State funds could be used if Congress fails to renew CHIP

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Maryland’s legislature could consider creating a state backstop for the Children’s Health Insurance Program in the event Congress does not reauthorize the program.

Federal authorization for CHIP expired in September. Funding designated for the 146,000 children covered in Maryland will run out by April, drawing the ire of Maryland leaders.

“I think the state’s going to have to find a way to pick up the cost, because that’s over $100 million,” said Maryland House Speaker Michael E. Busch. “I don’t think anyone in the state wants to leave 142,000 kids in the state without health care. It would be a tragedy if that took place.”

In a letter to congressional leaders of both parties Tuesday, Gov. Larry Hogan pushed for the program’s immediate renewal.

He noted that costs to the state to keep the program going will increase to $30 million in the current fiscal year, and $121 million in the 2019 fiscal year.

“Meeting the federal commitment to this program soon will avoid unnecessary disruption to the health care needs of millions of our children in the coming year,” he wrote. “We should all be able to agree that needy kids should never become a political football.”

A state lawmaker who works on health issues on the Appropriations Committee said the state would find the money to replace what is lost but that it would not be easy.

Del. Kirill Reznik, D-Montgomery, said the state could look at an option that would backstop what the federal government provides by setting aside state funds for the program and then offsetting that appropriation with federal funds when they come through.

“Any federal funds that we get in the future would offset state funds,” Reznick said. “There is no way I am going to leave this session without making sure that kids have adequate insurance.”

But once those funds rise to more than $100 million, it could be more difficult to work within the current revenue framework. At that point, Reznik said, raising revenue could be necessary.

It is widely expected that CHIP will be included by Congress in an omnibus spending bill before the end of the year. But some states expect their money to run out before the end of year, or in January. In Maryland, the state has a little longer before funds run out. Once they do, expected to happen by April, Maryland’s federal match for the program will change.

Currently, the federal government matches 88 percent of what Maryland puts into its state program, the Maryland Children’s Health Insurance Program. After funding runs out, that match will revert to 50 percent.

The program provides health insurance for children under the age of 19 whose families’ modified adjusted gross income level is at or below 211 percent of the federal poverty level, depending on size. In Maryland in 2017, that was $51,273 for a family of four.

For children in households making 322 percent of the federal poverty level, families can pay a monthly premium of $54 or $67, depending on household income.