Latest Continuing Resolution Funds Six Years of CHIP

Yesterday, after a three-day federal government shutdown, Congress passed a continuing resolution (CR) bill that was quickly signed into law to keep the federal government operating through Feb. 8, 2018.

After months of delay, Congress included new, long-term funding for the Children’s Health Insurance Program (CHIP) in the CR. Since September 2017, when consistent federal funding for the program ended, state CHIP programs have faced an uncertain future and maintained operations through reallocated federal dollars, short-term federal funding that was provided in a Dec. 21, 2017, CR, and in some cases, state funds.

The latest CR:

  • Extends federal funding for CHIP for six years (FFY 2018-FFY 2023), with some adjustments for FFY 2018 to avoid duplicate payments because of the short-term federal funding that was provided in the earlier Dec. 21, 2017, CR;
  • Continues the 23 percent enhanced CHIP match rate for FY 2018 and FY 2019, and then reduces it to 11.5 percent in FY 2020, after which it is eliminated and the match rate will return to states’ regular enhanced CHIP match rates;
  • Continues the maintenance of effort (MOE) requirements for children through FY 2019 as in current law, and then extends the MOE through FY 2023, but only for children in families with incomes under 300 percent of the federal poverty level (FPL);
  • Extends the following through 2023:
    • Qualifying state option, which provides the CHIP-enhanced matching rate for Medicaid-enrolled children in statesthat had expanded children’s coverage before the establishment of CHIP in 1997;
    • Authority for states to use Express Lane Eligibility (ELE); and
    • Funding for the childhood obesity demonstration project, the pediatric quality measures program, and for outreach and enrollment grants, including an addition of parent mentors as an option for that outreach initiative.
  • And, allows states to include CHIP children and those enrolled in look-alike programs in the same risk pool, and specifies the CHIP look-alike programs qualify as minimum essential coverage.

The CR also affects implementation of the following Affordable Care Act (ACA) tax provisions:

  • The medical device tax is delayed through Dec. 31, 2019;
  • The excise tax on high-cost, employer-sponsored health coverage (the ACA’s “Cadillac tax”) is delayed through Dec. 31, 2021; and
  • It provides a one-year moratorium on the annual fee (excise tax) imposed on health insurers for calendar year 2019 (which will not affect fee collection in 2018).