House to Miss Children’s Health Insurance Deadline

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By Victoria Pelham and Alex Ruoff

Congress won’t reach a deal to fund a public health insurance program for poor children before federal funding expires, lawmakers and staffers told Bloomberg BNA Sept. 26.

Missing the deadline means some states will soon have to alert the families whose children are covered by the program that they could lose coverage, something state officials have been pushing off.

Republican and Democratic leaders on the House Energy and Commerce Committee haven’t reached a deal on extending funding for the federal-state Children’s Health Insurance Program, Rep. Tim Murphy (R-Pa.) said.

Funding for the $13.5 billion per-year program expires Oct. 1, but most states have carry-over funds to keep their local insurance programs open until the end of the year, Murphy said. A staffer with the Senate Finance Committee similarly told Bloomberg BNA that Sept. 30 isn’t a hard deadline for passing a CHIP bill.

“We have plenty of time to deal with it,” Rep. Chris Collins (R-N.Y.), a member of the committee, told reporters Sept. 26.

Republicans and Democrats are close to reaching a bipartisan deal for a multiyear extension of CHIP with cost offsets, Rep. Greg Walden (R-Ore.), chairman of the House Energy and Commerce Committee, told Bloomberg BNA. The agreement has been delayed by the effort to repeal the Affordable Care Act, he said.

The 20-year-old CHIP program covers nearly 9 million children whose families make more than Medicaid eligibility allows but can’t afford private health insurance. Without reauthorization, federal financing would run out Sept. 30, and states would start exhausting their funds by December, according to the Medicaid and CHIP Payment and Access Commission. Most states would run dry by March 2018. Advocates are calling for urgent action because preparations for any cuts would need to be made within weeks.

Senators Sept. 18 released a bipartisan bill ( S. 1827) to extend CHIP for five years, but no Senate committee has marked up the bill.

States Scrambling

Meanwhile, time is in shorter supply in the minds of states and child advocates.

“A lot of states have been keeping quiet because they didn’t want to alarm families,” Joan Alker, executive director of the Georgetown Center for Children and Families, said.

They were reassured by federal officials and the Hill not to worry about CHIP—that everything would be fine.

“And it’s not fine anymore. This really needs to get done,” she told Bloomberg BNA.

Because of contracts with providers, insurers, and managed care plans, states would need to make choices about their programs months in advance, so they are “very much feeling the pressure of being in that situation right now,” Maureen Hensley-Quinn, senior program director at the National Academy for State Health Policy, said.

Without action, 10 states would run out of their fiscal 2017 CHIP allotments by the end of 2017, according to an analysis from the Kaiser Family Foundation.

But existing projections don’t reveal the full urgency of the story, Hensley-Quinn said. Many states are beginning to prepare for a situation in which they would need to take steps to restrict or close their programs—preparations that states didn’t budget for and that eat up remaining funds. This means states will likely run out before they’re expected to.

In Hurricane Harvey-damaged Texas, those concerns are amplified by officials’ decision to waive CHIP cost-sharing temporarily, which could mean their budgets will be exhausted even sooner, Hensley-Quinn said.

“States are really scrutinizing their own finances in order to prepare to best lay the groundwork” and weigh when they might run out, she said.

Colorado has issued a notice on its website that CHIP might end, Hensley-Quinn noted, and others are working with Centers for Medicare & Medicaid Services officials on state plan amendments to ensure they could change eligibility or waiting periods if need be.

Some are also preparing their eligibility and enrollment systems for any future tweaks, and still others are in discussions with exchange officials to craft plans for eligible children to be vetted and moved over to state ACA exchanges if programs are shut down. That could cause “disruption and chaos,” she added.

In addition, most states are banking on CHIP continuing to be funded at current levels, which were enhanced under Obamacare. The Senate proposal would phase that enhanced match out over time but leave it in tact through fiscal 2019. Recent KFF figures showed 48 states counted on federal CHIP funding in their fiscal 2018 budgets, with 34 of 42 responding states expecting the ACA’s bump to continue.

And most state legislatures are not in session.

“This is extremely difficult for them to be able to plan and run a good program when they’re living in this kind of uncertainty,” Alker said. “So they need time.”

A ‘Strong Message’

Alker pointed out that families also need certainty for their children’s coverage.

“Families really need a strong message,” she said. “They need Congress to take action. It’s as simple as that.”

That’s especially true because the Obamacare repeal-and-replace conversation, which faltered this week, has dominated the health-care conversation this year, Alker said. That plan held back the bipartisan action out of the Senate on a five-year extension for CHIP funding, she said.

Managed care plans warned in a Sept. 26 statement to Bloomberg BNA that lawmakers have “introduced instability into the system with their inability to come up with a deal.”

“The failure to renew this vital program puts millions of children at risk and creates great uncertainty for states, providers, and health plans,” Jeff M. Myers, president and CEO of Medicaid Health Plans of America, said in the statement, calling again for a permanent reauthorization of the program.

“We are not surprised that they’re going to miss the deadline, which is the very reason why we urged them to make funding permanent,” Myers said.

—Laura Davison contributed to this report

To contact the reporter on this story: Alex Ruoff in Washington at aruoff@bna.com

To contact the editor responsible for this story: Brian Broderick at bbroderick@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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