States Should Take Advantage of Enhanced CHIP Funding to Keep Kids Connected to Coverage

As we anticipate the end of the COVID-19 continuous coverage protection, we know it will take an all hands-on-deck approach to make sure that millions of children and low-income families don’t become uninsured at the end of the public health emergency (PHE). Public education, outreach, and consumer assistance will be critical to ensuring that children and families don’t slip through the cracks. Notably, states are required by law to conduct outreach to families of children likely to be eligible for CHIP, Medicaid, or other coverage. So, we decided to take a look at how states are investing in outreach and assisting families with enrollment through CHIP by examining the annual CHIP Financial Management reports for FY 2018 – 2020. Here’s what we found, as detailed in our new report:

  • Almost all states can boost outreach and consumer assistance without hitting the 10 percent cap on CHIP administrative expenditures. In fact, 40 states report CHIP administrative costs of 5 percent or less of total CHIP expenditures in 2020.
  • Fewer than one-third of states (13) reported outreach expenditures in 2020. Of those, only 11 states consistently reported outreach expenditures over the three-year period reviewed for our report.
  • States should focus more funding and resources on families of color and households with limited English proficiency. Despite much higher uninsured rates among Native American and Latino children, only one state (OR) reported outreach expenditures focused on American Indian and Alaska Native children, and only 1 in 4 states reported direct interpretation and translation costs to address language barriers.

We note in the report that states may include outreach expenses in their overall administrative costs, but without detailed accounting, it is unclear if or to what extent states are conducting outreach and meeting their statutory obligation. Moreover, a scan of CHIP State Plans and CHIP Annual Reports that should include a description and assessment of outreach activities suggests that, in many states, the content is incomplete or outdated. Without detailed reporting, it’s not possible to assess where or how well states are investing in outreach and supporting the needs of diverse families. This illustrates the need for both state and federal officials to take steps to ensure that state plans and the annual reporting accurately reflect current state outreach strategies and practices.

But back to the issue at hand. Using CHIP funds to assist with the unwinding of the continuous coverage protection is fiscally smart for states as the federal contribution to CHIP expenditures ranges from 65 to 85 percent compared to the 50 percent cost-share for Medicaid administrative costs. Moreover, states have been receiving an additional 4.34 percentage points in the CHIP match (up to 85 percent cap) throughout the pandemic. The bump in the federal matching rate will continue through the end of the quarter in which the PHE ends, but states can put that money to use now to develop communication materials, commence marketing and outreach campaigns, boost funding for navigators and assisters, and provide grants to community-based organizations that serve at-risk populations, including rural communities and families of color.

The pandemic and economic turmoil have taken a big toll on children and families and the impact will linger long after the public health emergency is lifted. States can cushion the blow by leveraging CHIP outreach funding to ensure no child eligible for public coverage falls through the cracks and becomes uninsured.

You can find state-by-state data and the full report here.

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