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- New Brief Explains CHIP Extension and Other Provisions Included in HEALTHY KIDS and ACCESS Acts
In This Report:
Introduction
On January 22, 2018, Congress passed a Continuing Resolution (CR) that included the Helping Ensure Access for Little Ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable Act (HEALTHY KIDS Act) funding the Children’s Health Insurance Program (CHIP) for six years.1 Just over two weeks later, on February 8, 2018, Congress passed another CR with many different health care provisions attached, including four more years of CHIP funding in the Advancing Chronic Care, Extenders, and Social Services (ACCESS) Act.2 This brief provides context for the CHIP funding extensions and summarizes the provisions impacting children in low-income families in the HEALTHY KIDS and ACCESS Acts.
Historic Gap in Federal CHIP Funding
No new federal funding for CHIP was available after September 30, 2017. From October 1, 2017 until January 23, 2018, states relied on a combination of carryover funds, redistribution funds, and a partial fiscal year 2018 allotment Congress made available in late December to keep their programs open. Carryover funds—unused CHIP allotments from fiscal year 2017—helped some states cover the funding gap for longer than others. In October and November 2017, states that ran out of carryover funds relied on redistribution funds—a pool of unspent money from other states the Centers for Medicare & Medicaid Services (CMS) distributed proportionally based on the state’s expected shortfall.
In December 2017, Congress passed two CRs with changes to CHIP funding. The first CR (P.L. 115-90) changed the redistribution formula. The original redistribution formula required CMS to distribute funding to states with federal funding shortfalls on a proportional basis so that all states would receive some new funding once their existing funding ran out. Under the new formula, CMS redistributed more money to emergency shortfall states—those states projecting shortfalls in the first quarter of fiscal year 2018— beyond the state’s proportional share. This left less money for states with later shortfalls but all states were still eligible for some redistribution dollars.3 The second CR (P.L. 115- 96) added $2.85 billion in new CHIP allotment funding and changed the redistribution formula again. Each state received some new allotment dollars, though not enough to cover projected expenses for very long.4 Under the newly revised redistribution formula, CMS no longer reserved redistribution funding for any state, instead paying out redistribution dollars on a monthly “first-come, first-served” basis to states experiencing shortfalls.5
Full Brief
- See P.L. 115-120. The CHIP-related provisions are in “Division C – HEALTHY KIDS Act.” Note that the freestanding bill by the same name also included other policies such as delaying the reduction in Medicaid disproportionate share hospital (DSH) payments, some funding for Puerto Rico and the US Virgin Islands following hurricanes in the region, and offsetting provisions to pay for the spending policies. Notwithstanding these differences, we refer to the CHIP funding extension and related provisions as the HEALTHY KIDS Act in this brief.
- See P.L. 115-123. The CHIP-related provisions are in “Division E – Advancing Chronic Care, Extenders, and Social Services (ACCESS) Act.”
- For more information about state funding projections following the first
CR, see “When Will CHIP Funding Run Out?,” available at https://ccf.georgetown.edu/wp-content/uploads/2017/12/20171220_PressRelease_CHIP.pdf. - CMS posted the preliminary allotment amounts which are available
at https://www.medicaid.gov/chip/downloads/financing/preliminaryallotments.pdf. - For more information about state funding projections following the second CR, see T. Brooks and J. Alker, Georgetown University Center for Children and Families, “When Will States Run Out of Federal CHIP Funds? (January 2018 Update),” available at https://ccf.georgetown.edu/wp-content/uploads/2018
