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What To Do About CHIP: Colorado Begins Warning Those Enrolled

News  |  By Jack O'Brien  
   November 27, 2017

Colorado official remains 'hopeful' that Congress will take action to end 'frustrating' situation before time runs out.

In response to ongoing turmoil over federal funding of children’s health coverage, Colorado began issuing informational letters to those enrolled in Children’s Health Plan Plus (CHP+) warning that federal funding for the program could soon run dry.

While there are no immediate effects on member eligibility, Colorado’s Department of Health Care Policy and Financing (HCPF) released a statement Monday encouraging members to begin research on their options for private insurance.

Federal funding for the Children’s Health Insurance Program (CHIP), which provides coverage to kids in families with incomes too high to qualify for Medicaid, lapsed September 30 after Congress missed its deadline to renew funding for Fiscal Year 2018. This marks the first time CHIP has been at risk of totally exhausting its funds since it was created in 1997.

Colorado noted that the state maintains sufficient funds to last through January 31, but the future of funding thereafter remains uncertain.

“It’s frustrating that our CHP+ families are facing this uncertainty, especially during the holidays,” said Tom Massey, HCPF’s interim executive director, in the statement. “We are hopeful the federal government will act quickly to renew funding and alleviate further worry by Colorado families who rely on this important program.”

Nearly half a dozen states lacked enough funds to keep their respective programs operational through the end of the year, The Washington Post reported in October. Since then, projections have displayed the severe challenges faced by states and their respective medical systems to operate despite financial constraints from a lack of federal funding.

The nonpartisan Medicaid and CHIP Payment and Access Commission (MACPAC), which provides data analysis, issued a study October 31 that found states will still have access to the remaining federal funds in 2018 but would run out at different points.

MACPAC noted that an estimated $4.1 billion in unspent Fiscal Year 2017 allotments and an estimated $3 billion in redistribution funds are available to states for their CHIP programs. Colorado is projected to receive $61.7 million in unspent allotments and $55.4 million in redistribution funds. That’s nowhere near enough, however, to cover the state’s projected expenses of $302.7 million in Fiscal Year 2018.

States will now have to address how they will provide mandated health coverage to low-income children through not only Fiscal Year 2018, but also Fiscal Year 2019.

Medicaid-expansion states will provide coverage to children while receiving significantly lower federal matching rates. States with separate CHIP programs, however, can terminate the program if funding runs out—a scenario that MACPAC said would leave 1.2 million children uninsured.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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