administrative and financial burden on states and sows confusion among vulnerable populations.”
In Massachusetts, CHIP is administered through the state Medicaid program, called MassHealth. Baker administration officials said they are exploring alternative coverage options for children on CHIP if Congress fails to continue federal funding.
The Blue Cross Blue Shield of Massachusetts Foundation, a group that has studied the issue, said most Massachusetts children now covered by CHIP would be able to stay covered under MassHealth, according to a previous agreement between state and federal officials. But the state would be stuck with higher costs to pay for that coverage unless Congress moves to keep the federal dollars flowing.
Baker administration officials have not detailed how they plan to deal with the possible funding cutoff — or if and when they will notify families about the issue. The Washington Post reported last week that officials in nearly a dozen states were preparing to notify families that funding for the program is running out and that many children may be at risk of losing coverage.
Funding for CHIP, a signature legislative achievement for the late Massachusetts senator Edward M. Kennedy, has typically enjoyed bipartisan support.
But the GOP-led Congress has spent much of the past several months working on legislation to repeal the Affordable Care Act — an effort that has stalled — and to overhaul the federal tax code. Congressional leaders have spent less time discussing funding for children’s health insurance and other programs, including community health centers, which also had a Sept. 30 deadline for renewal.
“This issue should not be political,” Democratic Senator Elizabeth Warren of Massachusetts said in a phone interview Wednesday. “CHIP reauthorization should have happened as part of regular business in Congress. . . . But the Republicans won’t talk about any of these programs. They’re focused on repealing health care and tax giveaways.”
A spokesman for Senate majority leader Mitch McConnell said Wednesday that bipartisan work on CHIP funding is continuing and that senators are working on how to pay for the program.
CHIP provides coverage to children and pregnant women. It covers physician visits, hospital stays, and prescription drugs at little or no cost to families.
For Massachusetts, the program is particularly attractive because the federal government pays for 88 percent of the costs, while it pays a smaller share — about 50 percent — for MassHealth members.
“Either there’s a big financial hit [to the state] or they’d have to make changes. That would be the trade-off,” said Audrey Shelto, president of the Blue Cross Blue Shield of Massachusetts Foundation.
Shelto said about 7,000 unborn children and their pregnant mothers who are now eligible for the program in Massachusetts would lose coverage if the federal government fails to approve new funding.
“It is not getting attention [from Congress] right now, perhaps because they know many states can cover the rest of this month,” she said. “But it is of huge concern if they don’t [act].”
Congress’s failure to reauthorize funding also has concerned health care providers who treat low-income children. Officials from Boston Children’s Hospital have been raising the issue at meetings in Washington with members of Congress, said Josh Greenberg, the hospital’s vice president of government relations.
About 40 percent of Massachusetts patients admitted to Children’s Hospital are covered by MassHealth or CHIP.
If Congress doesn’t approve additional funding for children’s health insurance, Massachusetts officials could face these unappealing options: “You can cut people off, you can reduce the services you’re paying for, or you can pay providers less,” Greenberg said.
State officials are already grappling with the rising costs of MassHealth, which has grown to more than $16 billion a year. The governor proposed several ideas to curb spending in the program earlier this year, but state lawmakers have largely rejected them.
Baker and lawmakers agreed, however, to collect new fees from Massachusetts employers to help pay for the health care program.Priyanka Dayal McCluskey can be reached at priyanka.mccluskey@
globe.com. Follow her on Twitter @priyanka_dayal.