By Jocelyn Guyer
Today, we finally saw details of the continuing resolution to fund the federal government through the end of fiscal year 2011. One item that jumped out at us is a proposal to take $3.5 billion of the money that had been set aside for “performance bonuses” to reward states for enrolling kids in Medicaid. At first blush, it sounds alarming. Luckily, the reality is that there will still be enough money set aside for the performance bonus fund.
For those who need a quick refresher on the performance bonuses, they were established in the Children’s Health Insurance Program Reauthorization Act (CHIPRA) to financially reward states that succeed in significantly increasing the enrollment of uninsured children into Medicaid. To earn a bonus, states must implement at least 5 of 8 simplification measures and meet specific enrollment targets. In 2010, 15 states were awarded a total of $206 million in performance bonuses, more than double the total award of $75 million in 2009. Ten (10) of the states (AL, AK, IL, KS, LA, MI, NJ, NM, OR, and WA) had previously received bonuses in 2009, and 5 states (CO, IA, MD, OH, and WI) were first-time recipients. Since the program began, a total of $281 million has been paid out to states.
The performance bonus fund initially was financed through an appropriation of $3.2 billion. Each year, more money is added to the fund. Specifically, any funds that states don’t need to finance their CHIP program each year are set aside for the performance bonus fund. Since Congress took every step possible to make sure that states would not run out of CHIP funds, it allotted more than states have been able to use. As a result, there is more than enough money remaining in the performance bonus pool – even after the continuing resolution withdraws $3.5 billion – to finance bonus payments to each and every state in the country for the next three years at the highest level yet on record ($54 million to Alabama). And, while we hope every state earns a performance bonus, this is probably not realistic.
I come from a long line of worriers. But, even with this fundamental personality trait, I’m not even remotely concerned that we will run out of performance bonus funds. I am worried that some people will think we might run out of bonus funds and slow down efforts to qualify for them by adopting the proven simplification strategies and maximizing outreach efforts to enroll kids in coverage. In this context, it is critical to spread the word far and wide that there is more than enough money remaining in the performance bonus fund to reward each and every state that qualifies due to successful efforts to connect kids with health care coverage.
As for why the states have not used all of the CHIP funds made available to them, that is a question for another day. (Spoiler alert: Block grants are a very tough way to get the right amount of money to the right state at the right time to meet health care needs.)
