As Sept. 30 approaches, pediatric providers are grappling with the potential loss of funding for two programs responsible for huge gains in health insurance coverage for children.
Combined, the Children's Health Insurance Program and Medicaid, both of which provide health coverage to uninsured children in families that can't afford it elsewhere, cover an estimated 46 million children.
Federal funding for CHIP expires at the end of the month, the same time that Republican senators run out of time to pass an Affordable Care Act repeal-and-replace bill by a simple majority. Nonpartisan organizations expect that repeal bill to gut Medicaid funds to states by billions.
Provider organizations are scrambling to fight for funding on both fronts. "We can do all this work to get CHIP reauthorized … but all that work will be for naught if the Graham-Cassidy bill passes," said Louise McCarthy, president and CEO of the Community Clinic Association of Los Angeles County, which represents 62 not-for-profit clinics that see mostly Medicaid patients.
With the ACA's premium tax credits and cost-sharing subsidies in jeopardy, experts say CHIP has become even more essential to the coverage of uninsured children. But CHIP will be weakened if Medicaid funding for kids is significantly reduced. Pediatric providers worry that without funding for CHIP and reduced funds for Medicaid, they're facing cuts in coverage and healthcare access for patients and to payments for providers.
"This really puts funding at risk for a very, very significant amount of children nationally," Paul Viviano, president and CEO of Children's Hospital Los Angeles, said of the potential disruption of CHIP funding. He estimates that about 2 million children with CHIP coverage live in California, with a quarter of them located in Los Angeles County. "This could impact their access to services and impact our reimbursement for providing those services."
Last week, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and ranking member Ron Wyden (D-Ore.) introduced legislation to extend CHIP funding for five years. The bill would also phase out the Obama administration's enhanced federal match for CHIP funding by 2021. It has not yet been scheduled for a hearing.
The Medicaid and Chip Payment and Access Commission projects that 1.2 million children would become uninsured if CHIP funding ends because their families would not be able to afford premiums or cost-sharing under private insurance. But that's not taking into account the children who might lose coverage through Medicaid if the Senate's Graham-Cassidy bill is enacted.
An analysis by consulting firm Avalere found that the bill would reduce Medicaid funding to states by $713 billion over the next 10 years. Funding for that analysis was provided by the liberal Center for American Progress.
CHIP costs about $14 billion a year to run. The feds pick up about 70% of the tab. But the benefits are evident. Medicaid and CHIP are responsible for dropping the percentage of uninsured U.S. children from 14.8% in 1996—the year before CHIP was enacted—to 4.5% in 2016.
Hospitals fear the Graham-Cassidy bill, if enacted, would decimate Medicaid. That would spell trouble for CHIP in states like California and Minnesota, where the program is combined with Medicaid. About 5.2 million children receive their coverage this way.
In the 15 states that have expanded Medicaid with CHIP funds, such as Ohio, Minnesota and South Carolina, the ACA's "maintenance of effort" provision requires them to keep covering children regardless of federal funding. That would hurt many already cash-strapped states.
The 36 states that maintain separate CHIP programs are not mandated to continue them, however. "They would start shutting down those programs or phasing them out," said Tricia Brooks, a senior fellow at Georgetown University's Center for Children and Families and former CHIP director in New Hampshire.
Several states will exhaust their CHIP money by the end of the year, and all states will run out of CHIP funds by the end of 2018. Minnesota's funds will dry up by the end of September.
If Minnesota's Medicaid payments to providers are squeezed from lack of funds, "We don't have any other place to make up revenue," said Kelly Wolfe, director of public policy at Children's Minnesota, a system where a significant portion of patients are covered by Medicaid. Already, Wolfe says, Medicaid reimburses the hospital at 80 cents on the dollar. "It has never been and never will be our practice to turn away a child. So then we look at (scaling back) programs that are good for families, but aren't crucial."