Arizona Children Most at Risk if Congress Fails to Renew CHIP

Sad little kid sitting on window shield

As the deadline to extend Children’s Health Insurance Program (CHIP) funding looms, states are in the difficult position of deciding what to do if new funds don’t materialize. As we’ve written before, Arizona is squarely in the crosshairs as the state whose children are most immediately at risk if CHIP funding is not renewed during a time of great uncertainty in the U.S. healthcare system.

As Say Ahhh! readers know, until the middle of last year, Arizona was the only state in the country without an active CHIP program. The state’s experience since 2009 with an on-again off-again CHIP program (known as KidsCare in Arizona) created confusion and insecurity among families whose children relied on the program and disruptions in their children’s health care. Enrollment dwindled from more than 45,000 in December 2009 to just over 500 in mid-2016.

When the 2015 Medicare Access and CHIP Reauthorization Act (MACRA) funded the Affordable Care Act’s 23-percentage-point bump in the CHIP match rate, Arizona’s match increased to 100 percent, providing a major incentive for Arizona to reopen KidsCare at no cost to the state. When KidsCare was reinstated in July 2016, the authorizing legislation made it clear that the state must reissue the freeze on KidsCare if federal funding declines below current levels.

In 2015, Arizona had the 3rd highest rate of uninsured children in the country. Since the state reinstated KidsCare in July 2016, more than 22,000 children have regained coverage. But Arizona’s improvement stands to do a U-turn if CHIP funding isn’t extended at current levels.

While it has the most to lose in the near-term, kids in other states are also vulnerable, as their state officials contemplate what to do in this time of uncertainty. Many have public notification requirements that take effect between 30 and 100 days before CHIP program changes are implemented. MACRA’s additional match matters to other states too—most are banking on the bump in their budgets.

Just as Arizona families experienced during the on-again/off-again KidsCare freeze, even the impression of ending coverage creates confusion and interruptions in children’s health care that could be easily avoided with a multi-year, fully funded CHIP extension. (Of course, given recent debates, it bears repeating that the strengths of CHIP rely on a strong Medicaid program, so maintaining Medicaid’s foundational structure and financing should be expected, period.)

During the ACA repeal debate, Governor Ducey and Arizona senators repeatedly claimed that any repeal effort should not “pull the rug out” from under Arizonans who gained coverage through Medicaid and the ACA marketplaces. Why would this standard not also apply to children in CHIP, who will lose coverage if funds are not renewed before September 30?

In part due to the KidsCare freeze, Arizona has the highest rate of children in the ACA marketplaces (20 percent compared to 9 percent on average), which are also volatile as we wait to see whether the administration will work to continue supporting them. If KidsCare is no longer available, Arizona children may also not be able to rely on marketplace coverage to meet their needs. (Not to mention, we know families in Arizona pay more for marketplace plans than in KidsCare, or may not even have access to financial help thorough tax credits, which would make access to health care out of reach for many families even in a strong marketplace.)

CHIP provides consistent, reliable coverage for millions of children even as questions remain about the future of marketplace plans. Arizona’s experience is a preview of what could happen in other states in the coming months and years without new CHIP funding. Just as the state is working to make up its losses, Congressional failure to extend CHIP in September could set children back yet again.

If Governor Ducey and Arizona’s Congressional delegation are serious about not disrupting healthcare for Arizonians, they should lead the chorus in exposing what’s at stake for Arizona children and others around the country. Children need certainty that the quality, affordable coverage that CHIP provides will remain solidly in place. Arizona policymakers should be on the front lines in the call for a quick, long-term extension of CHIP funding at current levels so that no child experiences disruptions in their healthcare.

Elisabeth Wright Burak
Elisabeth Wright Burak is a Senior Fellow at the Center for Children and Families

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