States worry as future of CHIP remains uncertain

After a week of speeches extolling the virtues of a program that provides health insurance to 8.9 million children and 370,000 pregnant women, federal lawmakers again failed to authorize any funding.

Uncertainty around the fate of the Children’s Health Insurance Program is placing states in a difficult predicament of figuring out if coverage for these individuals can continue. Minnesota found itself nearly out of federal CHIP money last week before a last-minute transfusion of $3.6 million from the CMS.

The funds were a redistribution of unspent CHIP funding nationwide, but it will only get the state through the rest of October.

If Congress fails to fully reauthorize CHIP, Minnesota may not be able to continue coverage much longer for pregnant women with incomes up to 278% of the federal poverty level and infants in families with incomes up to 275% of the poverty level. These groups don’t qualify for Medicaid.

“We don’t have unlimited resources to cover this population,” said Emily Piper, commissioner of Minnesota’s Department of Human Services. In addition, Minnesota would face new budget pressures if officials were forced to move 125,000 now in CHIP to Medicaid.

Under a provision for enhanced CHIP funding in the Affordable Care Act, Minnesota receives an 88% federal match for enrollees. The state only receives a 50% federal match for its Medicaid program. Moving CHIP enrollees to Medicaid would leave Minnesota with a multimillion-dollar tab to continue covering those beneficiaries.

With no new funds coming in, Arizona and the District of Columbia also expect to exhaust their federal dollars in the coming weeks, while a few others like Utah and North Carolina will be out of money by December.

“The problem is one of benign neglect in that (Congress) assumes wrongly that states can continue without renewed funding right away, and they assume dangerously that members of Congress will eventually come together to do the right thing but not making an urgent plan to ensure it’s so,” Dr. Karen Remley, CEO of the American Academy of Pediatrics, said in a statement.

Congress last funded CHIP through the Medicare Access and CHIP Reauthorization Act, providing nearly $40 billion in federal funding to states for fiscal 2016 and 2017. That funding stream ended Sept. 30.

There was some optimism that Congress would act last week when the Senate Finance Committee and the House Energy and Commerce Committee passed bills allocating $21 billion to $25 billion annually through fiscal 2022. They also eliminate an ACA provision that enhanced federal allotments for the program by 23%, with states receiving matching levels ranging from 88% to 100%. The matching funds would continue through fiscal 2019, fall to 11.5% in fiscal 2020 and be eliminated entirely in fiscal 2021.

But there are hang-ups before the bills can pass their respective chambers. The Senate committee failed to include any budget offsets to fund the program and now realizes that it must do so, according to committee spokesman Taylor Harvey. Senators, however, were scheduled to be on a weeklong recess starting Oct. 9.

And then there’s the partisan divide that impacts everything in Washington these days. House Democrats slammed a Republi- can proposal to partially pay for CHIP by charging higher Medicare premiums to seniors earning more than $500,000.

“Here we are with a partisan bill that asks for coverage of children on the backs of seniors,” said Rep. Diana DeGette (D-Colo.).

Republicans were confused as to why Democrats were against charging wealthy seniors roughly $135 more per month on average to ensure coverage for poor children.

Offsets may not be the only thing that slows the process. Sen. Pat Toomey (RPa.), who was the sole no vote on moving the bill out of committee, has vowed to introduce an amendment that would prevent members of Congress from appropriating CHIP funds for items not related to the program.

Toomey pointed to a Congressional Research Service finding that $42 billion in unspent, CHIP-allocated funds had been redirected to unrelated programs via the appropriations process since 2009. The most recent continuing resolution drew $2.65 billion from excess CHIP funding to spend on unrelated programs.

States have statutory time lines in which they must alert CHIP enrollees if there will be a coverage change due to loss of federal funds. So even if a state has enough funding to make it through Dec. 31, they would need to send out letters to enrollees 30 to 60 days before an expected change.

“Here we are with a partisan bill that asks for coverage of children on the backs of seniors.”

Rep. Diana DeGette (D- Colo.)