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Gov. Brown directs OHA to preserve kids' insurance program

Federal funding expired in September and Congress has yet to reauthorize the program.

PAMPLIN MEDIA GROUP - Gov. Kate Brown has ordered the Oregon Health Authority to guarantee coverage for children and pregnant women covered by a federal program that's in limbo. Congress has yet to reauthorize funding for the Children's Health Insurance Program, which expired in September.SALEM — Oregon Gov. Kate Brown on Monday directed the state's health agency to guarantee coverage for children and pregnant women covered by a federal program that's in limbo.

Oregon is one of three states that will run out of federal funding for the Children's Health Insurance Program, or CHIP, in December, according to OHA. Up to half of the states will be out of federal money by February.

Brown directed OHA to maintain coverage of groups covered by CHIP for the first four months of 2018. That would cost the state about $35 million.

About 121,000 kids and 1,700 pregnant women are covered by the program in Oregon.

CHIP generally enjoys broad political support, but Congress is now well past its Sept. 30 deadline to reauthorize funding for the program.

But Oregon officials expect Congress to reauthorize the funding and to pay the state back.

"While this additional cost was not in the Oregon Health Authority's legislatively approved budget, we can manage this on a short-term basis because it is early in the biennium," OHA Director Pat Allen wrote in a Nov. 17 letter to Brown. "We will spend more of our appropriated state funds earlier to make up for lost federal funds."

Allen added that if Congress does not reauthorize CHIP funding or doesn't fund it retroactively, the lost funding would "cause a hole in the OHA budget" that would have to be reconciled in 2018.

The CHIP program pays 97 percent of the total costs of health care for the 121,000 Oregon kids covered under the program.

Those children can be covered by Medicaid, but will be covered at a reduced match rate of 64 percent, which would cost the state more money, according to Allen's memo.

If CHIP expires, federal funds can still pay for emergency services for pregnant women, such as labor and delivery, according to Oregon's interim Medicaid director, David Simnitt. But the state would have to pay for other services for pregnant women covered by the program, such as prenatal check-ups.

The 121,000 kids covered by CHIP in Oregon live in homes where incomes are between 100 and 300 percent of the federal poverty level. Oregon must cover about a third of those kids — those earning between 100 and 138 percent of the poverty level — under the Affordable Care Act, according to OHA.

CHIP covers children whose parents make too much to qualify for Medicaid but still may struggle to afford coverage. Kids in households making less than 100 percent of the federal poverty level are eligible for Medicaid.

Brown's directive comes as OHA struggles to get its books in order, shore up its eligibility and payment systems and bounce back from a pummeling of negative publicity.

The state overpaid Medicaid providers by up to $74 million between 2014 and 2016, about $10 million of which it has already recouped. Allen, who took the reins Sept. 1 in the wake of a publicity scandal, identified a host of other issues with payment and allocation of funds — to the tune of about $112.4 million.