States say short-term funding not enough for children’s health

State governments are warning that the short-term funding for a critical children’s health program approved by Congress on Thursday may be too little and too late.

Warning letters in at least three states have already been sent to families saying they could lose coverage for their children come Jan. 31 without new funding from Congress. Even if the new funding keeps their programs afloat, it sends a negative message to enrollees and that could cause long-term implications, experts say. 

{mosads}Alabama announced recently it would freeze enrollment in its program starting Jan. 1, and it’s unclear if the short-term bill will change the state’s plans.

The uncertainty over long-term funding could discourage enrollment in the program and cause more children to go uninsured, experts say.

“It shakes confidence in government in general and certainly in this program,” said Linda Nablo, chief deputy director of Virginia’s Department of Medical Assistance Services. “I think we’re going to see lower enrollment for a little while, certainly.”

States are pressing Congress to approve a five-year extension of the Children’s Health Insurance Program (CHIP), which provides coverage to nearly nine million children.

CHIP’s authorization expired on Sept. 30, and since then, its renewal has been caught up in a partisan feud over how to pay for the extension. Both parties support the program, but they have been unable to agree on how to offset its cost.

“States have already started to notify families that they may not have a source of coverage should Congress fail to enact a long-term extension of CHIP funding, and several states have started to use funds meant to operate the program to start shutting it down,” eight leading children’s advocacy groups said in a statement.

“The short-term CHIP funding included in the House spending bill is not enough to prevent states from continuing these actions, and only causes more chaos and confusion on the ground.”

The short-term bill approved by the House and Senate on Thursday provides $2.85 billion in funding for states, extending the program through March 31. But states say uncertainty will persist.

“The biggest one is stress to families — just not knowing, just not having any confidence in the ability to keep their child enrolled in health insurance,” said Cathy Caldwell, the director of Alabama’s CHIP program.

Alabama had planned to freeze enrollment in its CHIP program starting Jan. 1. Whether or not the short-term fix would change that, Caldwell said the state is “really still assessing. We don’t understand all of it yet, so I’m just really not sure yet.”

The House passed a five-year, $100 billion CHIP reauthorization earlier this year, but Democrats opposed the offsets that made up for the program’s costs, which included cuts to ObamaCare programs. The Senate Finance Committee passed a bipartisan extension, but never released offsets to its bill.

Democrats question why the program even needs to be paid for at all, given that Republicans just passed a tax cut projected to add billions to the debt.

Even with short-term funding, operational issues are a concern.

“Trying to run a program, balance your budget, manage your staff, and all of these type things without any certainty of funding, it becomes very, very difficult,” Caldwell said.

Since Congress let CHIP funding lapse, the Centers for Medicare and Medicaid Services (CMS) has been doling out unused funds to states in need of money to keep their programs running. The stopgap spending measure gives CMS new money to transfer to states with funding shortfalls.   

Several states said they are assessing what the short-term funding means for them, given they don’t yet know how much money they’d receive from the federal government.

Advocates warn the dollars aren’t enough to help every state keep their programs running until the end of March, increasing the urgency that Congress pass a more permanent renewal of CHIP early next year.

“The essence we’re hearing from the states is that this helps a few states with a short-term patch, but for others it does nothing because it’s not like they’re just going to across the board give out everyone’s share of the $2.85 billion,” said Bruce Lesley, president of First Focus, a children and families health advocacy group.

“They’re going to patch a few states, so there will be a few states about to hit crisis … so as these states hit crisis they’ll give them a patch but they won’t do others.”