Senate, House poised to mark up CHIP funding bills as states prepare for shortfalls

U.S. Capitol with flag
Even as Congress gets back to work on CHIP, some state leaders are busy preparing for the possibility that their federal funding will run out.(Getty/Andrea Izzotti)

This week, Congress will mark up two measures to reauthorize funding for the Children’s Health Insurance Program, and for states, those efforts come not a moment too soon.

Federal funding for CHIP expired this past Saturday even though the Senate Finance Committee reached a bipartisan deal in mid-September to extend funding for five years.

Some say Republicans’ focus on passing an Affordable Care Act repeal bill was to blame for robbing the CHIP funding measure of momentum. “No one was even taking our calls,” Bruce Lesley, president of children’s advocacy group First Focus, told the Los Angeles Times.

RELATED: GOP postpones vote on Graham-Cassidy bill, leaving fate of ACA repeal effort uncertain

With the Graham-Cassidy bill now tabled, lawmakers are once again focusing on CHIP. The Senate Finance Committee will mark up its bill on Wednesday, while the House Energy and Commerce Committee will do the same for its newly unveiled measure (PDF).

The House bill differs from its counterpart in the Senate in that it would send $1 billion in additional Medicaid funding to Puerto Rico, which is currently struggling to recover from the devastation wrought by Hurricane Maria.

Both bills, though, would end the enhanced federal medical assistance percentage (E-FMAP) after it expires. Under the Affordable Care Act, the E-FMAP increased the federal funding match for CHIP by 23 percentage points from 2016-2019.

Even as Congress gets back to work on CHIP, some state leaders are busy preparing for the possibility that their federal funding will run out.

Colorado officials, for example, say they have enough unspent federal aid to continue the program only through the end of January, The Denver Post reports.

Utah, meanwhile, is mulling moving CHIP-eligible children to Medicaid or the ACA exchanges if CHIP funding runs out, according to Politico. And Minnesota would face a $10 million federal penalty if it has to tap into its unspent federal allotment for 2017.

The Medicaid and CHIP Payment and Access Commission has estimated that all states will exhaust their federal CHIP coffers in fiscal year 2018 unless funding is extended. And just extending funding may not be enough, as a Kaiser Family Foundation issue brief points out.

“If Congress extends funding but does not include the 23 percentage-point increase in the federal matching rate that was provided in the ACA, most states will still face shortfalls, since many assumed continued funding with the enhanced match rate,” it notes.