States prepare to shut down children's health programs if Congress doesn't act

Marbell Castillo holds her granddaughter Maia Powell during the toddler's recent checkup at Burke Pediatrics in Fairfax County, Virginia. Maia is covered through the Children's Health Insurance Program. Marbell Castillo holds her granddaughter Maia Powell during the toddler's recent checkup at Burke Pediatrics in Fairfax County, Virginia. Maia is covered through the Children's Health Insurance Program. Photo: Washington Post Photo By Matt McClain Photo: Washington Post Photo By Matt McClain Image 1 of / 5 Caption Close States prepare to shut down children's health programs if Congress doesn't act 1 / 5 Back to Gallery

Officials in nearly a dozen states are preparing to notify families that a crucial health insurance program for low-income children is running out of money for the first time since its creation two decades ago, putting coverage for many at risk by the end of the year.

Congress missed a Sept. 30 deadline to extend funding for CHIP, as the Children's Health Insurance Program is known. Nearly 9 million youngsters and 370,000 pregnant women nationwide receive care because of it.

Many states have enough money to keep their individual programs afloat for at least a few months, but five could run out in late December if lawmakers do not act. Others will start to exhaust resources the following month.

The looming crunch, which comes despite CHIP's enduring popularity and bipartisan support on Capitol Hill, has dismayed children's health advocates.

"We are very concerned, and the reason is that Congress hasn't shown a strong ability to get stuff done," said Bruce Lesley, president of Washington, D.C.-based First Focus, a child and family advocacy organization. "And the administration is completely out, has not even uttered a syllable on the issue. How this gets resolved is really unclear, and states are beginning to hit deadlines."

Others paying close attention to the issue remain hopeful that Congress will extend funding before January, but states say they cannot rest on hope.

"Everybody is still waiting and thinking Congress is going to act, and they probably will, but you can't run a health-care program that way," said Linda Nablo, chief deputy director at Virginia's Department of Medical Assistance Services. "You can't say 'probably' everything is going to be all right."

Most CHIP families, who earn too much for Medicaid but too little to afford private insurance, are not aware lawmakers' inaction is endangering coverage. They're about to find out, though. Virginia and several other states are preparing letters to go out as early as Monday warning families their children's insurance may be taken away.

The Centers for Medicare and Medicaid Services (CMS), which administers the program at the federal level, issued a notice to state health officials on Nov. 9 detailing their options if CHIP funding does run dry. States forced to end the program will need to determine whether enrolled children are eligible for Medicaid or whether their family will need to seek insurance through an Affordable Care Act marketplace, the guidance said.

Longtime physician William Rees remembers the years before CHIP's safety net, when families without coverage would put off bringing a sick child to the doctor until symptoms were so severe they would end up in a hospital emergency room.

"Pediatrics is mostly preventive medicine, it's so important what we do," said Rees, who has practiced in Northern Virginia since 1975. "It's about trying to keep up with routine visits. If (children) don't have insurance, that often doesn't happen, so CHIP keeps them in the system and they get their vaccines when they're due."

The program, which is credited with helping to bring the rate of uninsured children to a record low of 4.5 percent, has been reauthorized several times over the years. And under the ACA, the federal government sharply boosted its match rate. It now provides 88 percent or more of every state's CHIP costs.

Congress has been unable to agree on how to pay for the $15 billion program moving forward, however. President Donald Trump's 2018 budget proposed to cut billions from CHIP over two years and limit eligibility for federal matching funds.

The uncertainty has states scrambling. Arizona, California, Minnesota, Ohio, Oregon and the District of Columbia will run out of CHIP money by Dec. 31, according to Georgetown University's Center on Children and Families. At least six more plan to take some sort of action to address the potential funding loss, including notifying parents their children are at risk of losing coverage.

Some states operate CHIP as an independent program and would have to shut theirs down if federal dollars dry up. In Virginia, resources are expected to be exhausted by late January. Nablo said she has no choice but to send notices Dec. 1 to the families of the 66,000 children and 1,100 pregnant women in the state who are covered.

