The deadline for extending federal funding for the Children’s Health Insurance Program (CHIP) draws near at the end of September. Although no reauthorization from Congress has yet occurred, a bi-partisan agreement to extend CHIP was announced by two senators last week.
Chairman of the Finance Committee Senator Orrin G. Hatch of Utah (R), and Senator Ron Ryden of Oregon (D) announced the agreement on September 12. Congress has been grappling with several components of CHIP, such as the duration of reauthorization and whether the 23-percentage point bump of federal funding under the Affordable Care Act (ACA) would remain.
Considering states’ budgets are finalized, and included the enhanced federal funding match of 23 percentage points from a reauthorization of CHIP, the senators spoke of a timeline-adjustment of federal funding for CHIP in order to reflect states’ finalized budgets. ACA increased the federal contribution to the federal-state shared cost for CHIP. Senator Hatch shared that their current agreement will continue the 23-percentage point bump of federal funding for 2018 and 2019 only. In 2020, the federal bump will be halved to 11.5 percentage points. In 2021 and 2022, the federal contribution will be completely eliminated from the program cost.
CHIP was authorized for a two-year extension in April 2015, but Senator Hatch and Senator Ryden’s announcement communicates the goal of a 5-year extension with a declining slide of federal contribution.
Time is of the essence with CHIP reauthorization in terms of children’s healthcare coverage. If reauthorization does not occur by the end of September, then three states and D.C. could expend all of their remaining CHIP funds by December. Additionally, if CHIP is not reauthorized, then 9 million low- and middle-income children will lose insurance. CHIP benefits children in insurance purgatory: their families make too much money to qualify for Medicare, but do not make enough money to afford other insurance. Although these families are able to get coverage under ACA, CHIP offers a more complete benefits package at a lower cost. Bill Lucia, Chairman, President, & CEO of HMS highlighted the importance of reauthorizing CHIP from a long-term cost management perspective in his op-ed in The Hill last week. HMS has been a long time ACS client in Ohio where ACS serves as a lobbyist for HMS and Permedion, Inc., (HMS subsidiary) before the State, including executive agencies and legislators and provides strategic political, advocacy, and communication advice to help advance client priorities. HMS and Permedion are the nation’s leaders in the coordination of benefits and program integrity services for healthcare payers.