Congress finally seems ready to take action on the Children’s Health Insurance Program after funding lapsed Sept. 30.
Before the deadline, lawmakers were busy grappling with the failed repeal of the Affordable Care Act.
CHIP covers 9 million children nationwide. But until Congress renews CHIP, states are cut off from additional federal funding that helps lower- and middle-income families. With the greatest CHIP enrollment of any state — 1.3 million kids — California has the most to lose.
State Sen. Richard Pan (D-Sacramento) said scrambling to try to fill a big hole in health care funding would be a “big nightmare.” He said he hopes Congress doesn’t get sidetracked with other policy priorities and neglect to re-up the children’s program.
“It is a shame what’s happening, in terms of politics being played around people’s health,” Pan said.
CHIP, which has enjoyed broad bipartisan support, helps lower- and middle-income families that otherwise earn too much to be eligible for Medicaid. Besides children, it covers 370,000 pregnant women a year. Like Medicaid, CHIP is traditionally paid for with state and federal funds, but the federal government covers most of the cost.
Though current authorization for spending has expired, states can use some of their unspent federal CHIP money. Still, several states are expected to run out of money before the end of 2017, and most of the rest will run out by next summer. CHIP has been in this fix only one other time since it was established in 1997. In 2007, CHIP went weeks without funding authorization from Congress.
California was allotted $2.7 billion in federal funds for fiscal year 2017 to cover CHIP-eligible kids through Medi-Cal, according to the California Department of Health Care Services, which administers the program.
If the state were to lose federal CHIP funds, California officials may have to cut costs in ways that could affect all Medi-Cal enrollees, such as shaving off optional benefits, or making it harder to people to re-enroll in the program, said Kelly Hardy, senior managing director of health policy at Children Now, which advocates for children’s health and education programs.
“States can’t fund children’s coverage on a promise of future action,” she said. “They need action now.”
Here’s a quick look at what may lie ahead for the program.
1. Will children lose coverage because Congress missed the deadline?
They could eventually, but not immediately. A few states facing the most immediate threat, including California and Arizona, have enough funding to last only until the end of the year.
So far, California Department of Health Services spokesman Tony Cava said, the state’s program is continuing business as usual. But after year’s end, officials may have to scramble to find ways to cover kids who have been guaranteed enrollment through 2019. (Others, such as children in higher-income households and pregnant women, do not have the same guarantee.)
No states have yet announced plans to freeze enrollment or alert families about any potential end in coverage. But if Congress fails to renew funding quickly, some states may begin taking steps to unwind the program in the next few weeks.
2. What are states doing in reaction to Congress missing the deadline?
Most states are doing little except reaching into their unspent federal funds.
However, Minnesota was among those most imperiled because it had spent all its funds. State officials said Tuesday that the federal Centers for Medicare & Medicaid Services (CMS) was giving Minnesota $3.6 million from unspent national funds to cover CHIP this month.
Emily Piper, commissioner of the Minnesota Department of Human Services, reported in a newspaper commentary last month that her state’s funds would be exhausted last Sunday.
Even without the last-minute infusion of funding from CMS, most of the children covered by CHIP would have continued to receive care under the state’s Medicaid program, but Minnesota would get fewer federal dollars for each child, according to Piper’s commentary. However, she added, those most at risk are the 1,700 pregnant women covered by CHIP, because they wouldn’t be eligible for Medicaid.
Utah has notified CMS that it plans to discontinue its CHIP program by the end of the year unless it receives more federal money. About 19,000 children are in the state’s CHIP program, state officials say. So far, though, the state said it is not moving to suspend service or enrollment or alert enrollees about any possible changes.
Nevada officials said if funding is not extended it might have to freeze enrollment on Nov. 1 and end coverage by Nov. 30.
Oregon said it has enough CHIP funding to last through October for its program that covers 98,000 children.
3. When is Congress likely to act?
The Senate Finance and the House Energy and Commerce committees have scheduled votes Wednesday on legislation to extend CHIP funding. If both approve their individual bills, floor votes could come quickly, and then both houses would need to resolve any differences.
Senate Finance Committee Chairman Orrin Hatch (R-Utah) and the committee’s ranking Democrat, Sen. Ron Wyden of Oregon, announced an agreement in mid-September to renew CHIP funding. Under the proposed deal, federal CHIP funding would drop by 23 percentage points starting in by 2020, returning to its pre-Affordable Care Act levels. The agreement would extend the life of the CHIP program through 2022.
Hatch and Wyden did not provide any details on how they would pay for the CHIP extension.
The House Energy and Commerce Committee posted its bill just before midnight Monday. It mirrors the Senate Finance plan by extending funding for CHIP for five years and gradually phasing down the 23-percentage-point funding increase provided under Affordable Care Act over the next two years.
4. If CHIP is so popular among Republicans and Democrats, why hasn’t Congress renewed the program yet?
The funding renewal was not a priority among Republican leaders, who have spent most of this year trying to replace the Affordable Care Act and dramatically overhaul the Medicaid program. Some in Congress also thought the Sept. 30 deadline was squishy since states could extend their existing funds beyond that.
5. Who benefits from CHIP?
While CHIP income eligibility levels vary by state, about 90 percent of children covered are in families earning 200 percent of poverty or less ($40,840 for a family of three). CHIP covers children up to age 19. California covers children in families with a slightly higher income — up to 266% of the federal poverty level — or a little more than $54,000 for a household of three.
States have the option to cover pregnant women, and California and 17 others plus the District of Columbia do so.
The program is known by different names in different states such as Hoosier Healthwise in Indiana and PeachCare for Kids in Georgia.
For families that move out of Medicaid as their incomes rise, CHIP is an affordable option that ensures continued coverage for their children. Many states operate their CHIP programs as part of Medicaid.
California Healthline Sacramento correspondent Pauline Bartolone contributed to this report.