States Say They Will Run Out of CHIP Funds Faster than Projected; Will Congress Act in Time?

Ten states project they will run out of CHIP funds before the end of 2017 according to a new brief released by the Kaiser Family Foundation (KFF), based on responses from 42 states during the KFF’s annual Medicaid budget survey. The ten states are: Arizona, California, Connecticut, Hawaii, Idaho, Mississippi, Nevada, Oregon, Pennsylvania and Utah. Importantly, this is more the double the number of states projected to exhaust their carryover funds by MACPAC before the end of the year. This is significant because some policymakers feel there is no need to rush to extend funding for CHIP because all states have some carryover funds.

Projecting how long funding for CHIP will last is a moving target as circumstances change. Take Texas and Florida, for example. No doubt the devastation wreaked by hurricanes Harvey and Irma will boost the need for coverage for children whose family’s income and employment have been impacted by these disasters.

As I noted in my recent Health Affairs commentary, states are getting increasingly nervous despite assurances from Capitol Hill that CHIP will be funded. While most states have yet to begin to make program changes in hopes that Congress will act, several states are poised to take action soon based on interviews of just a handful of CHIP programs interviewed by Kaiser and CCF in the new brief.

Several states told CCF and the Kaiser Foundation in telephone interviews that their state will soon begin notifying families that their children will lose coverage. For example, Nevada expects to run out of funds by late November/early December and may notify families by November 1 (a mere five weeks from now) that coverage will end November 30. State laws in Arizona and West Virginia, along with Colorado for a portion of its CHIP enrollees, make CHIP coverage contingent on federal funding. West Virginia is in the process of getting a legal interpretation of whether that means October 1, assuming there is no new federal funding for CHIP, or when the state exhausts any carryover funds in early 2018.

The National Association of Medicaid Directors (NAMD) also sent a letter to key policymakers outlining the challenges that states will face if funding for CHIP is not extended by September 30. I noted these same issues in this earlier blog. And what about those states that rely on express lane eligibility (ELE) authority to enroll and renew children’s coverage in a highly effective way of using data from other programs like SNAP? As I explained in this blog, state flexibility to use ELE also expires on September 30.

While some states may be holding their breath waiting on Congress, others are readying the changes they will need to make if CHIP is not renewed in a timely manner. Families need the peace of mind that certainty of coverage for their children offers. And states need certainty that the federal government will step up to extend CHIP. Given the seemingly endless efforts in Congress to drastically cut Medicaid, it’s understandable that states and families are wondering not only when, but if Congress will act.

Tricia Brooks is a Research Professor at the Center for Children and Families (CCF), part of the McCourt School of Public Policy at Georgetown University.