Children's Health Insurance Program is set to go bust

If you're waiting and wondering what the future holds for the Children's Health Insurance Program, the answer most likely depends on where you live.

CHIP is a popular, bipartisan program that provides a safety net for nearly 9 million kids in low- and mid-income families. It's the latest pawn in the Congressional wrangling over health care. Both the Senate and House are debating bills to reauthorize CHIP funding, and both are considering these bills after the Sept. 30 deadline for reauthorization has passed. 

"CHIP has always had bipartisan support since it started 20 years ago," said Jesse Cross-Call, senior policy analyst at the Center for Budget and Policy Priorities (CBPP). "So it has really been a surprise that it's taking this long to get it funded. Congress has never blown past the deadline before, so we're in uncharted territory."

Missing the deadline means an estimated 11 states will run out of federal CHIP money by the end of this year, and 32 states are expected to run out of money by March 2018, according to a study by the Kaiser Family Foundation.

CHIP is funded by a combination of state and federal dollars. States have the flexibility to administer the program in a number of different ways, including a stand-alone program, a Medicaid-administered program or a combination of the two. States that administer CHIP through Medicaid expansion programs are required to maintain coverage under the Affordable Care Act, while states with stand-alone programs aren't required to continue coverage.  

Most states have passed final budgets for the next fiscal year with the assumption that CHIP would be reauthorized and they would be receiving federal funds. In addition, many states figured on a 23 percentage point increase in CHIP funding that was part of the Affordable Care Act.

As a result of all this, many states are scrambling to figure out how to keep their programs afloat until or if reauthorization takes place and how to notify residents that trouble is brewing.

Utah, for example, will run out of federal funding by the end of this year and would need to close the program by then. State officials are wrestling with the idea of giving families 60 days notice so they can research alternatives. That would mean sending some information out by Nov. 1. But that will be a big task and could cause confusion if reauthorization comes after then but before year-end.

Arizona will also run out of CHIP money by year-end. State statute dictates that new enrollment will be frozen if federal funding decreases. The state is holding off on notifying families until Washington sheds some clarity on the matter.

Meanwhile, Nevada could run out of funds as soon as November and may need to freeze enrollment by Nov. 1 and end coverage by Nov. 30.  

Chances are Washington will come through, eventually. In both the House and Senate, CHIP refunding bills are making their way through committees. But this is health care, so both come with complications.

The Senate bill was held up by the last-ditch effort to repeal Obamacare but has now gone through the Senate Finance Committee with little fanfare. It would fund the program for five years and preserve the ACA's increase in funding for the next two years. 

Health care advocates warn, however, that the Senate bill doesn't specify how CHIP reauthorization will be paid for, which could create a future debate and more delays.

The House bill is more complicated. In that chamber, the House Energy and Commerce Committee approved a bill that would provide $1 billion in extra Medicaid funding to Puerto Rico and the US Virgin Islands along with funding CHIP for the next five years. During the committee debate, Democrats balked at the cuts and tweaks in Medicare, Medicaid and the ACA that would help fund the bill.

"It's not unusual for CHIP funding to have offsets," said Cross-Call. But, he explained, organizations like the CBPP worry that the money for Puerto Rico and the U.S. Virgin Islands isn't enough to fulfill the need and that CHIP reauthorization could get caught in the debate.

In the meantime, advises Cross-Call, families dependent on CHIP must take a wait-and-see attitude for the next couple of weeks until both bills make their way through Congress and, hopefully, funding comes through.