State: CHIP only viable through January without new funding

By Ben Lockhart

Deseret News

SALT LAKE CITY - The Utah Department of Health will be able to continue paying for the Children's Health Insurance Program through the end of January without a reauthorization of funds by Congress, according to state program director Jeff Nelson, thanks to the availability of backup federal money.

That is a more optimistic timeline than an estimate by the Utah Division of Medicaid and Health Care last month that funds would run out at the end of December if federal legislation to ensure continual health coverage for nearly 20,000 Utah children is not passed.

But Nelson told the Deseret News the question of renewing funding for CHIP remains an urgent one, and needs to be resolved quickly by Congress or else the state will have no choice but to send letters informing Utah parents that their children's health plan is at risk of expiring.

"We've been assured actually that we have bipartisan support for the CHIP program as a whole and that the CHIP program will be reauthorized," Nelson said Friday. "The question is the timing of how that's going to work out."

Nelson said he can't provide a precise date for when parents will be sent letters explaining the funding for CHIP could run out, because that's still being decided. Sending letters too early, he said, could accelerate the dissipation of the program's funding by prompting a rush of claims.

He added it could also result in some parents adding their children to their employers' insurance, at which point it wouldn't be possible for them to switch their children back to CHIP once it regains funding.

"One of the factors is - I don't want to alarm people," Nelson said, but "we do want people to be informed. (The question is) how much do I want to scare folks?"

He said the state CHIP Advisory Council decided last week that in a compromise, information about the risks facing the program will be posted online for parents seeking it out, saying "here's what's going on, but please don't take action."

Nelson said it's possible letters could be sent out in December, but "it really depends on how the funds continue to be used and what we hear from the federal government."

CHIP provides federal insurance for children in families that have low to modest income but earn too much to qualify for Medicaid. A child must belong to a household making less than 200 percent of the federal poverty level.

About 8.9 million children across the country were enrolled in CHIP as of fiscal year 2016, according to the Kaiser Family Foundation, a health care policy think tank.

Will bill succeed?

CHIP has been reauthorized three time since it was first enacted in 1997, typically by large, bipartisan margins in Congress. Its most recent reauthorization expired at the end of September.

A five-year reauthorization bill passed the U.S. House on Friday by a 242-174 vote, but some have voiced worries that obstacles remain in the more-evenly divided Senate due to disagreements between Republicans and Democrats over how to pay for it. Only three House Republicans voted against the bill, while just 15 Democrats voted in support of it.

Many Democrats have criticized the bill, called the CHAMPION Act, for paying for the reauthorization by cutting billions in funding for the Prevention and Public Health Fund established by the Affordable Care Act, reducing the grace period for people who miss premium payments on health plans bought on the federal exchange and raising Medicare premiums for wealthy recipients.

A Congressional Budget Office report estimated last month that the CHAMPION Act would save the federal government $4.9 billion from 2018 through 2027 "as a result" of more people losing their coverage on the federal exchange because of stricter grace period guidelines.

The office's report didn't provide more specifics about how many Americans would lose coverage except to say it was estimated to be "fewer than 500,000."

The budgetary offsets have been lauded as savvy moves by Republicans, including Rep. Chris Stewart, R-Utah, who said Friday that "today Congress worked" by funding "vital programs while completely offsetting the costs with common sense spending reforms."

Stewart was joined by Reps. Mia Love and Rob Bishop, both also Utah Republicans, in voting in favor of the bill.

"The CHIP program has been a priority for me for months, and I have been working with the appropriate committees to get this done. ... I urge the Senate to follow our lead and approve our bill so the health care coverage for these families continues," Love said in a statement.

Bishop could not be reached for comment Friday.

Stewart measure in CHIP bill

Stewart's legislation reauthorizing funding for community health centers - which also expired at the end of September - was rolled into the CHAMPION Act.

"The (National Health Service Corps) program brings access to many Utahns who are living in rural communities and have limited access to care," Stewart said in a statement. "I'm proud of the work the House has done. The Senate must now act on this meaningful legislation to ensure rural Americans have access to quality health care."

Dozens of health centers statewide serve Utahns who are disproportionately uninsured, low income or live in underserved rural areas. Administrators of the centers have sounded the alarm this fall, saying capacity to provide service could be cut in half without federal funding reauthorization and that hundreds of health care providers could lose their jobs.

"We are ... grateful to Representatives Bishop, Love and Stewart for their support of the bill and for Utah's community and homeless health centers," said Alan Pruhs, CEO of Association for Utah Community Health, which provides training to community health centers across the state. "Passage of the bill gets us one step closer to ensuring ongoing access to quality primary and preventive health care for more than 150,000 Utahns."

Pruhs also said he is "concerned about the ability to pass the bill in the Senate given the largely party-line vote in the House."

"We are hopeful that the Senate will be able to find common ground in how to pay for the bill and succeed in passing the bill with broad bipartisan support," he said in an email to the Deseret News.

Jessie Mandle, senior health policy analyst for Voices for Utah's Children, also has reservations about the bill's chance of passing in the Senate.

"I think we'll definitely see challenges in the Senate with these (budgetary) offsets, because they're partisan," Mandle told the Deseret News.

Voices for Utah's Children CEO Lincoln Nehring said Congress is running out of time on what should be slam-dunk legislation.

"I am optimistic that Congress is going to do the right thing, but I am concerned that they have waited too long to prevent those letters from going out," Nehring said. "It didn't have to come to this, but we are where we are and the state has a responsibility to make sure families are aware that changes might be occurring.

"I have no criticism of the state for (considering) sending these letters. My criticism is with Congress."

Hatch's CHIP bill

Sen. Orrin Hatch, R-Utah, is the sponsor of a Senate bill, called the KIDS Act of 2017, that would also extend CHIP funding for five years.

Though Hatch has been working on the measure with Sen. Ron Wyden, D-Ore., details about how it would be paid for are unclear. It is possible Hatch's proposals could be combined in some way with the reauthorization passed by the House on Friday and become the CHAMPION Act's legislative vehicle in the future.

Hatch, who helped found CHIP through a bill he co-sponsored in 1997, has said multiple times this fall that he is eager to see a renewal of the program before any children lose health coverage and that he is confident Congress will find a solution in time. The senator's spokesman, Matt Whitlock, reiterated that sentiment Friday.

"Sen. Hatch was pleased to see the House pass legislation reauthorizing CHIP, a critical priority for the current Congress," Whitlock said in a statement. "In the coming weeks he will continue to negotiate and work with colleagues to chart the best path forward for the program."

Whitlock added that Hatch "intends to ensure the president has a bill to sign into law before the end of the year" and that it would happen "well before funding expires."

The office of Sen. Mike Lee, R-Utah, declined to comment Friday when asked about the House's passage of the CHAMPION Act.

Nelson is cautiously hopeful that Congress will pass reauthorization of CHIP by the end of December, but is anxious for lawmakers' "level of urgency" to "be maintained."

"(It's) almost a fire drill, if you will," he said. "But we don't know what we don't know and uncertainty is very difficult for states."

The state is not authorized to run a deficit to keep CHIP going, Nelson said, and if reauthorization never materialized would have no choice but to cancel coverage for families, most of whom don't have the option to move their children to employer-sponsored plans.

The money that allows Utah to extend the insurance program through the end of January comes from a pool of states' previously unspent surplus CHIP funds, he said.

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Credit: By Ben Lockhart Deseret News