CHIP is running out of money here and elsewhere

By Marcy Stamper

Almost 16,000 children in Washington state will lose their free health coverage if Congress doesn’t reauthorize the Children’s Health Insurance Program (CHIP), which expired at the end of September.

By state law, CHIP provides free health insurance to all Washington children in families earning up to 250 percent of the federal poverty level (about $61,500 for a family of four) — currently more than 32,000 kids across the state. Washington also extends the program to cover children in families with somewhat higher incomes — up to 312 percent of the poverty level (about $77,000 for a family of four) — and it’s those 16,000 who would be booted out of the program if Congress doesn’t restore the funding.

While Congressional lawmakers have said they intend to reauthorize the money for CHIP, Washington state plans to notify affected families this week that subsidized health insurance for their children is ending as of Feb. 1, according to Amy Blondin, a spokesperson with the state Health Care Authority. The authority administers CHIP and Medicaid for children and adults in the state

“We keep hearing it’s close — we’ve gotten signals Congress intends to reauthorize it,” said Blondin, who said the state is engaged in “watchful waiting.”

The funding to cover the 16,000 kids in the state’s augmented CHIP program costs an average of $10 million per month, said Blondin. The program was covered this October and November through a redistribution of CHIP funds that had not been spent in other states. The redistribution is one of several ways the federal government helps fill the gap if states don’t have enough money to cover all children insured through CHIP.

“We’ve been keeping CHIP afloat through the redistribution money, but we will have to unenroll kids not statutorily covered,” said Blondin. That would unenroll the 16,000 children in families earning more than 250 percent of the poverty level.

Washington is one of 19 states, including the District of Columbia, that extends CHIP to children in families earning more than 300 percent of the federal poverty level, according to the Kaiser Family Foundation, a nonprofit organization that provides information on national health issues.

Running out of money

Without federal funding for the program, Washington state would face a $200 million shortfall, according to Sen. Maria Cantwell (D-Wash.).

Washington also gets money through the qualifying state option (often called the “CHIP fix”), which was passed in 2007. That legislation helped reimburse states that had already covered children through Medicaid before CHIP was enacted. In Washington, the expansion of Medicaid provided health care insurance for tens of thousands of children who otherwise wouldn’t have qualified, according to Cantwell.

Washington is one of 11 states that meet the definition of a qualifying state, and one of only six that received these funds in 2016, according to Bryan Watt, press secretary for Cantwell.

With CHIP expiring, Washington is actually in better shape than some states, 11 of which (including Oregon, Idaho and California) were expected to run out of CHIP funding by the end of this year, according to the Kaiser Family Foundation. But Washington is in the next group, anticipating money will be exhausted between January and March 2018.

CHIP was enacted by Congress in 1997. It covers doctor’s visits, hospitals, medications, vision and dental care, and behavioral health services for children through the age of 18. CHIP supplements Medicaid, which covers children in the poorest households.

Before CHIP was enacted, the national uninsured rate for children was almost 14 percent. The program has helped reduce Washington’s uninsured rate for children to an all-time low of under 3 percent. The national rate is now 5 percent.

Nationwide, CHIP covers 39 percent of children, and 44 percent of children with special health needs, according to the Kaiser Family Foundation. CHIP cost the federal government about $13.6 billion in 2016.

The total CHIP federal grant to Washington in fiscal year 2017 was $242.5 million. Of that, $23.9 million covers the almost 16,000 kids who would be cut from the program. Washington exhausted this allotment at the end of September, said Blondin.

Over the past few months, bills have been introduced in both the House and Senate to reauthorize funding for CHIP, but lawmakers haven’t reached an agreement on how to fund it. A CHIP reauthorization bill is currently being negotiated between the chambers, and could be included in a year-end budget bill, said Watt.

The Health Care Authority is also awaiting potential action by Gov. Jay Inslee and the state Legislature, who may reach an agreement to cover those above 250 percent of the poverty level, said Blondin.