Politics

States Face Children’s Health Coverage Uncertainty

Federal funding could soon run out

Oregon governor Kate Brown recently wrote to her state’s two Democratic senators warning that federal funding for the Children’s Health Insurance Program will  run out in December. (Photo by Scott Olson/Getty Images)

About two months after federal funding lapsed for the Children’s Health Insurance Program, state officials still don’t know exactly when they’ll run out of money or when Congress will renew funding — leaving families that depend on the program increasingly anxious about their benefits.

At least a few states say that they could exhaust funds as soon as next month. States are growing more concerned about the program with just a few days left on the congressional calendar until December and no signs that lawmakers plan in the immediate future to renew funding. 

Changes in enrollment and unpredictable circumstances such as the recent hurricanes make it difficult to know exactly how quickly states’ funds will run dry. The lack of action in Congress could lead to unpleasant holiday season letters for families.

Colorado plans to send informational notices about the potential end of the program starting the week of Nov. 27. These letters will tell families that the program may end at the end of January if Congress does not act. That would be followed by coverage termination notices at the end of the year confirming that coverage could end, said Rachel A. Reiter, external relations division director for the Colorado Department of Health Care Policy and Financing.

 Even if Congress acts in early December, states will face a time crunch.

“We have to recognize that states need time to implement change,” said Samantha Artiga, director of the disparities policy project at the nonpartisan Kaiser Family Foundation. 

December Deadlines

 

To help states get by, the Centers for Medicare and Medicaid Services has sent millions of dollars in recent weeks to 14 states and territories that came from reallocating unspent CHIP funds from prior fiscal years. The recipients include American Samoa, Arizona, California, District of Columbia, Florida, Guam, Massachusetts, Minnesota, Northern Mariana Islands, Oregon, Pennsylvania, Utah, Virgin Islands, and Washington.

 

But those temporary funds won’t last forever.

States that say they may face a funding shortfall by the end of December include Oregon, Arizona, California, Minnesota, Ohio, and Washington.

Oregon Democratic Gov. Kate Brown wrote a letter Tuesday to her state’s Democratic senators, Finance Committee top Democrat Ron Wyden and Jeff Merkley, saying that the state would run out of federal funding in December.

“While analysis by national policy outlets shows that Oregon funding does not run out of funding until January 2018, the Oregon Health Authority has recently informed me that our state’s federal funding for the program will be exhausted in December,” she wrote.

“The clock is ticking on CHIP, and states like Oregon are running out of time,” Merkley said in a statement. 

A Wyden spokesperson said the senator “remains optimistic common sense and decency will prevail over partisan politics.” He co-wrote a bipartisan bill that the Finance Committee approved in October, but Senate GOP leaders have not scheduled it for a floor vote or signaled that it would be added to other bills.

The House passed its CHIP legislation earlier this month, mainly on party lines. Democrats largely opposed the bill due to differences on the offsets.

One challenge in assessing the risks for individual states is that additional CMS money could forestall a crisis. Conversely, additional spending needs could accelerate states’ funding expiration dates.

“The projection of when states are going to specifically exhaust funds has been a bit of a moving target,” Artiga said.

Losing Funding ?

Arizona is one of the states that officials say is in danger of shutting down if more funds do not come through. Arizona became the only state without a CHIP program in operation in 2010, when it closed the program due to budget issues. The program reopened in 2016.

Heidi Capriotti, public information officer for the Arizona Health Care Cost Containment System, said that funds will likely last into December.

Last month, Arizona’s governor wrote to his congressional delegation urging members to act on CHIP quickly. He also hinted at possible temporary solutions, including tapping the state’s rainy day fund, if Congress does not act.

California is another state watching Congress closely. California cannot freeze enrollment or end the CHIP program for most families even if there is no new federal funding because of the way the state structured its program. But California could end benefits for about 2 percent of the people in its program.

“If CHIP is not reauthorized, the governor and legislature would need to deliberate on how to address the population no longer eligible for federal funding,” said Anthony Cava, spokesman for the California Department of Health Care Services.

Cava said that California anticipates its federal CHIP funds will be exhausted in late December 2017 or early January 2018.

“DHCS does not have an exact date because CMS has indicated it will provide monthly allotments from unused CHIP funds from other states from the year prior until they run out,” he added.

Similarly to California, Ohio cannot freeze enrollment or end the CHIP program even if there is no more federal funding. The state may have to cut other programs or find other revenues to keep CHIP going.

“The failure of Congress to reauthorize the CHIP program means federal funding for the program in Ohio could run out by the end of calendar year 2017,” said Brittany Warner, acting communications director for the Ohio Department of Medicaid. This projection assumes that Ohio will not benefit from the redistribution of unspent CHIP funds.

Minnesota state officials have been publicly asking for a swift renewal of federal funds since at least September. Since then, Department of Health and Human Services Commissioner Emily Piper worked with CMS to secure temporary federal funding “to ensure that coverage would continue for all CHIP recipients without penalty for 1-2 months,” Piper said in a letter at the end of October. However, she said that even with this funding, Minnesota will lose some federal matching grant money, which costs the state budget about $6 million per month.

Washington exhausted its CHIP allotment at the end of September. But the state got redistribution funds and anticipates receiving additional funding for December, said Amy Blondin, chief communications officer for the Washington State Health Care Authority, in an email.

Blondin says the state hopes that Congress will renew funding no later than December.

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