States may end coverage for kids as federal funds dry up

Several states may soon have to suspend programs that provide healthcare coverage for children unless Congress reauthorizes funding for the Children's Health Insurance Program, according to a government agency.

Arizona, California, Minnesota, North Carolina and the District of Columbia will run out of CHIP funding by December 2017 unless Congress approves additional funds for the program, according to a report by the Medicaid and CHIP Payment and Access Commission (MACPAC) discussed during a Thursday panel meeting. By March 2018, more than half of states are projected to exhaust their federal CHIP funds.

Congress last funded CHIP through MACRA, which provided nearly $40 billion in federal funding over fiscal years 2016 and 2017 and ends on Sept. 30. The program, which was established in 1997 with bipartisan support, serves about 8.4 million children in families earning up to 200% of the federal poverty level.

As many as 1.1 million children would be left uninsured if federal funding ends with the others either going into Medicaid or the marketplace for coverage. That number of children without coverage could rise if the GOP eliminates subsidized healthcare on the exchanges. MACPAC's uninsured estimate assumes cost sharing reductions will continue, according to the commission.

But families could still face higher costs for CHIP coverage even if marketplace subsidies continue. Families' annual out-of-pocket costs for children who have chronic conditions could increase by $233 to $2,472 if they're forced to shift to marketplace plans from CHIP due to congressional inaction, according to an April 2017 Health Affairs study.

MACPAC is urging Congress to act as soon as possible as state legislatures sessions will be winding down this summer. Some states may move to cancel their CHIP programs if they don't have certainty that federal funding will continue commission members said Thursday during a meeting.

"I think its important that we make the point that if Congress waited up until the cliff, and then gave money, that would still pose a problem to states," MACPAC Chairwoman Sara Rosenbaum said at a commission meeting Thursday.

In December, the panel voted 16-1 to suggest that Congress extend CHIP funding through Sept. 30, 2022.