If Congress Fails to Fund CHIP Before Holidays, Children Likely to Lose Coverage in New Year

Funding for CHIP expired on September 30th of this year. Despite bipartisan agreement in both the House and the Senate on a five year extension of CHIP, Congress has still not managed to get the job done. CHIP is a block grant program, which means that unlike Medicaid, Congress must act to ensure that it gets funded. This year is CHIP’s 20th anniversary and never before has Congress let CHIP funding lapse for this length of time. Moreover, we know that Congress is anxious to leave town having finished the tax bill, but they must act on a long-term CHIP extension before they go or children will start to lose coverage in January. As we head into this holiday season, families need the peace of mind that their children’s CHIP coverage is secure.

So far, because of unspent CHIP funds that are being redistributed, states have been cobbling it together as CMS has doled out one month increments to those states that have run through their CHIP allotments. The new analysis we released today looks at the impact of a short term “patch” that Congress passed on December 7th in the Continuing Resolution that expires this Friday. Here are some key findings:

  • First it’s important to clarify that Congress added no new money to CHIP on December 7th but merely rearranged which states got money when from the existing redistribution pot. As a result considerably more states (25) will actually run out of money by the end of January than previously expected. Our projections show that an additional nine states will run out by the end of January. Five states (GA, KS, KY, RI, and VA) have only just learned that their redistribution has been reduced and they only have enough money now to get through January. 
  • Also as a result, approximately 1.9 million children are at risk of having their CHIP coverage terminated during the month of January if Congress takes no action. We calculated this number by looking at states that are running out of money in January AND have separate CHIP programs. (This is important because states covering their CHIP kids through Medicaid are subject to a maintenance-of-effort requirement and must continue to cover them even though they will be receiving considerably fewer federal funds to do so). States who have only just learned of the latest funding rejiggering are scrambling to figure out what to do.

Another short-term patch this week would leave states in the dark as to how much funding they actually had until CMS analyzed the legislation and informed them of its consequences – something which won’t happen quickly over the holidays for sure. A short-term patch is not the way to go. As the Chief Deputy Director of Virginia’s Department of Medical Assistance Services Linda Nablo said today: “A short-term fix without adequate funding is not only useless, it’s dangerous.”

Congress has left states in an extremely difficult position with its inaction. State administrators are walking a tightrope and have no good choices until Congress acts decisively with a five-year extension. The five-year policy has been vetted and agreed to. It will solve states’ problems. It will ensure that families can go into the holidays knowing their child’s coverage is secure.

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.