States Scramble to Overcome Congress’ Failure to Move on CHIP

By: - October 6, 2017 12:00 am

Congress’ failure to reauthorize the Children’s Health Insurance Program leaves states facing difficult choices about who will continue to get health coverage.

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Editor’s note: This story has been updated to reflect the fact that both House and Senate committees have moved ahead with CHIP extensions.

By failing to reauthorize the Children’s Health Insurance Program before last week’s deadline, Congress has nudged the state of Minnesota toward a painful solution to the loss of federal funds: Unless it can find $95 million, the state said it will continue to provide full health care for certain low-income pregnant women in the program, while either reducing the number of children eligible for CHIP or scaling back their benefits.

That is the sort of agonizing choice that all states in the country will face in the coming months unless Congress acts quickly to restore federal funding to a program that is immensely popular with both parties.

With the U.S. Senate distracted last month by another Hail Mary attempt by Republicans to repeal and replace the Affordable Care Act, Congress didn’t get around to reauthorizing CHIP by the Sept. 30 deadline. And that has left states contemplating how to keep the program running when the federal funding runs out — if they can keep it going at all.

“The clock is ticking,” Joan Alker, executive director of the Center for Children and Families at Georgetown University, said. “The longer this goes on, the bigger troubles states are in and more consequences we will see.”  Some states will have to start notifying families early next month of coming disruptions in eligibility or benefits, she said.

Committees in both the House and Senate this week began to consider measures that would extend CHIP funding. According to The Hill, bipartisan efforts in both chambers to reach a solution that would resume CHIP funding have faltered, diminishing chances for a quick resolution.

CHIP is a joint federal-state program that provides health coverage to low-income, uninsured children who live in families whose income is too high to qualify for Medicaid. It covers nearly 9 million kids and 370,000 pregnant women across the country. It costs about $15 billion a year, with the federal government picking up nearly 90 percent of that tab. (Medicaid is also a matching program, but at a lower federal rate.) Those enrolled in CHIP are entitled to the same medical services as Medicaid recipients.

‘Terrible for People’

Unless Congress steps in soon, Minnesota said it would run out of CHIP funds by the end of October. And Arizona, North Carolina and Utah will exhaust their federal funding by the close of the calendar year, according to the nonpartisan Medicaid and CHIP Payment and Access Commission, which provides legislative analysis to Congress and the U.S. Department of Health and Human Services. Other states, with more carryover funds from last year, estimated their CHIP funding would expire by the spring.

Emily Piper, commissioner of the Minnesota Department of Human Services, sounded utterly exasperated with Congress’ failure to act in time.

“When you look at the people most urgently impacted,” she said, “pregnant woman and new moms, having this uncertainty looming over them at a time when they need that certainty to live their lives and care for their babies, it is really a disservice to them.”

Without the federal funds, Minnesota was preparing to adopt some drastic measures to keep the program operating. Piper said the state was planning to continue offering full services to the 1,700 pregnant women in CHIP, but to scale back either the eligibility of kids in the program or the services they would be entitled to. About 125,000 children are in Minnesota’s CHIP.

But then the Centers for Medicare and Medicaid Services informed the state earlier this week that it would send an additional $3.6 million in CHIP money from unused funds that had been distributed to the states between 2014 and 2016. The additional money would enable Minnesota to hold off any changes in the program until the end of October, the state human services agency said.

Shutting Down

Arizona, with about 88,000 kids in CHIP, said it too had recently learned it would soon receive “redistributed” funds, to the tune of nearly $22 million, which would enable it to run its program unchanged until the end of November, according to Heidi Capriotti, spokeswoman for the Arizona Health Cost Containment System, which runs the state’s Medicaid program and CHIP.

Utah has also said it expects to receive redistributed funds shortly, which Kolbi Young, a spokeswoman for the state’s Health Department said would enable the state to continue the program until the end of December. If Congress doesn’t act by then to resume CHIP funding, the program, which serves about 20,000 kids according to Young, would shut down, she said.

North Carolina, with a CHIP enrollment of more than 256,000, has not received redistributed funds, according to the state health department, and it too is expected to run out of funds this year.

Nevada, where nearly 69,000 kids are in CHIP, also expects the money to run out by the end of the year, according to Cody Phinney, a deputy administrator for Nevada’s Division of Health Care Financing and Policy.

“Without federal funding, the choices would be of course to find another mechanism to pay for those benefits,” meaning using state resources, Phinney said, “or wind those benefits down.”

Other states, where funding was expected to last into 2018, said they would continue CHIP as usual while hoping Congress acts before they have to make any decisions.

“The good news for Pennsylvania is that we have a few months here,” said Teresa Miller, acting secretary of the state’s Department of Human Services, “because our funding won’t end until February, and we are confident that CHIP will get reauthorized.”

But if Congress doesn’t act, CHIP programs around the country will be imperiled, according to the Kaiser Family Foundation, which analyzes health policy. For example, the nonprofit said, by state statute, the loss of federal funds would require West Virginia, like Utah, to terminate the program.

Arizona would be required to freeze enrollment. Other states might be forced to follow suit, Kaiser said. Unlike the Payment and Access Commission, Kaiser estimated that seven states in addition to the four listed above would run out of funding this year if Congress doesn’t act. But one of the seven, Mississippi, disputed that, saying it has enough CHIP funds to last through the end of April 2018, according to Erin Barham of the state’s Division of Medicaid.

Health policy experts credit CHIP and additional funding for the program included in the Affordable Care Act with helping to decrease the uninsured rate among children. Between 2013, the year before the ACA was implemented, and 2016, the share of kids without health insurance dropped from 4.8 to 3.8 percent. In 1996, the year before CHIP’s enactment, the uninsured rate among children had reached 14.8 percent, an all-time high.

Before the Senate became embroiled in the latest effort to repeal and replace the ACA, known as Obamacare, Republican Sen. Orrin Hatch of Utah and Democratic Sen. Ron Wyden of Oregon announced the outlines of a bipartisan deal to keep CHIP funded.

The proposal would have extended CHIP funding for five years, although it also would have gradually eliminated extra funding from the Affordable Care Act. Hatch is chairman of the Senate Finance Committee and Wyden its ranking Democratic member. Their committee’s extension passed this week and moves next to the full Senate, which returns from recess Oct. 16.

The House Energy and Commerce Committee, meanwhile, passed its own extension as well, and that bill goes to the House floor for a full vote.

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Michael Ollove

Michael Ollove covers health care for Stateline. Ollove worked for many years at The Baltimore Sun, as an enterprise reporter and an editor.