States from Oregon to Massachusetts are scrambling to help millions of poor families whose children could lose coverage if Congress fails to reinstate a health insurance program that was approved two decades ago with bipartisan support.
The Children’s Health Insurance Program is on the brink of running out of money, and Congress has dragged its feet in passing a reauthorization bill since the program ended on Sept. 30. If lawmakers don’t pass a budget by Dec. 8, the federal government could shut down with the CHIP bill still in limbo.
That’s bad news for people like Yvette Lucas, a nurse and mother of two in Virginia, who worries that her 5-year-old son could lose coverage. He was born as a micro-premature baby, weighing in at under 2 pounds (900 grams), and was later diagnosed with cerebral palsy. His older brother needs weekly speech therapy, which is paid for by CHIP.
“I don’t know what I would do if I didn’t have it, what other families would do,” Lucas said. “These are working parents who are trying to make ends meet.”
Faced with many cases like Lucas’s, state governments and social-service agencies are lobbying lawmakers and drawing up contingency plans. Colorado has sent letters to CHIP recipients, warning that they could lose coverage. Idaho, Arizona and Oregon have found alternative revenue sources to fund their CHIP programs if and when money runs out.
Teresa Miller, acting secretary for Pennsylvania’s Human Services Department, said she believes Congress will pass a bill in time.
“I hope I’m right,” she said. “But if I’m not, we will be prepared to shut the program down.”
Congressional lawmakers support the program’s merits but have yet to agree on how to pay for it. A spokesman for Senate Majority Leader Mitch McConnell said in an email that “bipartisan work continues.”
While the failure to reauthorize CHIP would be massively disruptive, not all 9 million children in the program would lose coverage. When the act was passed in 1997, states could either make CHIP part of their Medicaid program, or they could set up a separate system just for CHIP. Most states did a combination of both.
Under the Affordable Care Act, states are required to maintain Medicaid CHIP programs until 2019, but if the bill isn’t reauthorized, they would receive a lower federal matching rate. Meanwhile, separate CHIP programs, which cover about 3.7 million children, would be terminated, unless states figure out a new source of funding. The Kaiser Family Foundation, a nonprofit, estimates that a majority of states will run out of CHIP money by March.
When states started running out of money for the program in October, they began reaching into the federal government’s $3 billion pool of reserve funds. But that’s still $10 billion short of what they need for 2018, according to the Centers for Medicare and Medicaid Services. So far, 15 states, plus the District of Columbia and the U.S. territories, have received a total of $1.2 billion from the pool to keep their programs going, even if only for an extra month or two.
Colorado, which has received an extra $27 million, estimates that it will exhaust all funds by the end of January. Last Monday, the state sent letters to its CHIP recipients telling them to start looking for other insurance options.
TC Bell, a 30-year-old Denver resident, said that when he learned that the letters were sent, “it really hit home.” His two daughters, 5 and 8, have been on CHIP since they were born.
“I make barely any money,” he said, adding that he recently started college after working dead-end jobs in the service sector. “I can hardly pay my rent. If CHIP goes away, I’m going to end up with my kids without insurance.”
Sara Rosenbaum, a professor at the Milken Institute School of Public Health at George Washington University, said Colorado is being cautious in giving consumers time to look for other options, adding that states that haven’t sent notices yet are “hoping against hope they don’t have to.”
While some states have drafted contingency plans, others have simply resorted to writing letters to Congress itself. Massachusetts Governor Charlie Baker, a Republican, and Oregon Governor Kate Brown, a Democrat, wrote to leaders Wednesday, urging them to reinstate CHIP.
“These disruptions have not been without consequences, and we write to convey that further delay into 2018 will only compound the issues facing our states and vulnerable citizens,” they wrote on behalf of the National Governors Association.
Parents who rely on CHIP don’t have many other options for coverage, though. Some may see if their children qualify for Medicaid or put them on their insurance plan through the Obamacare marketplaces, but most don’t have the extra money to spend, said Linda Nablo, chief deputy director of Virginia’s Department of Medical Assistance Services.
“Families have options, but not a lot of options,” she said. “Most of them will just be uninsured.”
Jasmine Harris, a 27-year-old mother of two toddlers from Logan, Utah, signed up for CHIP in January, when she went part-time as a preschool aide after being diagnosed with Crohn’s disease. Their income took another hit when her husband got laid off from his jobs and went back for his college degree.
“With my own health being rocky, it’s nice to not have to worry about my kids,” she said. “It’s helpful that they keep the costs low, and we can afford it without cutting out food or something else in our budget.”
—Read GAO: How Well Do Exchange Plans Serve Kids? on ThinkAdvisor.