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Senate’s Cassidy-Graham Focus Jeopardizing Health Coverage for Millions of Children

September 20, 2017 at 1:15 PM

Senate Republicans’ efforts to pass the Affordable Care Act (ACA) repeal bill from Senators Bill Cassidy and Lindsey Graham are derailing bipartisan efforts to extend federal funding for the Children’s Health Insurance Program (CHIP). Many states will exhaust their remaining CHIP funds soon after federal funding for the program expires October 1, which will force them to dramatically raise their own spending or sharply cut their separate CHIP programs — risking health coverage for nearly 9 million low-income children.

By shifting their focus to Cassidy-Graham, Senate Republicans have virtually ensured that Congress will delay a decision on CHIP’s future until later this year. That will quickly harm states and children. Ten states that responded to a Kaiser Family Foundation survey say they will exhaust their federal CHIP funding by the end of this year, and Minnesota will run out at the end of this month.

When their federal funding runs out, states with separate CHIP programs (rather than CHIP-funded Medicaid expansions for children) may be forced to impose enrollment caps or freezes, or shut their programs entirely. Also, many states must notify families well in advance of any potential end of the state’s CHIP program. So states with separate CHIP programs that are projected to exhaust their federal CHIP funds in the coming months would likely need to send notices soon.

Before Cassidy-Graham took center stage, Senators Orrin Hatch and Ron Wyden (the Finance Committee’s chairman and ranking Democrat) worked out a bipartisan agreement to extend federal CHIP funding through fiscal year 2022 — largely in line with suggestions by a bipartisan group of governors and the nonpartisan Medicaid and CHIP Payment and Access Commission.

The Finance Committee proposal, unveiled this week, would protect state budgets by retaining the ACA’s 23-percentage-point increase in the federal funding matching rate for CHIP, which is in effect through fiscal year 2019, then lower the increase to 11.5 percentage points in 2020, before returning the CHIP matching rate to its traditional level in 2021.

The proposal also would fully retain through 2019 the maintenance-of-effort requirement, which prohibits states from rolling back eligibility for Medicaid and CHIP coverage for low-income kids, and then extend it through 2022 for nearly all Medicaid- and CHIP-covered children. It also would extend for five years the “Express Lane Eligibility” option, which makes it easier for eligible children to enroll in (and renew) Medicaid and CHIP coverage. Notably, it does not include harmful Trump Administration proposals that would restrict eligibility and leave more children uninsured.

Children’s health coverage is at an all-time high, with 95 percent of children covered in 2016, new Census data show. Yet rather than look for ways to build on this progress, Senate Republicans are using the remaining days of September to work on the damaging Cassidy-Graham proposal, which would harm state budgets and take health coverage away from millions of Americans — including children, who would face large and growing cuts to coverage due largely to the proposal’s per capita cap on federal Medicaid funding.