What Should Congress Do to Extend CHIP?

In February I wrote a blog entitled “Congress Must Act Quickly on CHIP” in which I expressed concern that Congress would not act quickly to extend funding for this vital and popular program. Now, almost two months later there has been no noticeable Congressional movement and virtually no discussion about the Children’s Health Insurance Program (CHIP). Congress has been very preoccupied with trying to repeal the Affordable Care Act.

In my view, extending CHIP could be a relatively easy bipartisan victory if Congressional leaders decided to move a bill that would keep the current successful Medicaid and CHIP partnership in place (more or less) to keep kids covered. As readers of SayAhhh! know well, CHIP and Medicaid have worked together to reduce the number of uninsured children to historic lows. Insured kids have better educational and economic outcomes as our recent report outlines.

The stakes are high — absent a CHIP funding extension and extension of the maintenance of effort (MOE), it is likely that children covered by CHIP today would become uninsured or be sent to the Marketplace for coverage, a risky and troubled proposition at best.

The uncertain future of the Marketplace coverage makes it even more likely that children would become uninsured without CHIP and raises the stakes for CHIP renewal. As a result, we at CCF believe CHIP funding and the MOE must be extended for at least five years.

To state the obvious, the current Administration and Congressional leaders dislike the Marketplace intensely — which means that instability is likely and complete collapse of the Marketplace is a real possibility. Even before the current challenges, Marketplace plans offered children a less affordable and robust source of coverage than CHIP, as reports from the Department of Health and Human Services (HHS) and the Medicaid and CHIP Payment and Access Commission (MACPAC) have made clear.

What Should Congress Do?

  • Extend CHIP funding, the MOE and the 23-percentage point increase in the CHIP match rate through fiscal year 2022; This will ensure stability for children and stability for states. It would be particularly problematic to reduce the CHIP match for states with short notice, which is what it looks like states are going to get now. In addition, short-term CHIP funding extensions make it very difficult for states to plan their CHIP budgets and operations.
  • Additional improvements to CHIP could be considered such as eliminating CHIP waiting periods, aligning CHIP premium policies with Medicaid. Waiting periods create more red-tape and force children to remain uninsured, which makes no sense. Premiums can also pose a barrier to getting kids connected with coverage as research has repeatedly shown.
  • Permanently extend the Express Lane Eligibility option. Express Lane is an important tool that seven states are using to simplify enrollment and reduce administrative costs in Medicaid and three states are using this option in CHIP. States should have this option going forward too.
  • Improvements could also be made to the Child Core Set of Health Care Quality Measures in order to better monitor the quality of care children in Medicaid and CHIP receive and reporting could be made mandatory, as my colleague Tricia Brooks has blogged

Many of these recommendations track with the recent recommendations of MACPAC, which called for a five-year CHIP extension with the bump and MOE in place. The Bipartisan Policy Center recently recommended that CHIP be extended for four years through FY2021 with the MOE in place and the CHIP bump extended for one year and then phased down.

The message is clear – Congress needs to act quickly to ensure that our nation’s historic achievement in reducing the number of uninsured kids is not threatened. In these times of turmoil, lets hope our leaders can get their act together to ensure that kids grow and thrive.

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy.