Ohio Kids & Our State Budget Need the Stability of CHIP

April 14, 2017

As we watched the latest stalled efforts to repeal the Affordable Care Act (ACA), we couldn’t help but think about what’s in store for another key health program: the Children’s Health Insurance Program (CHIP). With no new funding available to states after September 30, 2017 (the end of the federal fiscal year), Congress needs to act quickly to keep kids from falling through the cracks. CHIP funding was extended for two years back in April 2015, along with the ACA’s 23 percentage-point bump in the state matching rate for CHIP that has prompted a number of states to make gains in coverage for immigrant children, among other positive changes.

 

CHIP, riding on Medicaid’s shoulders, has always been a success story for kids and has generally received bipartisan support. Both Medicaid and CHIP are federal-state partnership programs. Unlike Medicaid, Congress has to come back and fund CHIP periodically, which can leave states having to make contingency plans in case federal funding decisions are delayed or stalled altogether.

 

Two recent reports help illustrate the urgency of getting CHIP extended quickly to stabilize coverage for kids and to provide states with some clarity on how strong of a partner the federal government will be in their efforts to meet the health care needs of children. The Medicaid and CHIP Payment and Access Commission (MACPAC), Congress’ advisory body on Medicaid and CHIP, recently examined how quickly states would expend their CHIP funds if Congress does not act before September 30. All states would exhaust funds by June 2018, with more than half (34) reaching their cap by Spring 2018.

 

In Ohio, CHIP funding is projected to run out in less than 1 year, in March 2018.  For administrative efficiency and to provide the most robust benefits for children, Ohio opted to use CHIP funds to expand Medicaid to uninsured children in families with income between 156 and 206 percent of the federal poverty level. If CHIP funding is exhausted, the federal matching rate for these children falls back from the CHIP enhanced match to the regular Medicaid matching rate. Although states are generally prohibited from reducing eligibility levels in Medicaid-expansion CHIP through at least FY 2019, the budget consequences resulting from the higher state share of spending for those children could lead Ohio to take other steps affecting access, such as lowering provider payment rates or increasing requirements for prior authorization.

 

While this is certainly concerning, NASHP’s February survey of state CHIP directors suggests that most respondents (33 out of 40) not only assume continued CHIP funding, but most also assume the ACA’s bump will remain (21 out of 38). Most others were unsure, and few states definitively assumed no CHIP extension (1 respondent) or bump (5 respondents). So it would certainly create more chaos for kids and states if Congress does not act in the manner they are anticipating. Even as we face uncertainty in Medicaid’s future, extending CHIP would provide a good bipartisan win for Ohio kids and lawmakers alike.

 

 

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