How Do You Tell Tens of Thousands of Parents Their Children May Lose Health Coverage?

Linda Nablo, the chief deputy director of the Virginia Department of Medical Services, and other state officials know how to send a letter canceling Children’s Health Insurance Program coverage on an individual child. There’s a precedent for that. This situation is different.

As the days pass and congressional efforts to reauthorize CHIP continue to stagnate, officials like Nablo have to decide exactly what to tell the program’s beneficiaries—in Virginia that’s 67,000 children and 1,100 pregnant women—and when.

Virginia must inform all of these people that there’s a possibility their health care coverage might be cut off, without causing them to panic. Officials are reaching out to each other across state lines to share ideas as to how to do that and, as Nablo said, to “commiserate,” but no state agency has ever taken on this task before.

“This is new territory,” Nablo said.

On Monday, Colorado became the first state to mail a CHIP warning letter to beneficiaries. And, according to Nablo, Virginia officials are using the Colorado letter as a model for their own.

The Colorado letter is clear that there are no immediate changes to CHIP, that Congress can pass a law at any time to renew federal funding for the program but that “there is no guarantee that they will.”  

Here’s how Nablo describes all the things the draft Virginia letter hopes to accomplish.

The short version is basically, “we don’t want to scare you, but maybe, your child’s going to lose their health care coverage Jan. 31. It all depends on Congress. We’re hopeful that they’ll act. Right now everything’s fine. Don’t panic … Check this website out for the latest information and we’ll let you know if your child’s coverage is cancelled. And in the meantime you should think about these things and do these things.”

But no matter how tempered the language in the letter is, there’s no doubt in Nablo’s mind that sending this message to thousands of Virginians will cause alarm and fear.

“I think if we have to send those letters, even if we turn around a week later saying ‘never mind, good news Congress passed this,’ I think it will shake people’s confidence in the program and I think it will further the image that you can’t trust government. How do you calculate that damage?”

‘I Would Have Never Thought They Would Let It Get to This Point’

If you had told Nablo back in September that the Children’s Health Insurance Program would be in its current precarious position today, she wouldn’t have believed you.

“What are we, almost 60 days past the end of the funding?” she asked incredulously in a phone conversation with Route Fifty on Wednesday. “I would have thought back then that they would take us right up the wire perhaps—which they had never done before—or worse-case scenario, end of October. I would never have thought they would let it get to this point.”

Back in mid-September, when Route Fifty and Nablo first spoke, the looming end-of-the-month deadline was concerning, but officials at the state level were still focused—at least in part—on more niche CHIP issues. The single most important aspect of the CHIP reauthorization at the time appeared the federal government’s match rate, which had been enhanced by the Affordable Care Act. A return to pre-ACA match levels would have blown a significant hole in state budgets. Now, however, that worry seems almost quaint.

“It’s certainly an important issue to states,” Nablo said, “but at the moment we’re just talking about survival of this program.”

The more immediate problem is this: Within the next few days, weeks and months the CHIP programs in Virginia—and a handful of other states—are going to run out of money. No state program has enough funding to last through the end of 2018, but some may not even make it through the end of this year.

The federal Centers for Medicare and Medicaid Services has the power to distribute unspent CHIP funds to states. So far, between the months of October and November, CMS has given out more than $600 million to 14 states and territories out of a total pot of less than $3 billion. More requests for emergency funding are pending. Nevada has filed a request for $11.3 million. And, according to Nablo, Virginia has asked for roughly $32 million.

But, that money is only a short-term fix for states. Virginia officials have factored the $32 million into their estimates for when the state’s CHIP funding will run dry. Even with the CMS reallocation, Virginia’s program can only last through the end of January 2018.

And that’s why timing matters just as much—if not more—than even the content of the letter.

It’s All in the Timing

As of now, Nablo is thinking the letters will be sent in “early December,” clinging to the hope that they won’t have to be sent at all. The latest theory is that Congress will use the continuing resolution, which funds the government, as a vehicle to pass CHIP reauthorization. That must be done on or before Dec. 8.

“What I don’t want to do is send the letter on Dec. 1 and turn around on Dec. 9 and say ‘sorry, ignore that first letter,’” said Nablo. “I think that will just exacerbate the problem.”

But, when asked if she thinks officials in Colorado jumped the gun by sending their letter this early, Nablo emphatically said no. “I very much understand why they did it.”  

“There’s no good answer here,” said Nablo. “You either scare people unnecessarily, but get them informed, or you delay and maybe delay too long for them to actually be able to do anything for their child once CHIP ends.”

Nablo says she “owes it” to her beneficiaries to give them this information, even if it means her agency could be thrust into a vortex of confusion and concern.

“The truth of the matter is, if this happens”—meaning if CHIP is shut down—”most of the kids will just plain go without insurance.” But, Nablo said, “some families may have options, and they need to be working on those options … especially if they want their child not to have a break in their insurance coverage.”

“I’m mostly concerned about families,” Nablo said, “but it’s going to have ripple effects.”

“You’ve got providers too, you’ve got pediatricians out there, hospitals who’ve got kids who are in the middle of a course of treatment being paid for by CHIP are going to have questions.”

The Cost of the CHIP Delay to States May Never Been Fully Quantified

Everyone in the entire health care system is going to have questions—families, doctors, billing clerks in medical offices—they will all need to be kept in the loop.

In preparation, Virginia has formed a working group made up of representatives from as many as 20 different divisions within the Department of Medical Services. Each division is plotting out the best way to make the changes they will be responsible for in the event that CHIP is forced to shut down.

Shuttering an entire statewide program is no small task, but on top of that, these states have the added challenge of needing to figure out how to stop processes in a way that makes it easy to start them back up again. For instance, not only would an IT system need to be capable of disenrolling 68,000 people in a single day, but it also needs to be able to turn around and get everyone back on the system if reauthorization comes through.

“I don’t know if the states will ever be able to quantify the loss for the redirected man-hours and the consequences of that,” said Nablo.

“We didn’t see this coming, we didn’t know it was going to happen, we didn’t hire extra staff to work on it. Here we are very unexpectedly in an urgent situation and the only way to deal with that it to take staff off of other projects.”

The Frightening Precedent This Process Has Set

Out of all of this, it isn’t the letter, or the waste of state resources, time and manpower that concerns Nablo the most. What really frightens her is the precedent Congress has already set in letting the CHIP reauthorization drag out as long as it has.

“If this is now going to become more the norm, that you can let the deadline go, that you can let federal funds wind down and as long as you catch it before the very last dollar runs out, that that’s okay, and states will just bear it, and deal with it, that’s going to be a frightening scenario in a lot of ways,” Nablo said.

To Nablo, the story of why CHIP has been left languishing on the congressional back burner is obvious.

“Let’s face it, CHIP’s being held hostage here, to other political and ideological differences. It’s not about CHIP. But it’s becoming the victim of other disagreements. And that’s really scary,” she said.

“You keep being told, ‘of course Congress will act, of course they will, yes, yes, they will act.’ But this cavalier attitude of ‘we don’t have to act until the money is all gone,’ or ‘we don’t have to act until the families have all gotten these letters and we’ve caused a panic,’ that’s a frightening way to approach government.”

It almost makes Nablo wonder, 60 days after the deadline, if Congress hasn’t paid attention yet, what would it take to garner some political oxygen for this program.

“I don’t want to send the letter just to generate momentum and get Congress’ attention. That’s not right. But, on the other hand that may be the only way they really understand the impact this is having.”