At Least 1 State Has Run Out of Federal Funding for Children's Health Insurance

by | November 27, 2017

By Michael Ollove

The state of Minnesota has run out of federal funds for its Children’s Health Insurance Program this month, requiring the state to contribute more of its own resources to keep the health plan in operation. It appears to be the first state to run out of federal funds for the program since Congress failed to meet a September deadline to reauthorize the program.

In Oregon, Democratic Gov. Kate Brown said this week that she is prepared to spend $35 million in state funds to keep the programming running when it runs through the last of its federal monies as expected in the next weeks.

Minnesota and four other states received leftover federal CHIP funding — about $4.6 million in Minnesota’s case — after the September deadline. However, the state Department of Human Services said that it had exhausted those funds this month. It is now making up the loss of federal CHIP funds with state monies, though the department was unable to say how much the state is now spending to make up for the loss of federal funds.

CHIP, which is jointly funded by the states and the federal government, finances health care for low-income children and pregnant women. The federal government had provided 88 percent of the funding for Minnesota’s CHIP program, which finances health care for about 125,000 children and 1,700 pregnant women.

Other states are expected to run out of CHIP funding in the next months, although not all will follow the path taken by Minnesota and Oregon, of investing state resources to make up for the loss of federal funds. By state law, some of them are required to shut down their CHIP programs if federal funding disappears. Colorado and Virginia have announced that they plan to send letters to the families of CHIP beneficiaries in the next weeks to alert them to the end of the program Jan. 31.

CHIP continues to enjoy bipartisan support in Congress, but that didn’t result in a reauthorization vote before the Sept. 30 deadline. Distracted by other issues, such as a Republican effort to repeal and replace the Affordable Care Act, Congress allowed the program to lapse. And it hasn’t made much progress since then. The House passed a CHIP bill, but included it in unpopular cuts to other programs. The Senate has yet to schedule a vote on its own CHIP bill.

Stateline | Nonpartisan, Nonprofit News Service of the Pew Center on the States | editor@stateline.org  |  @pewstates