"We don't want to act too fast if Congress is going to restore this, but we also want to give families enough time," she said. "We have kids in the middle of cancer treatment, pregnant women in the middle of prenatal care."

Texas plans to notify families in January that the program could end. Funding problems there were exacerbated by Hurricane Harvey because the state asked the federal government that it be allowed to waive co-pays and enrollment fees for CHIP children in counties declared disaster areas. With less money coming in, funds could be exhausted even sooner than the state first projected, according to Christine Mann, spokeswoman for the Texas Health and Human Services Commission.

In West Virginia, where CHIP funds are expected to run out in March, officials overseeing the program voted this month to shut it down Feb. 28 if Congress hasn't acted.

Other states, including Maryland, developed their CHIP program as an extension of Medicaid and so are required by law to find a way to keep it going. The same applies to the District, which will need to come up with as much as $12.5 million in local funds to cover the approximately 14,000 children enrolled, the D.C. Department of Health Care Finance said. The agency will begin looking next month at where money can be diverted.

"It's pretty chaotic out there," said Joan Alker, executive director at the Georgetown center. "What really troubles me about it is (CHIP) is successful. Everyone should feel good about it. There's no reason for this to be lagging on like this. This should be an easy win for Congress."

CHIP has become a political issue in the gubernatorial race in Maryland, where funding would run out in March. Gov. Larry Hogan, R, has pressed for Congress to pass a reauthorization. A potential Democratic opponent, Ben Jealous, has criticized him for not having a backup plan to protect the 140,000 children who would be left uninsured.

In Washington, lawmakers in both parties agree on the program's merits but are at an impasse over how to pay for it. The House passed a bill this month along largely party lines to extend CHIP funding for five years in part by cutting an ACA prevention fund and raising Medicare rates for wealthier seniors.

That measure unlikely to be taken up by the other chamber. Senators, led by Finance Committee Chairman Orrin G. Hatch, R-Utah, are working to find a bipartisan solution. Hatch was one of the authors of the original CHIP legislation in 1997. The other was Sen. Edward M. Kennedy, D-Mass., who died in 2009.

"I am working with my colleagues to advance this bill in a fiscally responsible manner so we can ensure coverage is maintained," Hatch said in a recent statement. Yet during a heated exchange last week in a committee meeting on the GOP tax overhaul, he voiced little urgency.

Back up your concern for the poor by starting with an extension for CHIP, Sen. Sherrod Brown, D-Ohio, told Hatch.

Hatch responded angrily, "I'm not starting with CHIP."

Andy Slavitt, who was acting CMS administrator under President Barack Obama, can't believe there is anything to debate. That Congress would hold up popular legislation that has never before been subject to politics speaks to the "very fragmented culture of lawmaking," he said.

"It's a core program that many low-income families rely on. It's widely acclaimed to be a success," he said. "We're operating in a mode that we don't do anything until it's an absolute crisis, and we're creating more crises that don't need to happen."

When Congress failed to extend funding in late September, CMS was able to provide several states and U.S. territories with emergency money to keep their programs going a bit longer. The agency has used about $542 million in leftover funds from previous years, but it has limited resources to assist much longer.

As families hear that their children could lose health insurance, they're shaken. Marbell Castillo learned about the possibility during a recent checkup with her granddaughter Maia Powell at Burke Pediatrics in Fairfax County, Virginia.

The appointment, in an exam room decorated with "Toy Story" and "Finding Nemo" decals, covered the gamut. A nurse practitioner asked about what the 16-month-old was eating and when she slept. Maia got her height, weight and temperature taken. She also got her chubby thighs stuck once, twice, three times with vaccinations for diphtheria and other illnesses.

Castillo walked out with Maia balanced on one hip and worries on her mind. She often takes the little girl to appointments so her 23-year-old daughter, who works two jobs, doesn't have to take off.

Without CHIP, Castillo wondered, what would they do for affordable health insurance for Maia?

"They can't leave people without this program," she said.