States Face Uncertain Future of Children's Health Program

States across the country are grappling with how to continue the popular Children's Health Insurance Program after Congress, at least for now, failed to renew its long-term funding.

Lawmakers this week approved a $2.85 billion short-term funding extension for the program, after CHIP supporters criticized Congress for letting insurance aimed at children lapse while they hammered out a far-reaching tax overhaul.

But state officials say the short-term funding, meant to fund the program through late January or early February, isn't enough to allow states to plan more than a few weeks at a time. At least one state, Connecticut, has frozen enrollment in its program, while several others have sent notices to families warning that benefits could be curtailed in January.

CHIP, created in 1997, provides health coverage to about 9 million children whose families make too much to qualify for Medicaid but face financial pressure in buying coverage for their children. It is jointly funded by Washington and the states, though each state administers its own program slightly differently.

"We desperately need to get this resolved. We need long-term funding," said Cathy Caldwell, Alabama's CHIP director.

Alabama had planned to freeze CHIP enrollments on Jan. 1, but the short-term funding from Congress allowed Ms. Caldwell to put off such action. Still, "it really is just kicking the can down the road for a number of weeks," Ms. Caldwell said.

Congress let funding for CHIP lapse on Sept. 30 amid the partisan fight over health care. The program has broad bipartisan support, but the parties are at odds over how to pay for it.

Republicans proposed paying for CHIP by cutting other health spending, including a public health fund in the Affordable Care Act, an idea rejected by Democrats.

In 2016, the program cost the federal government about $16 billion. Some states may have more flexibility than others because they have more funding in reserve.

Lawmakers potentially could have hammered out their differences by year's end, but Democrats decided to push the dispute into January, when a longer-term spending bill and an immigration agreement are also expected to be completed. As the minority party, Democrats hope combining these issues will increase their leverage in negotiations with Republicans, since GOP leaders will need their votes.

Even so, Democrats seized on the delay to highlight what they said was the GOP's priority of enacting tax cuts for primarily wealthier Americans while allowing a health-insurance program for low-income children to expire.

"The idea that you have a bunch of people going to the White House to yuk it up and tell the president how great he is, but they've cut off 9 million children from health care, makes no sense at all," Connecticut Gov. Dannel Malloy said this week after Republican lawmakers celebrated passage of their tax bill at an event at the White House.

House Republicans rejected that characterization, saying their tax plan would help Americans of all income levels and that CHIP would be funded early next year. Many Republicans agree the matter is urgent.

"We've got to get this done," said Rep. Fred Upton (R., Mich.). "It'll happen next month for sure -- no question about it."

Health analysts said the infusion of short-term funding likely staved off far-reaching action that would otherwise have been inevitable. As many as 23 states were considering terminating their programs at the end of January, potentially cutting off coverage for 2 million children, according to a report released last week by the Georgetown University Center for Children and Families.

The short-term cash, along with extra disbursements from the federal Centers for Medicare and Medicaid Services, which oversees the CHIP program, likely will allow states to keep their programs running.

But the uncertainty created by Congress is expected to have an effect, the analysts said, particularly in states like Colorado and Virginia that already have sent families notices of impending cuts, so residents may think their benefits are ending even if they don't.

"Once these notices go out, it's already creating confusion for families, " said Robin Rudowitz, associate director of the Medicaid program at the nonpartisan Kaiser Family Foundation. "There's the risk of kids falling off of coverage even though they remain eligible, because they got this notice."

--Kristina Peterson contributed to this article.

(END) Dow Jones Newswires

December 24, 2017 08:14 ET (13:14 GMT)