Nevada officials are hoping for the best but preparing for the worst when it comes to the future of a state-run health insurance program that provides coverage to 27,000 children from low-income families.

Administrators with the Department of Health and Human Services presented to lawmakers on Thursday a couple of possible steps the state could take to keep those children covered should the federal government fail to re-authorize or otherwise extend funding for the Children’s Health Insurance Program, known here as Nevada Check Up. Federal funding for the program, which provides low-cost health insurance to roughly 9 million children nationwide whose families exceed the income limits for Medicaid but still need help paying for insurance, officially expired in September.

Congress passed a continuing resolution last month that should keep the program in Nevada running until the end of February, though officials are continuing to monitor funding levels on a week by week basis. The state also received redistribution funds, unspent federal allotments for the program from prior years, from the Centers for Medicare and Medicaid Services in December.

Department officials plan to ask lawmakers to allow them to temporarily use so-called intergovernmental transfer funds to cover the gap in federal funding on a short-term basis — more in the manner of weeks than months — at the February meeting of the Interim Finance Committee.

Longer term, officials could amend the state Medicaid plan — the agreement between the state and federal government about how a state will run its Medicaid program — to offer coverage to the 27,000 children currently on Nevada Check Up. Medicaid currently covers about 13,000 children.

The problem for the state is that the federal government pays for about 99 percent of the costs of providing health insurance to both kids on Nevada Check Up and Medicaid. If CHIP isn’t reauthorized, all 40,000 kids would be subject to the lower federal matching rate, 65 percent, used for the regular Medicaid program, meaning the state would be left to cover the difference.

“So there’s more damage if it doesn’t get reauthorized, in that sense,” said Marta Jensen, administrator of the state’s Medicaid division.

Some states have already set deadlines for freezing their CHIP enrollment and made preparations to move eligible children onto plans available through the individual exchange. But state officials said Nevada has focused on trying to find a way to keep those children covered, even if it is through the traditional Medicaid program.

“The governor has made it clear he’s not interested in not having these children have coverage,” said Julie Kotchevar, a deputy administrator with the department.

Gov. Brian Sandoval, a vocal proponent of the Children’s Health Insurance Program and the first Republican governor to expand the state Medicaid program under the Affordable Care Act, called on Congress in December to fund CHIP on a permanent basis. (All six members of Nevada’s congressional delegation support reauthorizing funding for the program.)

“At this point the situation is critical,” Sandoval said. “The authorization of this funding is urgent.”

In November, the House voted to pass a bill to extend funding for the CHIP program for five years; however the bill included several additional provisions unpalatable to Democrats making changes to the Affordable Care Act. Reps. Ruben Kihuen and Dina Titus, both Democrats, joined 172 other representatives in opposing the bill, while Nevada’s third House Democrat, Jacky Rosen, voted for the bill saying that it had “serious flaws” but that she “could not in good conscience” oppose renewing the program.

The Senate Finance Committee passed a separate CHIP funding bill in November without funding for federally qualified centers or funding offsets included in the House bill. The bill has not yet come to the floor of the Senate for a full vote.

Lawmakers have indicated that they are close to resolving issues over reauthorizing funding for the program and that the funding could be authorized as soon as next week.

Jensen acknowledged, though, that should the state have to shift the 27,000 children onto traditional Medicaid, it will also have to pare down existing services it offers to make up for the difference for the lower federal matching rate.

“If you’re coming up with alternatives that doesn’t mean we’re creating money out of leaves on a tree,” said Assemblyman Mike Sprinkle. “That means there will be other services that are going to be cut or will see reductions because you’re needing to move money over to cover what we’re talking about.”

Sen. Pat Spearman, who chairs the Legislative Commission on Health Care, said she was concerned about what impact failing to re-authorize funding for the program would have on individual children, particularly those that are very ill and require ongoing treatment.

“Again, we’re not talking about statistics,” Spearman said. “We’re talking about, in many cases, life or death.”