U.S. Senate Announces 5-Year CHIP Funding Program

The U.S. Senate Finance Committee reached an estimated $8 billion bipartisan agreement that renews funding for the Children’s Health Insurance Program for five years and phases out the 23 percent Obamacare funding bump. States would have to maintain eligibility through 2019, and after that there would be no so-called maintenance of effort for children of parents with incomes more than 300 percent of the federal poverty level.

While the deal does not include details of how the Congress would pay for the funding extension, the proposed legislation would maintain Obamacare’s 23 percent increase in the federal matching rate to states for 2018 and 2019 and begin to ratchet it down in 2020, according to GOP and Democratic aides. The bump is set at 11.5 percent in 2020 and would be totally eliminated starting in 2021. Amendments to the proposed legislation are expected.

“The Medical Association began working with Alabama’s Congressional Delegation in January when we traveled to Washington, D.C., for the Government Relations Conference,” said Executive Director Mark Jackson. “We wanted to express to them the importance that CHIP funding be renewed and the impact the program has on our residents. We are pleased to see that there is a bi-partisan proposal in the Senate that will keep CHIP funding in place.”

CHIP is authorized through 2019, but funding runs out at the end of September. CHIP covers families with income levels between 138 percent and 405 percent of the federal poverty level. States determine the eligibility levels within those parameters, and the ACA requires that states maintain eligibility levels that were in place as of March 23, 2010. States that reduce eligibility lose federal Medicaid funding. Eligibility levels are capped between 200 percent and 300 percent of poverty in 30 states, and in 19 states eligibility levels are higher than 300 percent of poverty, although those states don’t receive the higher match rate for enrollees above the 300 percent threshold, according to American Action Forum. The Finance deal would let states drop eligibility levels to 300 percent of poverty after 2019.

More than 97 percent of CHIP enrollees have family income of 250 percent of poverty, according to the American Action Forum analysis.

The American Academy of Family Physicians and more than 130 other organizations issued a statement on Sept. 6 calling on legislators to save the CHIP from chaos and families from confusion by extending the program’s funding for five years before it expires on Sept. 30.

“CHIP has a proven track record of providing high-quality, cost-effective coverage for low-income children and pregnant women in working families,” the statement said. “CHIP was a smart, bipartisan solution to a real problem facing American children and families when it was adopted in 1997, and its importance and impact in securing a healthy future for children in low-income families has only increased. As Congress continues to work on larger health system reforms, a primary goal should be to improve health coverage for children, but at a minimum, no child should be left worse off. We urge our nation’s leaders to work together to enact a five-year extension of CHIP funding as an important opportunity for meaningful, bipartisan action.”

Nearly 9 million children whose families could not otherwise afford health insurance have access to health care because of CHIP. The program also enables pregnant women in 19 states to obtain the health care they need to have healthy pregnancies and give birth to healthy infants. Many families covered by the program have incomes too high to qualify for Medicaid.