CHIP and COVID-19 Response

Yesterday, I blogged about my favorite provision in the Families First Coronavirus Response Act that requires states to freeze disenrollment in Medicaid through the duration of the public health emergency in order to receive the 6.2 percentage point bump in the state’s regular federal Medicaid matching rate (FMAP). Sadly, the disenrollment freeze does not apply to separate CHIP programs such as those in states like Florida, Texas, Pennsylvania, and New York. But, we thought it would be helpful to revisit current CHIP requirements and what more states can do to align CHIP with some of the strategies required or recommended in Medicaid to help states address the pandemic.

The FMAP bump increases the CHIP match rate as well, but not by the full 6.2 percentage points. As my colleague Edwin Park notes in this blog, the enhanced CHIP match rate is based on the Medicaid FMAP rate. This means the 6.2 percentage point bump in Medicaid translates into a 4.34 percentage point bump in the CHIP matching rate for all states. Currently, the maximum CHIP matching rate is 100 percent but it drops to 85 percent in 2021. At that point, a few states will hit the 85 percent maximum and not be able to take advantage of the full 4.34 percentage point boost to CHIP matching rates.

Children enrolled in CHIP-funded Medicaid expansions are fully protected by the Families First Medicaid provisions and cannot be disenrolled as of March 18th. States have the option to use CHIP funds to expand Medicaid (aka M-CHIP), operate a separate program, or a combination of the two. M-CHIP programs must adhere to all the Medicaid standards and requirements, including those newly enacted in Families First, with one exception – the child must be uninsured at the time of enrollment. (To see eligibility levels for Medicaid, M-CHIP, and separate CHIP programs, as well as other policies, see the annual Medicaid and CHIP Eligibility, Enrollment, Renewal, and Cost-Sharing Policies.)

The existing “maintenance of effort” (MOE) provision protects children in separate CHIP programs from red tape enrollment barriers and higher premiums. Children enrolled in CHIP are protected through an MOE that was extended when Congress funded CHIP through 2027. Like the Families First MOE that applies to all Medicaid groups, states may not implement new eligibility restrictions or red tape barriers to coverage. Nor can they raise premiums beyond adjusting for the rate of inflation unless routine updates were previously approved in the state’s CHIP plan.

Families First requires coverage of COVID-19 testing in CHIP without cost sharing. The new law only requires state CHIP programs to cover COVID-19 testing without cost-sharing. However, the Families First Medicaid MOE requires states to cover both testing and treatment for COVID-19 without cost-sharing.

States have options to align CHIP with Medicaid and strengthen their programs during this public health and economic crisis:

  • States may transition their separate CHIP programs into Medicaid. Doing so provides children with the full array of EPSDT benefits and stronger cost-sharing protections. Operating CHIP as a Medicaid expansion makes coverage between the two programs seamless for families by applying the same program rules and using the same provider networks and delivery systems. This policy option may be more administratively efficient and cost-effective for states by eliminating the need to operate two distinct programs. Thirty-five states still operate separate CHIP programs.
  • States may request that CHIP renewals be postponed during the public health emergency to align with the disenrollment freeze in Medicaid. This will help keep kids enrolled and allow eligibility workers to focus on the influx of new applicants.
  • States may waive or eliminate premiums and lockouts for nonpayment, as well as cost-sharing. Low-income families are also experiencing economic stress with parents losing hours or being laid off. Eliminating premiums and cost-sharing has multiple benefits. It will help families, eliminate the cost of administering premiums and lockouts, and remove the burden on providers to collect copayments and other cost-sharing at a time they should be focused on providing health care services. Twenty-six of the 35 separate CHIP programs currently require annual enrollment fees or monthly or quarterly premiums, and nine states have lockout periods ranging from 1 month to 90 days. Twenty-two separate CHIP programs also impose cost-sharing on children.
  • States should stop conducting any “behind-the-scenes” periodic reviews of eligibility. This will also promote continuity of coverage during the pandemic and free up eligibility workers to focus on getting newly eligible individuals into coverage. Almost two-thirds of the states access electronic data sources to identify potential changes in circumstances between renewals.
  • States should eliminate CHIP waiting periods. While CHIP coverage is limited to uninsured children, there is no requirement for children to be uninsured for a period of time before enrolling in CHIP. A number of states have eliminated waiting periods since the ACA was enacted but 13 states still require that a child be uninsured up to 90 days before enrolling in CHIP.

These strategies can be adopted through a CHIP state plan amendment (SPA); waivers are not necessary for these and many other changes. If states wish to implement temporary adjustments to enrollment and redetermination policies and cost-sharing requirements, they may do so by submitting a CHIP Disaster Plan Amendment. To enact such changes on an ongoing basis will require a regular SPA or an update to the state’s verification plan.

Among the key lessons learned since CHIP was enacted in 1997 is the importance of coordinating Medicaid and CHIP to provide a seamless continuum of coverage for children. The strategies noted herein are just a sampling of steps states can take to protect children and families while aligning Medicaid and CHIP. Stay tuned for additional blogs on these and other actions states should consider as the U.S. comes to terms with the greatest public health emergency in a century.

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.