Congress puts off CHIP reauthorization, while states warn short-term fix doesn't help

Two prominent senators have revealed that Congress will not renew funding for the Children’s Health Insurance Program this year—a development that will force some states to make tough choices over the holidays about when to shut down their programs.

Republican senators Susan Collins of Maine and Lamar Alexander of Tennessee made the announcement in a joint statement Wednesday, which primarily served to break the news that Congress won’t be adding their bipartisan Affordable Care Act stabilization legislation to the stopgap spending bill that has to pass this week.

“Instead, we will offer it after the first of the year when the Senate will consider the omnibus spending bill, the Children’s Health Insurance Program reauthorization, funding for Community Health Centers, and other legislation that was to have been enacted this week,” the senators said.

Federal funding for CHIP, which serves more than 9 million children nationwide, expired Sept. 30. Though there is bipartisan support for reauthorizing it, partisan disputes over how to pay for the program have bogged down efforts to do so.

RELATED: Senate committee advances CHIP reauthorization bill, but partisan disputes pose challenge

In a short-term funding bill passed earlier this month—and which expires Dec. 22—Congress included a “patch” that reallocated the $2.9 billion in CHIP funding from prior years, giving more money to states that qualify as “emergency shortfall states.” But a new analysis contends that patch not only was insufficient but also made matters worse for some states.

The analysis, produced by the Georgetown University Center for Children and Families, found that while the 19 emergency shortfall states (plus the District of Columbia) will get redistributed funds from prior years to cover any CHIP funding shortfall, the other 31 states will now see their funds run out even faster.

One of those unlucky states is Virginia, according to Linda Nablo, the chief deputy director of the state’s Department of Medical Assistance Services. Virginia officials notified CHIP enrollees on Dec. 12 that the program would have to shut down by Feb. 1 if Congress doesn’t reauthorize federal funding, but just two days later, they learned that the CHIP patch will cause the state to run out of money even sooner.  

“We’re in a terrible situation right now,” Nablo said during a media call on Wednesday.

Nablo, who isn't yet sure when exactly the state will run out of CHIP money, also implored lawmakers to recognize that long-term funding is the only viable solution. "A short-term fix without adequate funding is not only useless, it’s dangerous,” she said.

As it stands now, 25 states are projected to have insufficient funds to cover children beyond January 2018, per the Georgetown analysis. Some children in those states may be protected by the “Maintenance of Effort” provision in Medicaid—which requires states to keep the same eligibility levels for children in Medicaid and CHIP—but 1.9 million children who are enrolled in separate state-level CHIP programs are at risk of losing their coverage in January. Another 1 million children are at risk of losing coverage by the end of February.

RELATED: Safety net health plans launch campaign to pressure Congress into renewing CHIP funding

Already, Alabama has announced plans to become the first state to cut off children’s coverage. The process will begin Jan. 1, when the state will freeze enrollment and drop 7,000 children who are up for their yearly renewal from the CHIP program. By Feb. 1, all 84,000 children covered by CHIP in the state will lose coverage.

“Our phones are ringing off the wall—we have panicked families just wondering what in the world they have as options,” said Cathy Caldwell, the director of the Alabama Bureau of Children’s Health Insurance. “It is just very, very stressful here in Alabama.”

Even if Congress acts swiftly next year to reauthorize funding, Caldwell believes that what has transpired in recent months—particularly the way it has affected CHIP’s credibility with the public—will cause “irreparable damage” to the program.

The picture will be even bleaker as children begin to lose coverage, said Sam Bartle, M.D., a practicing pediatric emergency medicine physician at the Virginia Commonwealth University Health System. In his work in the ER, Bartle said he’s seen families whose children don’t have insurance negotiate about what treatment they actually need out of concern about how to pay for it.

“That’s the picture that we’re going to be seeing if CHIP doesn’t get renewed,” Bartle said.