Millions of families that rely on the Children’s Health Insurance Program (CHIP) for their child’s coverage are breathing a sigh of relief. Yesterday, Congress finally passed a controversial short-term funding bill to end the government shutdown that includes a six-year extension of CHIP.
The CHIP funding extension maintains the current enhanced match rate through fiscal year 2019 (September 30, 2019) but will reduce the rate by 11.5 percent in FFY20 and go back to the regular CHIP match rate in FFY21 (starting October 1, 2020). As federal participation decreases, the state financial share to run CHIP will increase. The deal also extends the maintenance of effort (MOE) mandate, which requires states to maintain income eligibility levels for children that were in place as of the date of enactment of the ACA through FFY23, up to 300 percent of the federal poverty level. Absent this extension, the existing MOE was set to expire at the end of September 2019, which would have jeopardized ongoing CHIP coverage.
Although the CHIP funding extension is welcome news, Congress’ failure to extend CHIP funding for 114 days caused unnecessary harm. After federal funding for CHIP originally ran out on October 1, 2017, some states have struggled to keep their programs running. On December 21, Congress provided $2.85 billion to keep CHIP running through March, but a growing number of states projected running out of funds well before then. CMS confirmed it could not guarantee funding to all states past January 19. Several states notified families that CHIP coverage would end if Congress did not extend CHIP funding and Connecticut even closed enrollment for a week. Families were fearful their children’s CHIP coverage would end abruptly and physicians were encouraging families to refill prescriptions in case CHIP funding ran out.
While the six-year extension of federal CHIP funding is a critical step forward, Congress should have gone further. A ten-year CHIP extension would save the government approximately $6 billion. A longer extension would also stabilize children’s coverage and give assurances to states and families that the federal government is committed to investing in CHIP. For now, we can take comfort in the fact that Congress stopped gambling with the health of our nation’s children by extending funding for a program that has historically had strong bipartisan support.
