Suffer the Children: Congress jeopardizes CHIP funding


It has been almost two months now since Congress allowed the Children’s Health Insurance Program (CHIP) to expire at the end of September.

As Joan McCarter at Daily Kos recently noted:

This is unprecedented. It’s obscene and unconscionable. Never before has Congress allowed funding for children’s health and community health center expire—even when they were playing games with debt ceilings and government shutdowns, Republicans funded health care for kids and for the underserved. Not this year, not when they have tax cuts for rich people and corporations to focus on.

When last we visited this controversy, Tea-Publicans in Congress were holding CHIP funding hostage as leverage in their never-ending sabotage of “Obamacare.”

Earlier this month, House Passes Children’s Health Insurance Bill, But Kids Are No Closer To Health Insurance:

The House passed a bill Friday reauthorizing the lapsed Children’s Health Insurance Program. But instead of a bipartisan affair that Democrats and Republicans could pat themselves on the back for, the bill became a partisan fight over offsets that ultimately moves Congress further away from renewing CHIP.

The bill that passed Friday 242-174 ― with 227 Republicans and 15 Democrats voting yes, and 171 Democrats and 3 Republicans voting no ― almost certainly won’t become law. Instead, Congress will likely wait for an end-of-the-year spending bill to reauthorize the program, which covers roughly 9 million low-income children and pregnant women.

According to Democrats, the problem with the bill, which would extend CHIP for five years and reauthorize community health centers and other public health programs for two years, is that it would pay for children’s health insurance by taking money from a preventive care fund. The GOP bill would also use new Medicare means-testing to partially pay for CHIP.

The ranking Democrat on the Energy and Commerce Committee, Frank Pallone of New Jersey, blamed Republicans for spending nine months trying to repeal the Affordable Care Act.

“Now House Republicans are using the reauthorization of CHIP and community health centers as a way to once again sabotage the ACA,” Pallone said.

He said that by taking this route, House Republicans were guaranteeing CHIP wouldn’t be reauthorized until the end of the year, because Senate Democrats wouldn’t go along with this bill. And Pallone criticized Republicans for trying to undermine the ACA Prevention Fund, which helps pay for immunizations and research into preventing diseases like diabetes and Alzheimer’s.

Most states have had enough money left over to carry CHIP until the end of the year, some even well into next year, but children from some states face the possibility of losing their health insurance soon if Congress doesn’t act.

Which leads to this report today in the Washington Post. States prepare to shut down children’s health programs if Congress doesn’t act:

Officials in nearly a dozen states are preparing to notify families that a crucial health insurance program for low-income children is running out of money for the first time since its creation two decades ago, putting coverage for many at risk by the end of the year.

Congress missed a Sept. 30 deadline to extend funding for CHIP, as the Children’s Health Insurance Program is known. Nearly 9 million youngsters and 370,000 pregnant women nationwide receive care because of it.

Many states have enough money to keep their individual programs afloat for at least a few months, but five could run out in late December if lawmakers do not act. Others will start to exhaust resources the following month.


The looming crunch, which comes despite CHIP’s enduring popularity and bipartisan support on Capitol Hill, has dismayed children’s health advocates.

“We are very concerned, and the reason is that Congress hasn’t shown a strong ability to get stuff done,” said Bruce Lesley, president of Washington-based First Focus, a child and family advocacy organization. “And the administration is completely out, has not even uttered a syllable on the issue. How this gets resolved is really unclear, and states are beginning to hit deadlines.”

Others paying close attention to the issue remain hopeful that Congress will extend funding before January, but states say they cannot rest on hope.

“Everybody is still waiting and thinking Congress is going to act, and they probably will, but you can’t run a health-care program that way,” said Linda Nablo, chief deputy director at Virginia’s Department of Medical Assistance Services. “You can’t say ‘probably’ everything is going to be all right.”

Most CHIP families, who earn too much for Medicaid but too little to afford private insurance, are not aware lawmakers’ inaction is endangering coverage. They’re about to find out, though. Virginia and several other states are preparing letters to go out as early as Monday warning families their children’s insurance may be taken away.

The Centers for Medicare and Medicaid Services (CMS), which administers the program at the federal level, issued a notice to state health officials on Nov. 9 detailing their options if CHIP funding does run dry. States forced to end the program will need to determine whether enrolled children are eligible for Medicaid or whether their family will need to seek insurance through an Affordable Care Act marketplace, the guidance said.

* * *

The program, which is credited with helping to bring the rate of uninsured children to a record low of 4.5 percent, has been reauthorized several times over the years. And under the ACA, the federal government sharply boosted its match rate. It now provides 88 percent or more of every state’s CHIP costs.

Congress has been unable to agree on how to pay for the $15 billion program moving forward, however. President Trump’s 2018 budget proposed to cut billions from CHIP over two years and limit eligibility for federal matching funds.

The uncertainty has states scrambling. Arizona, California, Minnesota, Ohio, Oregon and the District of Columbia will run out of CHIP money by Dec. 31 or early January, according to Georgetown University’s Center on Children and Families. At least six more plan to take some sort of action to address the potential funding loss, including notifying parents their children are at risk of losing coverage.

Some states operate CHIP as an independent program and would have to shut theirs down if federal dollars dry up. In Virginia, resources are expected to be exhausted by late January. Nablo said she has no choice but to send notices Dec. 1 to the families of the 66,000 children and 1,100 pregnant women in the state who are covered.

Texas plans to notify families in January that the program could end. Funding problems there were exacerbated by Hurricane Harvey because the state asked the federal government that it be allowed to waive co-pays and enrollment fees for CHIP children in counties declared disaster areas. With less money coming in, funds could be exhausted even sooner than the state first projected, according to Christine Mann, spokeswoman for the Texas Health and Human Services Commission.

