FUTURE OF THE CHILDREN’S HEALTH

INSURANCE PROGRAM (CHIP)

SENATE FINANCE SEPTEMBER 21, 2017

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Virginia’s CHIP Covers 3 Distinct Groups

MCHIP 58,224 enrollees (47%) Ages 6-19 100-143% FPL

FAMIS 65,032 enrollees (52%)

Ages 0-19 143-200% FPL

FAMIS MOMS 1,146 enrollees (1%) Pregnant women 143-200% FPL

Note: Represents total enrollment of 124,402 as of September 2017.

Timeline of CHIP

CHIP introduced

in the Balanced

Budget Act of 1997

Children’s Health

Insurance Reauthorization

Act of 2009 (CHIPRA)

amends CHIP

Funds CHIP for 5 years

Medicare Access and CHIP Reauthorization

Act of 2015 (MACRA) funds CHIP through

FFY 2017

PPACA introduces

super enhanced FMAP (88%) for

CHIP through FFY 2019

Funds CHIP

through FFY 2015

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Current CHIP funding expires

Virginia runs out of

federal CHIP funds

Additional consideration

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Maintenance of Effort (MOE) Requirements • PPACA requires that states maintain the same eligibility

levels in place as of 3/23/2010 until 9/30/2019 • If federal CHIP funding is not provided, does not apply to

FAMIS recipients • BUT, would still apply to MCHIP recipients who

would revert to a 50/50 match

Potential Scenarios for Congressional Action

Any action, other than funding CHIP at the enhanced matching rate, will increase Virginia’s costs and potentially lead to coverage losses

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Funds CHIP by 9/30/2017 Amends current law to reduce

matching rate to 65%

Funds CHIP by 9/30/2017 Maintains current law with

enhanced matching rate (88%)

Takes no action to fund CHIP

Congressional Action Impact on Virginia

FY 2018 forecast will need to be amended to increase general funds to account for reduced matching rate

No impact on current forecast Super enhanced FMAP (88%)

ends in FY 2020 (9/30/2019)

Federal funding will run out in early 2018

State policymakers will need to make decisions soon

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Scenario 1: Congress funds CHIP and does not adjust matching rate

Federal CHIP funds are provided at 88% matching rate

This scenario is current law and already incorporated in the CHIP forecast Reduction in FMAP to 65% occurs in FY 2020 (9/30/2019)

FY 2018 FY 2019

Federal matching rate as of 10/1/2017 FAMIS and FAMIS MOMS 88% 88% MCHIP 88% 88%

Additional GF costs FAMIS and FAMIS MOMS $0 $0 MCHIP $0 $0 Administration $0 $0

Total additional GF costs $0 $0

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Scenario 2: Congress funds CHIP but reduces the matching rate

Reducing the matching rate will result in additional GF costs in FY18 and FY19

FY 2018 FY 2019 Federal matching rate as of 10/1/2017

FAMIS and FAMIS MOMS 65% 65% MCHIP 65% 65%

Additional GF costs FAMIS and FAMIS MOMS $28.9M $41.8M MCHIP $24.2M $35.3M Administration $4.5M $6.0M

Total additional GF costs $57.6M $83.1M

If Congress reduces the matching rate, Virginia will experience significant unplanned expenses in FY 2018 and FY 2019 to maintain current coverage levels

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Scenario 3: Congress passes the KIDS Act

Maintains 23% bump in FFY18 and FFY19 Reduces bump to 11.5% in FFY20 Returns to original CHIP match in FFY21 and FFY22

CHIP authorized for 5 years; MOE requirement is continued through 2019 and then is only required for children under 300% FPL through 2022

FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 Federal matching rate

FAMIS and FAMIS MOMS 88% 88% 76.5% 65% 65% MCHIP 88% 88% 76.5% 65% 65%

Additional GF costs FAMIS and FAMIS MOMS $0 $0 $23.5M $54.1M $58.0M MCHIP $0 $0 $21.0M $45.0M $48.0M Administration $0 $0 $2.9M $6.3M $6.7M

Total additional GF costs $0 $0 $49.2M $105.3M $112.7M

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Scenario 4: Congress does not fund CHIP but GA continues coverage

End FAMIS and extend Medicaid to cover FAMIS when funding runs out in early 2018

FY 2018 FY 2019 Federal matching rate when CHIP funding runs out in January 2018

FAMIS and FAMIS MOMS 50% 50% MCHIP 50% 50%

Additional GF costs FAMIS and FAMIS MOMS $26.5M $69.1M MCHIP $22.2M $58.3M Administration $4.1M $9.9M

Total additional GF costs $52.9M $137.3M

• No one would lose coverage • DMAS would need authority to submit a state plan amendment to CMS

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Scenario 5: Congress does not fund CHIP and FAMIS ends:

DMAS will need to engage in extensive transition planning to end FAMIS: • Notification to families (65,000+) • Notification to providers • Training of Eligibility Workers, Call Centers, Application Assistors, etc. • System changes (Eligibility rules and MMIS) • Contract changes (MCOs, prior authorization, audits, etc.) • Federal authority changes (CHIP State Plan termination, Medicaid

state plan amendment, 1915(b) waiver amendment), • State authority changes (General Assembly to repeal FAMIS & expand

Medicaid, state regulation modifications) • Plus much more

65,000 children and 1,100 pregnant women lose coverage

How Long Can We Wait?

Virginia will run out of federal funds sometime in March, 2018

We pay managed care plans retroactively for the previous month’s coverage – so there will be insufficient funds in March to pay for February

FAMIS shuts down at end of January

Termination notices to families should be sent December 1st

Training and system/contract changes developed before notices

Planning must start in October

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