On October 4, 2017, the U.S. Senate Finance Committee approved a bill that would reauthorize federal funding through FFY 2022 for the Children’s Health Insurance Program (CHIP), a program that currently serves over nine million low-income children. New funding authorization for CHIP expired on September 30, 2017. For now, states are operating CHIP on federal allotments left over from prior years. Those reserves vary widely from state to state.

The new Senate bill would extend through FFY 2019 a 23 percentage point increase in the CHIP federal matching rate that was enacted as part of the Affordable Care Act (ACA). The Senate bill would cut that increase in half in FFY 2020 and eliminate that increase in FFY 2021. But it would extend through FFY 2022 the child enrollment contingency fund as well as the Express Lane eligibility option, through which states can use income data from other programs to determine CHIP eligibility.

The U.S. House of Representatives is considering a similar CHIP reauthorization bill which, in addition, would delay $2 billion in cuts to Medicaid disproportionate share hospital (DSH) payment allotments scheduled for FFY 2018. The House bill would delay the Medicaid DSH cuts until FFY 2019. The House Energy and Commerce Committee cleared that bill on October 4, 2017.

If enacted, the Senate and House bills would have major, immediate implications for state Medicaid/CHIP budgets and program operations. PCG will monitor on-going developments.