AUSTIN — If federal funding doesn’t come through, Texas may have found a way to extend the Children’s Health Insurance Program a few more weeks.
Texas agencies are considering an accounting trick to leave more money in the program. By not taking matching money from the federal government for kids who used to be enrolled in CHIP but are now covered by Medicaid, Texas can stretch the remaining federal funds for CHIP.
The tactic isn’t a long-term solution. Texas House Speaker Joe Straus wrote a letter asking state Health and Human Services Commissioner Charles Smith to support the option as a “temporary bridge.”
“While I am cautiously optimistic regarding federal efforts, I do want to ensure that the state is prepared to move quickly and prudently should Congress fail to act in a timely manner,” Straus wrote.
Spokeswoman Carrie Williams confirmed that the Health and Human Services Commission has discussed possible ways to extend CHIP with the Legislative Budget Board, including forgoing the federal match funding for a few months.
“We’re all working together to assess contingency funding options and analyze the risks they may carry for state taxpayer dollars if federal funding doesn’t come through in time,” Williams said in an email. “We’re open to exploring options and doing what’s best for Texas under the direction of state leadership. We’re hopeful that federal funds will be made available to carry the program through February, and that Congress renews the program soon.”
Congress allowed CHIP funding to expire Sept. 30. Since then, the commission has requested an extra $90 million from the federal government to keep CHIP through February.
The commission has signaled that it feels confident that additional money will be approved but is waiting for written commitment from the federal Centers of Medicare and Medicaid, expected by Saturday, before mailing CHIP cancellation notices to families.
For Texas kids enrolled in CHIP, the federal government matches 92 percent of the money the state puts in — a much higher rate than the 56 percent funding match for those enrolled in Medicaid. The higher match funding for CHIP goes to Medicaid to cover Texas children who switched from CHIP to Medicaid.
If the state uses the accounting trick, Medicaid will temporarily lose some of its support, but Texas would be able to reclaim the money retroactively if Congress reauthorizes CHIP funding.
Anne Dunkelberg, associate director of the Center for for Public Policy Priorities, a center-left think tank, said this method could result in a significant amount of funding for CHIP because its match rate is dramatically higher than for Medicaid.
“It’s wonderful to see creative thinking going on about how we can postpone what will be a tremendous waste of state money and effort and tremendous stress for 400,000 children,” said Dunkelberg, a former state Medicaid official. “If we can use creative but legitimate financing methods to make the money stretch further, it would be huge.”
As of August, CHIP covered 402,500 children in Texas and nearly 35,000 women. Dallas County has 50,000 kids enrolled in the program.