President’s Proposed Budget: Four More Years of CHIP

It would be great this Groundhog’s Day if Pensetucky Pete’s shadow also allowed us to forecast additional years of CHIP. But today we did get an important signal from the Administration that CHIP must remain a strong player in the system of children’s coverage for the foreseeable future. President Obama’s proposed budget included four additional years of CHIP— including an extension of performance incentive payments that expired last year—through 2019.  The budget also proposes that Express Lane Eligibility (ELE) become a permanent option for states and reinstates the performance incentives program to reward states that excel in enrolling eligible-but-unenrolled kids in Medicaid. To show their level of support for the urgent need to extend CHIP, it’s worth quoting directly from HHS’s FY2016 Budget in Brief (p. 99):

Extend CHIP Funding through FY 2019:  The Budget proposes to extend funding for CHIP for four years through FY 2019, to ensure continued comprehensive and affordable coverage for CHIP children. This proposal would also extend the contingency fund and the performance bonus fund authorizations through 2019. The proposal is paid for through an increase in tobacco taxes that will help reduce youth smoking and save lives.

This extension aligns with the Affordable Care Act requirement for states to maintain the eligibility and enrollment policies that were in place as of March 2010 through FY 2019 for children in Medicaid and CHIP. A four-year funding extension will provide budgetary stability to states. Continuing funding for CHIP will also protect children’s coverage and ensure continuity of care for families who rely on the program. Without Congressional action, CMS estimates states will begin to experience funding shortfalls in December 2015 and all but two states will run out of funding before the end of fiscal year 2016.

Once states exhaust their CHIP allotments, children in Medicaid-expansion CHIP programs would continue to be covered by Medicaid, though states would see a reduction in the federal matching rate for that population. While many children would be eligible for premium tax credits and cost-sharing reductions through the Marketplaces, some would transition to other forms of coverage, and others could become uninsured. Recent research also indicates that families with children transitioning from CHIP could face a substantial increase in cost-sharing, and a reduction of certain child-specific benefits, which may be particularly important for children with special health care needs.

HHS’s proposed budget also requests a number of other notable requests:

  • Extend the Medicaid primary care bump through December 2016 and extend to additional providers;
  • Create the state option to extend 12 month continuous coverage to adults (which they already have for children);
  • Require EPSDT for children in inpatient psychiatric treatment facilities;
  • Extend Transitional Medical Assistance (TMA) through December 2016 (currently set to expire March 31 of this year); and
  • Extend and increase funds for home visiting and other early childhood education programs.

While the proposed budget is just that—proposed—it will be interesting to see where Congress might agree on smart investments like Medicaid and CHIP that have demonstrated a positive impact on the lives of children and their families.

Elisabeth Wright Burak is a Senior Fellow at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.