Roughly 200,000 Bay Area kids could lose their Medi-Cal health insurance after Congress failed to renew funding for the Children’s Health Insurance Program, according to a report released at the end of October by the California Department of Health Care Services.
More than 5 million kids in California receive health insurance through Medi-Cal, a program for low-income residents. Of those, 25 percent are funded through the Children’s Health Insurance Program, more commonly referred to as CHIP.
CHIP covers children whose families make too much money to qualify for Medicaid, but not enough to reasonably afford private health insurance.
In California, CHIP funding is filtered into Medi-Cal to make the application and enrollment process as “seamless” as possible, according to Michael Odeh, health policy director of Children Now, an Oakland-based advocacy group. This means that families whose children’s Medi-Cal insurance is funded by CHIP likely don’t know that this inaction in Congress could directly affect them when California runs out of its funds, which is expected to happen around January.
Since it was established in 1997, CHIP has enjoyed bipartisan support. But the House bill that passed on Nov. 3 would fund CHIP, in part, by cutting programs under the Affordable Care Act, a move Democrats opposed. The House bill will likely not pass in the Senate because Republicans do not have the 60 seats needed to bring the bill to a vote.
CHIP funding was last renewed in 2015, giving legislators and children’s health advocates like Odeh only two years to ensure the program would be reauthorized again.
“As soon as we sort of got that money [in 2015], we’ve had to think about reauthorizing,” Odeh said.
Now that Congress has failed to act, it is difficult to say how states will move forward and when families will be notified of changes in their children’s policies.
If California is forced to make changes to coverage or unenroll children, families will likely be given a month’s notice, according to Barbara Texidor, a staff attorney at Bay Area Legal Aid. The long-term problem with unenrolling is that families may become wary of government health programs and not enroll their children in the future, according to Odeh.
“I think there’d be hesitance to re-enroll in a program that you just got kicked off of,” Odeh said.
One month is little time for families to grapple with that impossible decision: leave their children uninsured or pay significantly more for their children’s health care.
For a family of four in California making $46,000 a year, which is the middle income for the CHIP eligibility window, the monthly premium to insure a nine-year-old could go from $13 or less to about $224.75, based on 2013 average marketplace premiums calculated by the Henry J. Kaiser Family Foundation.
Advocates like Odeh are still working toward CHIP funding renewal and are hesitant to alert Medi-Cal families of this potential deadline if Congress doesn’t act and California is unable to compensate for lack of federal funds. Odeh said he does not want to instill needless fear in parents regarding the reliability of Medi-Cal coverage.
“We don’t want to say, ‘The CHIP program is going away. You’re going to get disenrolled,’ because that’s not really the case at this point in time” Odeh said, “But it is sort of a worst-case scenario for us.”
The issue of parents not knowing that CHIP is responsible for their kids’ coverage is not isolated to California: 4.7 million of the 8.7 million kids using CHIP funds are doing so through a state Medicaid program, according to the Medicaid and CHIP Payment Access Commission, a nonpartisan agency that advises Congress. Like Medi-Cal, those programs go by a different name and don’t necessarily indicate to parents that their child’s eligibility is made possible by CHIP.
Under the Affordable Care Act, states that use CHIP funds to expand Medicaid programs are required to maintain their insurance eligibility requirements for children through 2019. The lack of federal funding for CHIP does not relieve states of that requirement, according to Alicia Kauk, an attorney for National Health Law Program; it just makes it harder for states to meet it.
The resulting budget strains may force California to make changes that impact the quality of coverage through Medi-Cal. The loss of federal funding will likely lead states to reduce access by “lowering provider payment rates or increasing requirements for prior authorization,” according to the Medicaid and CHIP Payment Access Commission.
While all CHIP programs are funded both federally and by the state, the federal funds greatly outweigh the state’s contribution. In 2016, California contributed roughly $534 million to its CHIP Medi-Cal enrollees, while the federal government contributed over $2.4 billion, according to the Kaiser Foundation. On average, the federal government spent 12 times what each state spent on their own CHIP program.
While California is a state that has demonstrated a commitment to children’s health insurance (with a historic level of 97 percent of children enrolled), Medi-Cal will not be impervious to a lack of federal CHIP funding. Without renewal by Congress, those changes will begin to directly impact California families, come 2018.
“You know, we can talk about dollars, we can talk about families impacted, but I think, ultimately, the peace of mind that CHIP and Medicaid bring to families is, I think, unquantifiable,” Odeh said.