Minnesota Health Commissioner: CHIP Failure Calls Reliability of Federal ‘Partners’ Into Question

Congress missed the deadline to reauthorize the Children's Health Insurance Program at midnight on Sept. 30.

From the perspective of health officials at the state level, this inaction on the part of Congress has done more than jeopardize the health of as many as 8.9 million children. A delay in CHIP reauthorization has left state budgets in limbo and has seriously strained the relationship between the federal government and its state health partners.

Perhaps no state feels that more acutely at the moment than Minnesota. According to Emily Piper, commissioner of the state’s Department of Human Services, Minnesota ran out of its CHIP allotment when September drew to a close.

There are three populations covered by CHIP in Minnesota. The first group is made up of children also covered by Medicaid whose family income is above 133 percent of the federal poverty level. About 125,000 children fall into that category.

The second group is made up of about 200 babies, under the age of 2, whose family income falls between 275 percent and 283 percent of the FPL. And the third population is pregnant women who make too much money to qualify for Medicaid but too little to be able to afford private insurance. As many as 1,700 new or expectant mothers are in that category.

Because CHIP has not been renewed, starting on Oct. 1 Minnesota went back to receiving Medicaid’s 50 percent match rate for the first population of low-income children, as opposed to the enhanced 88 percent rate the state otherwise received. That match rate reduction has the potential to blow a $60 million hole in the state general fund.

And, as for the coverage for pregnant women and infants, their care is at risk of being cut off altogether.

In the short term, Piper and her colleagues are working hard on a stopgap fix that would keep that scenario happening.

By the end of October, Piper must decide whether or not to carry over unspent 2017 CHIP funding from September to cover those 1,700 pregnant moms and the 200 infants who rely on the program. She estimates there could be enough money to provide care for those populations for up to nine additional months.

“We would do that without disruption to coverage or changes to eligibility or any other changes to the program,” Piper told Route Fifty. “But the state doesn’t do that, and I don’t make that choice without grave concern around the federal penalty that’s associated with making that decision.”

That carry-over plan would put Minnesota in violation of a federal rule, which could cost the state as much as $10 million.

And Minnesota isn’t the only state facing tough decisions in the short term. Arizona, North Carolina, the District of Columbia and as many as nine other states are estimated to be in the same boat. These states would see their CHIP allotments run out by the end of this year.

It is possible that these states could see some short-term relief from the federal government. In conversations with officials from the Centers for Medicare and Medicaid Services and with Congressional staff members, Piper got the impression that a plan may be in the works to give states with the most dire CHIP funding issues a bit more runway.

“We understand that there’s the potential to get a redistribution of CHIP funds for the states that are going to run out of their 2017 allotments soonest, and Minnesota is on that list,” said Piper.

But, if Congress doesn’t act quickly, there’s only so much the state can do.

“We are working on contingency planning around how to keep people accessing CHIP for as long as we possibly can,” Piper said. “But ultimately we don’t have unlimited contingency planning as a state.”

“Nor do I think any state has that contingency planning,” she added.

When asked about the position congressional inaction has put Minnesota in, and the precedent this situation sets for intergovernmental relations going forward, Piper expressed disappointment and disbelief: “This is a basic responsibility, for Congress to act on reauthorizing a program that it’s had in place since the 1990s.”

“In Minnesota we have been covering kids prior to Congress acting … before CHIP was even created. And now our state budget relies on these appropriations continuing and 127,000 people who receive CHIP do too,” Piper continued.

“We can do temporary solutions and temporary fixes,” Piper acknowledged “but they aren’t without long term budget consequences to the state and ultimately our state, like every state, will be faced with really hard decisions if Congress fails to act for any length of time in reauthorizing this really important program.”

And, when it comes to the relationship between state officials and their federal counterparts, Piper said no matter what happens now the damage has been done.

“We rely on a functioning federal partner—if that’s HHS, or if it’s CMS, or if it’s Congress—to act in a manner that allows us to run the programs that we’re responsible for running in an effective and efficient manner in compliance with state and federal law,” Piper said. “And when our federal partners don’t perform the basic functions necessary for us to continue to operate these programs for the benefit of people, there’s consequences to that. And it creates a lot of uncertainty in states, and a lot of concern about the reliability of our federal partners that we work with so often and rely on.”

In short, “it’s really disconcerting.”

PREVIOUSLY on Route Fifty:

• “Time Is Running Out for the 370,000 Pregnant Women Who Get Health Care Through CHIP”
• “With the Clock Running Out on CHIP Reauthorization, State Officials Are Preparing to Panic”