The State Children’s Health Insurance Program (CHIP) is poised for a possible rocky-road ahead if Congress does not renew funding later this year. The CHIP program is a means-tested program providing health insurance coverage to low-income children and pregnant women. It is a joint project to the federal government and the states. Federal regulations set basic requirements and the states can design their own programs. In 2013 CHIP enrollment totaled 8.4 million and federal and state CHIP expenditures totaled $13.2 billion.
Federal funding for the CHIP program expires on Sept. 30, 2015 and funding renewal is a high bipartisan congressional priority but debate on a re-authorization bill is likely to extend to close to the deadline. If lawmakers are unable to agree on a renewal bill, the portion of federal CHIP funding assigned to the ongoing effort to expand Medicaid will be covered through regular Medicaid funding, but other state CHIP programs are subject to funding restrictions covered by ‘maintenance of effort’ rules included in the Affordable Care Act. The program maintenance rules require states to maintain current eligibility levels for CHIP children.
The Congressional Research Service recently provided lawmakers with a report (CQ subscription) describing the impact to maintenance of effort rules for ongoing CHIP programs if funding expires in September. The report notes:
The states are provided a couple of exceptions to the MOE requirement: (1) states may impose waiting lists or enrollment caps to limit CHIP expenditures, and (2) after September 1, 2015, states may enroll CHIP-eligible children in qualified health plans in the health insurance exchanges. In addition, in the event that a state’s CHIP allotment is insufficient to fund CHIP coverage for all eligible children, a state must establish procedures to screen children for Medicaid eligibility and enroll those who are Medicaid eligible. For children not eligible for Medicaid, the state must establish procedures to enroll CHIP children in qualified health plans in the health insurance exchanges that have been certified by the Secretary of Health and Human Services to be “at least comparable” to CHIP in terms of benefits and cost sharing.