House Committee Votes to End CHIPRA Bonus Funding

A House committee voted last week to eliminate the funding that had been set aside to give states bonuses for significant increases in Medicaid enrollment of children. Wisconsin received a $24.5 million bonus last year for the success of BadgerCare in substantially increasing the number of lower income children participating, and we got a $23.5 million bonus the previous year.

The GOP opposition to the bonus funding strikes me as somewhat ironic because the creation of the bonus funding was an outgrowth of Republican opposition to the Children’s Health Insurance Program Reauthorization Act (CHIPRA) in 2007 and 2008. The arguments they made for focusing on the lower income children contributed to the inclusion of the bonus funding in the bill that was introduced and quickly enacted soon after President Obama took office. When CHIP was first created in 1997, with strong bipartisan support, the idea was to give states a fiscal incentive to expand eligibility of children. That was done by having the federal government pick up a much higher percentage of the cost of covering newly eligible children in states that increased their income cap on eligibility. That strategy has been tremendously successful, but states like Wisconsin had one complaint – we weren’t rewarded for improving coverage of lower income children. When states expanded eligibility and improved outreach, many lower income families with already-eligible kids started signing them up – especially if the state also removed administrative barriers to enrollment. However, states didn’t get the enhanced federal match rate to help cover those increased costs.

President Bush vetoed the CHIPRA legislation twice, arguing that it placed too much emphasis on expanding coverage and not enough on reaching the large percentage of uninsured kids who were already eligible. He had enough support from Republicans in Congress to keep those unpopular vetoes from being overridden. However, after President Obama took office, a new CHIPRA bill was crafted and it set aside a pot of funds to reward states for removing enrollment barriers and significantly increasing participation of Medicaid-eligible children.

Last week the Energy and Commerce Committee Republicans voted to strip about $400 million earmarked for the CHIPRA bonus program over the next two years (before its scheduled expiration in 2014). The House committee’s action won’t be approved by the Senate any time soon, but it could resurface at various stages as the House and Senate try to develop a budget package that both chambers can support. The bonus funding measure is just a tiny part of a $115 billion package of health care cuts that the House is developing, but it’s an important measure for health care coverage of children.

Wisconsin would be hit harder than most other states if the bonus funding is eliminated. As we reported in late December, our state is one of 23 to get a bonus in 2011, and it was the fourth largest award. We anticipate that the 2012 bonus would be at least $20 million.

You can read more about the CHIPRA bonus funds and the potential consequences of repealing that funding in today’s “Say Ahhh!” blog post.

Jon Peacock