Increased CHIP Matching Rates under House-Passed HEROES Act

The House-passed HEROES Act (H.R. 6800) would provide an additional one-year increase to the federal Medicaid matching rate (from July 1, 2020 through June 30, 2021), on top of the FMAP increase enacted as part of the Families First Act (P.L. 116-127).  As I have explained, the further FMAP increase, in turn, would increase the federal matching rates for the Children’s Health Insurance Program (CHIP) as well.  The combined impact of the Families First Act and the HEROES Act, if it was also enacted into law, would roughly provide an additional $2.4 billion in federal support for state CHIP programs through June 30, 2021.  The increased CHIP matching rate for each state would be as follows:

  • January 1, 2020 through June 30, 2020: 34 percentage point increase in each state’s CHIP matching rate for the second and third quarters of federal fiscal year 2020. Resulting CHIP matching rate may not exceed 100%.  See Table 1.
  • July 1, 2020 through September 30, 2020: 8 percentage point increase in each state’s CHIP matching rate for the fourth quarter of federal fiscal year 2020. Resulting CHIP matching rate may not exceed 100%.  See Table 2.
  • October 1, 2020 through June 30, 2021: 8 percentage point increase in each state’s CHIP matching rate for the first, second and third quarters of federal fiscal year 2021. Resulting CHIP matching rate may not exceed 95%.  See Table 3.

States may not fully benefit from the value of these CHIP matching rate increase if they do not have sufficient CHIP allotments to accommodate the increased CHIP matching rates in both fiscal year 2020 and 2021.  To ensure that states obtain the full benefit of the combined CHIP matching rate increases, the allotments for both years would also need to be adjusted accordingly.  (Note that the House-passed version of the HEROES Act, which incorporated a manager’s amendment to the introduced bill, exempted the CHIP matching rate increases from an 85% matching rate cap that would have otherwise applied in federal fiscal year 2021, so long as the resulting matching rate does not exceed 95%.  In addition, note that a previously scheduled 11.5 percentage point decrease in the CHIP matching rate takes effect in fiscal year 2021 and the state-specific matching rates in the attached tables account for that reduction.  As I have written, however, this matching rate cut should be delayed until the end of the COVID-19 health and economic crisis.  Such a delay would further increase the CHIP matching rates provided under the combined impact of the Families First Act and the HEROES Act.)

Edwin Park
Edwin Park is a Research Professor at the Georgetown University McCourt School of Public Policy.

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