With CHIP in limbo, here are 5 takeaways on the Congressional impasse
by Phil Galewitz, California Healthline

SACRAMENTO
December 4, 2017 10:36am
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•  CHIP has always had broad bipartisan support -- but

•  Impacts 1.3 million children in California


Lawmakers grappling with the failed repeal of the Affordable Care Act allowed authorization of the program to lapse on Sept. 30. Although CHIP has always had broad bipartisan support, the House and Senate cannot agree on how to continue federal funding. And the Trump administration has been mostly silent on the issue.

CHIP benefits 9 million children nationwide and 370,000 pregnant women a year, including an estimated 1.3 million children in California. It helps lower- and middle-income families that otherwise earn too much to be eligible for Medicaid. Like Medicaid, CHIP is paid for with state and federal funds, but the federal government covers close to 90 percent of the cost.

To keep the program going, states with unspent federal CHIP money have seen their excess sent to a handful of states running low on funds. But that is a bureaucratic band-aid; some large states are warning families they may not be able to rely on CHIP for much longer.

All told, CMS has given out $1.2 billion in redistribution dollars since October. To keep the program going would cost the federal government $8.5 billion over five years, the Congressional Budget Office estimates.

Saturday marks the 25th anniversary of Pennsylvania approving the original CHIP program, which served as a model for the national law, established in 1997. Since then, CHIP has been left in the fiscal lurch only once before. In 2007, CHIP went several weeks without funding authorization from Congress.

Here’s a quick look at what the shortfall may mean to daily life:

1. Are any kids hurting because Congress has failed to fund CHIP?

No. But states such as California will run out of money within weeks. That state alone accounts for nearly 15 percent of all children benefiting from CHIP. Without federal money, state programs could freeze enrollment or suspend operation. That’s unlikely to immediately happen in California for most CHIP recipients, however.

2. What are states doing since Congress missed the deadline?

Most states are doing little except looking for other unspent federal funds or asking the federal government to send some unspent funds from other states. But some, such as Colorado, are sending warning letters to beneficiaries to tell them that the program could soon end and to look for alternatives. This could mean exploring the ACA marketplace for coverage or researching if a child qualifies for Medicaid.

California, which leads the nation in CHIP enrollment, has received the lion’s share of CMS redistribution funds since October: nearly $692 million.

“Approximately 98 percent of the 1.3 million population now covered using CHIP funding would continue to receive coverage under the Medicaid program because of a legal obligation to cover them through September 2019,” said California Medicaid/CHIP spokesman Tony Cava. “If CHIP is not reauthorized, the governor and Legislature would need to deliberate on how best to address the population no longer eligible for federal CHIP funding.”

Mr. Cava said the state has not set a timetable for alerting CHIP recipients to possible changes “because of the evolving situation.”

Colorado said it has only enough CHIP funding to last through January and then the program, without federal dollars, will end.

Arizona officials announced Thursday that it will use Medicaid funding to fill in the shortage of CHIP dollars to extend the life of its CHIP program.

Virginia officials plan to send out a similar notice to parents of CHIP members by early this month.

Minnesota is keeping CHIP alive by paying the federal share with state funds.

In Oregon, Democratic Gov. Kate Brown recently said that she is ready to spend $35 million in state funds to keep CHIP running through December.

Nevada this week announced it had been approved for extra funding from the Centers for Medicare & Medicaid Services — nearly $5.7 million — which could keep CHIP alive through December and possibly January.

3. When is Congress likely to act?

Not sure. CHIP reauthorization could be included in an appropriations bill that Congress must pass to fund the government into 2018. (Congress now has funded the government through next Friday.) A “continuing resolution” bill would have to be approved by then to avert a government shutdown.

But we’re journalists, not prognosticators — and we have been wrong before. Most Capitol Hill observers expected a deal by the end of September.

4. If CHIP is so popular among Republicans and Democrats, what’s the problem?

There is little debate about its worth and value, but the momentum on CHIP was lost amid disagreements over the Affordable Care Act. The House did extend authorization with a vote —mostly along party lines — on November 3. The Senate itself has yet to vote. The Senate Finance Committee on October 3 approved a bipartisan bill to extend the program for five years.

The sticking point is not whether to keep CHIP running but how to raise the cash needed. The House agreed to charge higher premiums to wealthier Medicare beneficiaries, cut money from the ACA’s preventive health fund and shorten the grace period for ACA enrollees who fail to make monthly premium payments.

Like the House bill, the Senate committee bill eliminated an ACA provision to increase CHIP matching funds — to states — by 23 percent. The increased funding would continue through fiscal year 2019 and fall to 11.5 percent in fiscal year 2020. It would be cut entirely in the following fiscal year.

5. How does CHIP differ based on where you live?

CHIP income eligibility levels vary by state. About 90 percent of children who qualify are from families earning 200 percent of poverty or less ($40,840 for a family of three). CHIP covers children up to age 19. But states have the option to cover pregnant women.

California and 17 and states plus the District of Columbia do so. Depending on age, California children can qualify for CHIP if their family income is between 108 and 266 percent of the federal poverty level.

And some states call CHIP by different names. For example, it is known as Hoosier Healthwise in Indiana, PeachCare for Kids in Georgia and KidsCare in Arizona.

In California, most CHIP recipients are covered by Medi-Cal managed care plans.

This story was produced by Kaiser Health News, an editorially independent program of the Kaiser Family Foundation. It was edited to conform to CVBT style.

About the writer

Phil Galewitz covers Medicaid, Medicare, long-term care, hospitals and various state health issues. He has covered the health beat for more than two decades. He is a former board member of the Association of Health Care Journalists. In 2004/05, he was a Kaiser Media Fellow and wrote about community solutions to the uninsured. Before coming to KHN, he was at The Palm Beach Post and was a national health industry writer for the Associated Press and The Patriot-News in Harrisburg, Pa.

Senior Correspondent Barbara Feder Ostrov contributed to this report.


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