Survey: State Officials Expect CHIP Funding to Continue; Plan for Alternatives

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By Nathaniel Weixel

Feb. 17 — State officials are assuming federal funding for the Children's Health Insurance Program will continue, but most officials have started to consider potential scenarios if federal funding isn't extended past Sept. 30, according to a survey released Feb. 17.

The National Academy for State Health Policy (NASHP) in the survey found most of the state CHIP officials who responded were beginning to plan for the possibility that federal funding for the program won't be extended after it expires at the end of September, but they would need time to develop and implement plans to move enrollees out of the CHIP program.

Without action, federal funding for CHIP will expire Sept. 30 (the end of fiscal year 2015), but the program itself is authorized through 2019. CHIP is a federal block grant program that provides matching funds to states to support health coverage for children in families with too much income to qualify for Medicaid but too little to afford other types of insurance. There are currently 8 million children enrolled in state CHIP plans.

According to the NASHP survey, most CHIP officials estimated their state would have federal CHIP allotments through calendar year 2015, and some estimated into early 2016. No states indicated they were planning on the funding being discontinued, and 75 percent of CHIP directors said their governors' proposed budget assumes federal funding for CHIP will continue in FY 2016. CHIP directors from 28 states reported their governors are including money in their proposed budgets for a CHIP match in state fiscal year 2016.

NASHP surveyed CHIP directors in every state and the District of Columbia; 46 officials responded.

If CHIP funding were to expire, the Affordable Care Act requires states to continue covering children through FY 2019. However, states that run CHIP as an expanded Medicaid program would get fewer federal dollars because of a lower federal matching rate. States that run CHIP as a separate program are supposed to move children into exchange plans that are “comparable” to CHIP. However, several officials operating Medicaid expansion CHIP programs indicated in the survey that if federal CHIP funding isn't extended, they would need contingency plans to request additional state funds to cover the CHIP population in Medicaid at the lower Medicaid matching rate.

According to the congressional advisory group Medicaid and CHIP Payment and Access Commission (MACPAC), seven states, the District of Columbia and five territories have Medicaid expansion CHIP programs.

Transition Plans

While most officials remained optimistic about CHIP being extended, most noted they will need a “fair amount of lead time” to transition enrollees out of CHIP and into other areas of available coverage. According to the survey, some officials would examine transferring enrollees into Medicaid. Other officials said they would look to collaborate with local or federal insurance exchange officials to coordinate a transition to qualified health plans.

Several officials said they weren't sure how much time they'd need to begin closing their CHIP programs if funding wasn't extended, while 16 officials said they'd need to make plans in the coming months, with the majority indicating they'd make plans in the next three months. Still others said they'd need at least a year to transition enrollees from CHIP to another form of coverage.

If Congress delays action beyond the spring, some officials will need to take steps to begin closing their programs, whether it is discontinuing new enrollment or beginning to notify current enrollees in separate CHIP programs that the program will end.

Federal lawmakers are looking to make sure CHIP funding doesn't expire, and Democrats in the House and Senate introduced companion bills Feb. 12 to extend CHIP funding through 2019. 

To contact the reporter on this story: Nathaniel Weixel in Washington at nweixel@bna.com

To contact the editor responsible for this story: Nancy Simmons at nsimmons@bna.com