Several states and the Trump administration are fervently searching for stopgap measures to keep insurance for low-income children while Congress debates spending for the national program.
The Children’s Health Insurance Program expired Sept. 30, but Congress has been in no rush to fund the program since states aren’t expected to run out of funding yet. The Trump administration has taken steps to shore up states that will run out of funding soon as states try to figure out where to plug funding holes.
CHIP gives states block grants to fund health insurance for low-income children. States can carry over unused block grant money from federal fiscal 2017 to fiscal 2018, which started Oct. 1.
The Centers for Medicare and Medicaid Services has a national redistribution fund that has unused CHIP funding from previous years. CMS is working on a month-to-month basis to send redistribution funds to states that request it.
Five states have received redistribution funding: Minnesota, Arizona, Washington, California, and Oregon, according to an October report from the congressional advisory board Medicare and Chip Payment Advisory Commission.
Arizona and Minnesota are expected to run out of funds by the end of this year, MACPAC projected. Twenty-seven states and the District of Columbia are expected to run out in the first three months of 2018, 19 states in the third quarter, and two in the fourth quarter.
If the redistribution funds run out before Congress approves new money, Arizona plans to move money from a separate Medicaid program that covers low-income children, said Heidi Capriotti, a spokeswoman for the Arizona’s Medicaid program.
Minnesota is worried about what will happen if Congress doesn’t approve funding by Nov. 30.
Minnesota received $3.6 million in redistributed funds for October and $1 million for November. The state’s Department of Human Services told the Washington Examiner it didn’t expect to get any more redistributed funds.
Minnesota is worried about care once the redistributed funds run out, especially for pregnant women who are not eligible for Medicaid but are covered by CHIP. There is no fallback coverage for them other than emergency care, unlike low-income children who are required to be enrolled in Medicaid.
To cover the pregnant women if Congress doesn't authorize new CHIP funding by the end of November, the state will carry over funds from fiscal 2017 to fiscal 2018 that it hasn’t claimed for the costs for covering children on Medicaid.
However, that comes with a price.
Under federal law, any unused fiscal 2017 CHIP funding that is carried over to 2018 is reduced by one-third. CMS would recoup the money later in 2018, according to policy guidance from the agency released this month.
Minnesota's human services department told the Washington Examiner that this move means there would be a reduction to its state general fund.
While the state has talked with CMS about waiving the penalty, it is not clear that can happen since it is a statutory requirement.
It does not appear likely that Congress will approve funding by Nov. 30, especially since it is out next week for Thanksgiving.
Congress is mired in partisan disputes over how to fund CHIP. The House passed a bill, with major Democratic opposition, that would fund it by charging wealthy seniors higher Medicare premiums and raiding an Obamacare disease prevention fund.
Meanwhile, the Senate Finance Committee advanced its own version out of committee last month, but that version did not include any funding offsets. Talks over how to fund CHIP in the Senate have not produced any deal.
Congress could add CHIP funding to an end-of-the-year omnibus spending package, but lawmakers have not said if the funding offsets that drew widespread Democratic opposition in the House will be included.