In West Virginia, where CHIP funds are expected to run out in March, officials overseeing the program voted this month to shut it down Feb. 28 if Congress hasn’t acted.

Other states, including Maryland, developed their CHIP program as an extension of Medicaid and so are required by law to find a way to keep it going. The same applies to the District, which will need to come up with as much as $12.5 million in local funds to cover the approximately 14,000 children enrolled, the D.C. Department of Health Care Finance said. The agency will begin looking next month at where money can be diverted.

In Arizona, it was reported at the end of October that our Koch-bot Governor Ducey may tap rainy-day fund to keep health coverage for 23,000 Arizona kids:

Gov. Doug Ducey may tap the state’s “rainy day fund” to keep health-care coverage for 23,000 Arizona children until Congress finally acts.

* * *

Cash for CHIP ran out when the federal fiscal year ended Sept. 30.

In the interim, the federal Centers for Medicare and Medicaid Services has used unspent dollars from the just-ended budget year to keep the program alive. But Christina Corieri, the governor’s health adviser, said those funds are expected to dry up by the middle of December.

After that?

The Arizona law that accepts federal dollars for what is known in the state as KidsCare, spells out that if the federal government ultimately stops funding the program, the state has to stop enrolling children. That’s exactly what happened in 2010 when Arizona lawmakers decided they did not want to pay the state’s 25 percent share.

Lawmakers voted last year to reinstate KidsCare, but only after Congress agreed to pick up the full cost, as least through the end of the federal budget year. The most recent figures show 23,199 children enrolled.

It is the failure so far to approve the $15 billion annual appropriation to care for 9 million children nationwide going forward that again places health care at risk.

“We want to see KidsCare continued,” the governor said Tuesday after visiting children on Halloween at Phoenix Children’s Hospital. And Ducey said he has “every confidence” that Congress will act before the funds run out.

But the governor said the state has the ability to deal with circumstances “as they happen.”

* * *

What’s formally known as the “budget stabilization fund” (aka rainy day fund) currently has about $460 million.

That would more than cover any interim costs. In September, the state received $6 million in federal funds for KidsCare.

But with increasing enrollment since the freeze was lifted, the governor’s office pegs the cost for October through December at $20 million.

Ducey, however, would need legislative approval to shift around those dollars.

An aide to House Speaker J.D. Mesnard said his boss does not want to comment until he sees more details. There was no immediate response from Senate President Steve Yarbrough.

Ducey’s staff is exploring another option, one he may be able to do on its own. It is based on doing a bit of shifting of dollars — and children — among programs.

The Arizona Health Care Cost Containment System, the state’s Medicaid program, covers individuals and families earning up to 138 percent of the federal poverty level.

But here’s the thing.

The federal government pays about two-thirds of the cost of those up to the federal poverty level. But under the Affordable Care Act, the feds pick up the entire tab for those in the 100 to 138 percent range.

Corieri said while waiting for Congress to act, the state could pay to cover all the children in that 100 to 138 percent band from KidsCare to AHCCCS. She said each month the state makes that shift frees up enough money to cover everyone else for another three months.

And she said that when Congress finally does refinance the CHIP program it is likely to approve “backfill” dollars to reimburse the state for any funds it spent providing care in the interim.

* * *

Congress last year agreed to pick up the full cost [of CHIP]. But even then, Gov. Ducey was not interested in restoring KidsCare.

But he was outflanked when Rep. Regina Cobb, R-Kingman, attached restoration of the program to something Ducey and other GOP lawmakers wanted: changes to the program to allow more parents to use public dollars to send their children to private and parochial schools.

Enrollment has been climbing steadily since then, though it is not yet back to pre-freeze levels.

The legislation, however, has a provision requiring a new enrollment freeze if Congress ultimately fails to restore full funding.

You can see where this is going in the Arizona legislature. Without federal funding, KidsCare is on the chopping block, especially when the state has a looming budget deficit due to over-generous corporate welfare tax cuts. See earlier post, So how’s that trickle-down working out for Arizona? (The Arizona Legislature’s budget analysts predicted a budget shortfall that could top $100 million in the current and coming year as the impact of corporate tax cuts continues to overwhelm increases in sales, insurance premium and personal income tax collections.)

So where do things currently stand in Congress? The Post continues:

In Washington, lawmakers in both parties agree on the program’s merits but are at an impasse over how to pay for it. The House passed a bill this month along largely party lines to extend CHIP funding for five years in part by cutting an ACA prevention fund and raising Medicare rates for wealthier seniors.

That measure is unlikely to be taken up by the other chamber. Senators, led by Finance Committee Chairman Orrin G. Hatch (R-Utah), are working to find a bipartisan solution. Hatch was one of the authors of the original CHIP legislation in 1997. The other was Sen. Edward M. Kennedy (D-Mass.), who died in 2009.

“I am working with my colleagues to advance this bill in a fiscally responsible manner so we can ensure coverage is maintained,” Hatch said in a recent statement. Yet during a heated exchange last week in a committee meeting on the GOP tax overhaul, he voiced little urgency.

Back up your concern for the poor by starting with an extension for CHIP, Sen. Sherrod Brown (D-Ohio) told Hatch.

Hatch responded angrily, “I’m not starting with CHIP.”

So harumph! Sen. Orrin Hatch is having a snit and nothing is happening. Meanwhile, states will soon be running out of money for CHIP.

UPDATE: Arizona nears the bottom for worst states for child health care: The personal-finance website WalletHub recently released its report on 2017’s Best & Worst States for Children’s Health Care. Arizona ranked 49th.

For the full report, please see: