ADEA State Update

Congress Failed to Reauthorize CHIP Funds by Deadline, Putting States in Limbo

(Insurance, Medicare and Medicaid, Federal Policy, CHIP) Permanent link   All Posts

KidOralExamCongress failed to reauthorize funding for the Children’s Health Insurance Program (CHIP) by the Sept. 30 deadline, thus allowing funding to lapse. CHIP is funded jointly by states and the federal government. Although CHIP benefits are different in each state, all states provide comprehensive coverage, including dental and vision care, routine check-ups, immunizations and prescriptions for 8.9 million children.

Most states have enough money remaining from the last appropriation to keep children insured under CHIP through the end of the year. Ten states are expected to exhaust their funding by the end of 2017, and 22 will do so within the next six months if funding is not reauthorized by Congress. Virginia’s governor issued a press release on Oct. 5, stating that the Commonwealth plans to issue CHIP termination notices to parents at the end of November if Congress has not taken any action by then to reauthorize CHIP funding.  

On Sept. 13, the National Association of Medicaid Directors (NAMD) sent an urgent message to congressional leadership asking them to make CHIP reauthorization a priority. In the letter to Congress, NAMD stated:

“Should Congress either reduce CHIP allotments or reduce or eliminate the 23-percentage point enhancement in federal match, states will be left with significant funding shortfalls. Most states will not be in a position to fill such a shortfall without either seeking to shift funds among line items or making supplementary budget requests to their legislatures, which may in turn lead to special sessions to address CHIP funding.

State legislatures will face a difficult task in finding additional funds in this scenario. States whose CHIP programs are fully funded by the federal government (due to the enhanced Federal Medical Assistance Percentage (FMAP)) have no mechanism for funding the program should federal funding commitments change on short notice. States that pay a state share of CHIP spending, would see a significant increase in unanticipated and unplanned-for state spending.”

On Oct. 4, congressional committees advanced two CHIP reauthorization bills. The Senate Finance Committee passed the Keeping Kids’ Insurance Dependable and Secure (KIDS) Act (S. 1827) by voice vote. Additionally, the Energy and Commerce Committee advanced the Helping Ensure Access for Little ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable (HEALTHY KIDS) Act (H.R. 3921). 

The Henry J. Kaiser Family Foundation released an issue brief comparing the two bills. Both the current Senate and House versions:

  1. Extend CHIP funding for 5 years.
  2. Phase out the 23-percentage point enhanced match by 2021.
  3. Extend the state maintenance of effort requirement for children below 300% of the federal poverty level.
  4. Extend express lane eligibility.

However, several key differences between the two bills remain. 

The House version provides $1 billion in Medicaid financing to Puerto Rico and contains details regarding offsets (how CHIP will be paid for), but the Senate version currently contains no such language.

ADEA Advocacy and Government Relations will keep you updated on the status of funding reauthorization for this critical program.

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