Government Shutdown – Where Does CHIP Stand?

I am not sure why I thought I would find it cathartic to write a blog on a Friday night explaining what we know about where things stand on CHIP. It’s been hard to listen to all the political grandstanding as the government shutdown looms. I looked up the first blog I wrote saying that Congress needed to act quickly and renew CHIP funding in a bipartisan way. It was almost a year ago.

My colleagues and I have spent a lot of time trying to keep track of what states are doing and writing reports about what will happen if and when funds run out. Our most recent report released on January 10th projects that 24 states could run out of CHIP funds in March. Earlier this week, MACPAC released new estimates with more recent data that project similar results: 28 states could run out of funds by the end of March. As we pointed out in our report, it is difficult to make solid predictions given that a number of variables will impact how far states can stretch their limited allocations and how long the pool of redistribution funds can cover state shortfalls.

Both reports caution that a March date does not mean that states have sufficient funds to fully cover March expenditures. Thus, states will start taking action such as sending notices to families before their money runs out. If Congress doesn’t extend funding by late January, we would not be surprised to see states taking some action around February 1st.

There was a burst of action by some states in December before Congress passed the December 22nd continuing resolution (CR) patch. Let’s assess where some of those states appear to be now with the funds that were allocated then. NOTE: Some have misinterpreted the CR language to assume that all states are funded through March 31st – that is not necessarily true though it is a possibility. The amount of funding reflects what was already in the CBO baseline for the first two quarters of FY 2018 hence Congress didn’t have to come up with an offset to do this.

Back to the question of where states stand …. First, and most importantly, remember that the children who are at risk of losing coverage this year are not all nine million kids in CHIP but those who are enrolled in separate state CHIP programs. The largest of these separate state CHIP programs are in Texas, New York, Pennsylvania, Illinois and Florida. The majority of children in CHIP are enrolled in Medicaid and these children are protected from eligibility rollbacks by the “maintenance of effort” provision of the ACA.[1]

For states with children enrolled in CHIP funded Medicaid the loss of federal funds results in unanticipated state budget hits. These states still draw down some federal funds for these kids (i.e. their regular match rate) but lose the enhanced CHIP match (the differential between the higher CHIP match and Medicaid match). A few states (Oregon, Minnesota, Colorado – see below) have already moved to make state funds available for a short-term period to ensure that kids don’t lose coverage – assuming they will be paid back when Congress eventually funds CHIP.

Arizona, like many states, has a combination program and the state’s Governor has indicated they are trying to stretch state and federal funds as best they can, but their ability to do so is unclear.

Let’s turn now to states that have already informed families that they might have to close enrollment. The bottom line is that most of these states have backed off on immediate plans in light of the patch, but my guess is we will hear more from a number of them soon if Congress doesn’t act.

Alabama: The state had announced plans to freeze coverage on January 1st and stop coverage on February 1st; their website indicates post 12/22 patch that this will not happen but gives no further information.

Colorado: Colorado was one of the first states to take action and notify families that coverage may be ending. The state’s website has been updated to say that a state appropriation secures coverage until the end of February but says it is too hard to predict after that..

Connecticut: This is the only state that has actually taken action – enrollment was closed during the week between Christmas and New Year’s. This was a poignant example of how states can’t turn on a dime. The state’s website has been updated to say that coverage will continue through the end of March.

Florida: The Healthy Kids program tweeted on January 12th that they have money through the end of March as a result of the CR patch.

Utah: Utah came out early saying they were worried they would have to shut down their program, now the website says CHIP is funded there through the end of March.

Virginia: Virginia is one of the few states that actually sent out a letter telling families their coverage might end at the end of January. The website now says coverage is assured only through February.



[1] States must keep their income eligibility standards that were in place as of March 23, 2010. California switched its CHIP program to Medicaid after that date so the MOE does not apply. This is of course a large number of children – almost two million of the over five million in CHIP funded Medicaid.

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.