Another state to warn CHIP families that insurance might end because Congress failed to act

First Colorado and, now, Virginia.

A news conference on Capitol Hill in Washington,  in 2007, with Sen. Gordon Smith, R-Ore., center, and others on the Children's Health Insurance Program (CHIP). (CREDIT: AP Photo/Susan Walsh)
A news conference on Capitol Hill in Washington, in 2007, with Sen. Gordon Smith, R-Ore., center, and others on the Children's Health Insurance Program (CHIP). (CREDIT: AP Photo/Susan Walsh)

On Monday, Virginia officials said they will begin notifying families who receive coverage through the Children’s Health Insurance Program (CHIP) that the program will end on January 31st if the federal government does not adequately fund it soon. WAMU 88.5 reporter Selena Simmons-Duffin first reported the news.

Congress failed to reauthorize funding for CHIP on September 30th. Now, 65,000 children and 1,100 pregnant women enrolled in Virginia’s program are at risk of losing health insurance. Linda Nablo, the Chief Deputy Director of Virginia’s Department of Medical Assistance Services, said the letters notifying families will be mailed on Tuesday:

Provided by Linda Nablo of the Virginia Department of Medical Assistance Services
Provided by Linda Nablo of the Virginia Department of Medical Assistance Services

Nationwide, CHIP provides health insurance to roughly nine million children. Pregnant women also qualify for CHIP in 20 states, including Virginia. The program insures modest-income families who are not eligible for Medicaid. And the federal and state government jointly finance the program; federal dollars make up the majority of the share.

The reason CHIP is having trouble is because politicians cannot agree on how to fund the program. The House passed a bill in November that funds the program for five years, but the Senate has not. Both chambers of Congress have been able to pass a major tax reform bill that disproportionately helps wealthier U.S. residents — a point noticed online:

“It was a difficult decision,” Linda Nablo, Chief Deputy Director at Virginia’s Department of Medical Assistance Services, told ThinkProgress. Some argue “a letter like this will cause unnecessary concern and confusion” should Congress act by the end of the year. But ultimately, Virginia officials concluded they owed families an update.

The thinking was this: Congress didn’t adequately fund the program when it passed a short-term spending bill last week. The next CHIP funding opportunity comes down to December 22nd, the deadline by which lawmakers must resolve their policy differences and pass a long-term spending bill to avert a government shutdown.

“They probably will act,” said Nablo. “[But] if the government does shut down, that puts us too far behind. It means we are sending this letter around Christmas Eve with less notice.”

House GOP sources told Axios Monday that Congress is unlikely to authorize new funding for CHIP by the end of the year.

“The bottom line is this putting states in a terrible position where they even have to think about this,” said Elisabeth Wright Burak, a Senior Fellow at the Georgetown University’s McCourt School of Public Policy’s Center for Children and Families. “It’s putting states in a bad situation and putting families in a terrible position, and it’s creating a lot of unnecessary stress.”

While some states are able to implement contingency plans, like reshuffling existing state dollars, others cannot. Like Virginia, Colorado recently mailed one of two letters that warned families that the program will end January 31, 2018 should Congress fail to act in time. The first letter provides parents with an update; the second notice — which is expected to be mailed in January — is the official termination notice, which provides families with alternative coverage options.

Utah officials have already posted a notice on the state’s website, alerting families that the program could end in January. If a family member decides to pay their premium or just access their CHIP account, they’ll see the alert. Tom Hudachko, a spokesperson for Utah’s health department, recently told ThinkProgress that they too intend to send letters to affected families, but don’t have a date set yet.

The short-term spending bill that was passed last week did free up leftover CHIP funds to states with emergency shortfalls — states like Virginia. While it’s technically true that the state isn’t expected to exhaust funds until March 2018, Medicaid and CHIP Payment and Access Commission (MACPAC) failed to further contextualize how state officials pay for the program.

“All these kids have to be enrolled in managed care so we pay for the previous month’s service converge,” Nablo said. Meaning: January is the last month for which Virginia officials can fully pay.

MACPAC or the Centers for Medicare and Medicaid Services, a division within the Department of Health and Human Services, provides an accurate estimate of when they project federal dollars will exhaust. “[But] it doesn’t take into account the unique circumstance of each state,” Nablo said. She pointed to Texas which is expected to exhaust funding sooner than expected because of Hurricane Harvey.

CORRECTION: An earlier version of this story said that Virginia officials began notifying families who receive coverage through CHIP on Monday. It has been updated to reflect that the letters will be mailed on Tuesday. The post also now includes a screen capture of the letter.