Citing Congress鈥� failure to restore federal funding of the Children鈥檚 Health Insurance Program, Alabama plans to drop 7,000 kids from coverage on New Year鈥檚 Day, the first step to shutting down coverage for everyone, state officials said Monday.
Those children, who are up for their yearly renewal in January, will not be allowed to continue in the program, and the state also plans to freeze enrollment at the same time. Then, unless Congress acts, Alabama would close CHIP for all 84,000 children on Feb. 1.
Alabama would become the first state to cut off children鈥檚 coverage since Congress failed to renew federal CHIP funding, which expired Oct. 1.
鈥淭his will be devastating for many families,鈥� said Cathy Caldwell, director of Alabama鈥檚 CHIP program, which is marketed to families under the name All Kids.
Colorado, Virginia and other states recently began sending letters to parents notifying them that officials may soon have to curtail their CHIP programs.
Republicans and Democrats in Congress say they support the program, but they have not agreed on where to get the money to pay for it. A third of states anticipate exhausting CHIP funding by the end of January, according to a Kaiser Family Foundation out earlier in December. (Kaiser Health News is an editorially independent program of the foundation.)
The Centers for Medicare & Medicaid Services, which oversees CHIP, has been redistributing billions in unspent funds during the past 2陆 months while lawmakers work on the issue to help states keep their programs running. CMS officials Monday did not respond to requests about when those dollars would run out.
Caldwell said Alabama estimated it would have enough money to cover claims made only through February. She said it made no sense to continue renewing coverage and adding new enrollees in January if CHIP would be ending a month later. About 7,000 children have their coverage renewed each month, she said.
Caldwell said she estimates most CHIP enrollees won鈥檛 find affordable coverage without the program. Fewer than 10 percent would qualify for Medicaid, she said, and many families would find subsidized coverage for children in the Affordable Care Act鈥檚 online marketplaces too costly because it often comes with higher premiums, copayments and deductibles.
Nationwide, CHIP covers 鈥� children typically from families not poor enough to qualify for Medicaid, the state-federal program that covers low-income people.
Income eligibility levels for CHIP vary widely among states, though most set thresholds at or below 200 percent of the poverty level, about $49,000 for a family of four. Alabama has one of the broadest eligibility levels 鈥� , or $78,000 for a family of four.
Unlike Medicaid, CHIP is usually not free. Enrolled families pay an .
Since CHIP鈥檚 enactment, the share of uninsured children fell from , according to the Medicaid and CHIP Payment and Access Commission.
Alabama鈥檚 rate fell from 20 percent to 2.5 percent, Caldwell said.
The Republican-controlled House has voted to extend the 20-year-old program for five years and would fund it by charging richer Medicare enrollees higher premiums and taking money from a public health fund created under the ACA. The Senate has not voted, but Democrats there also refuse to tie any CHIP extension to higher Medicare premiums or siphoning money from the public health fund.
Jim Carnes, policy director of , an Alabama advocacy group, said CHIP is one of the few areas of health policy in which Alabama has led the country.
鈥淲e鈥檝e been called a shining star of the South, and this has really been a very efficient and effective program,鈥� he said. 鈥淭his will really be a huge blow.鈥�
He said freezing enrollment and ending coverage would undo years of expanded coverage. 鈥淭his sends a terrible message to families 鈥� and I can only hope that this decision [by Alabama] adds to the pressure on Congress to act,鈥� he said.
Caldwell said the last time Alabama froze enrollment in CHIP for several months, in 2004, it took several years to convince parents that the program had reopened.
鈥淥nce we deny kids and disenroll kids, we know so many of them won鈥檛 be able to get back on,鈥� she said.
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