As Congress Stalls on Children's Health Insurance, States Warn of Cuts

It's been almost two months since Congress let what's historically been a bipartisan program expire.
by | November 17, 2017
(TNS/Noam N. Levey)

The last time the Children’s Health Insurance Program (CHIP) needed to be reauthorized was back in 2015. That year, Congress took until April to approve the funding. It was the closest Congress had ever come to the program’s reauthorization deadline.

Until this year.

Fast forward to 2017, and the program has been expired for almost two months since Congress let the deadline pass on Sept. 30. 

“It was terrible then [in 2015], so the idea that it’s come and gone is just ... nobody could have predicted this,” says Linda Nablo, chief deputy director of the Virginia Department of Medical Assistance Services.

The Children’s Health Insurance Program -- which has a history of bipartisan support -- covers nine million children and pregnant women in families considered to be “working poor,” meaning they make too much money to qualify for Medicaid but can't afford insurance through the marketplace or their employer. It’s jointly funded by the federal government and states, but the feds foot about 80 percent of the bill.

The uncertainty about the program's future raises fears that states will have to freeze enrollment or end insurance coverage for some. 

Utah already submitted a request to the federal government to freeze enrollment in their program. Some states, including Nevada, have laws that force officials to freeze enrollment if federal funds decrease at all, according to Healthline.

Three states -- Arizona, Minnesota and North Carolina -- were scheduled to run out of CHIP money by the end of the year. Minnesota received $3.6 million in emergency federal funds that should last through the end of the year. Arizona Gov. Doug Ducey has floated the idea of dipping into the state’s rainy day fund if needed. And North Carolina Health and Human Services Secretary Mandy Cohen told North Carolina Health News that while there is currently no “drop dead date” to cease coverage, officials will start notifying people in January “that hard decisions could come.”

Colorado health officials have been among the most transparent about their situation: They posted a letter to residents online warning that if Congress doesn't act by the end of Monday, they’ll start sending notices to families that their coverage could be cancelled by the end of January.

A bill to reauthorize the program passed the House along party lines last month, but Democrats in the Senate say they won’t vote for it as is.

"If this bill is partisan, it will never become law. It will go to the Senate and sit there," U.S. Rep. Frank Pallone Jr., told CQ Roll Call.

At issue are provisions that would charge higher premiums to Medicare beneficiaries who earn more than $500,000, shorten the grace period people have to pay premiums on marketplace plans before they are kicked off from 90 days to 30 days and allow states to kick lottery winners off Medicaid.

“It’s fundamentally robbing Peter to pay Paul and just goes against the concept of bipartisanship,” says Tricia Brooks, a senior fellow at the Center for Children and Families at Georgetown University.

Twenty-seven states are expected to run out of money by the end of March if Congress continues to stall. One of those states is Virginia, where Nablo says they can pay for the program through the end of January. Beyond that, they’ll have to start making cuts.

Health officials, however, remain optimistic that the program will get reauthorized by Dec. 8, the last day Congress has to agree on a budget to fund the federal government before a potential shutdown.

In the meantime, “just sending out a notice can have a chilling effect,” says Brooks.

As more states send notices to families warning them about their coverage ending, people are likely to start putting pressure on the lawmakers on Capitol Hill.

“There’s this intense focus on the tax package, that it has to get done. I just wish they’d see CHIP as a starting point," she says. "If we can’t protect children’s health insurance, what does that say about our values?”