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Ivey praises $1.5 trillion tax bill but won’t speak out on CHIP funding

Chip Brownlee

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By Chip Brownlee
Alabama Political Reporter

Alabama Gov. Kay Ivey on Wednesday praised the passage of the Republican-sponsored $1.5 trillion tax bill but has largely avoided speaking publicly on Congress’ failure to fund the Children’s Health Insurance Program, an initiative that provides health coverage to more than 150,000 children in the state.

In a statement issued Wednesday, Ivey said she was “thankful” that Congress passed the Republican tax reform package.

“I look forward to President Trump signing it into law,” Ivey said. “Simplifying the tax code while cutting taxes will bring much needed relief to Alabama families, will help our businesses grow and will prove to be a boon for our economy.”

While the tax package is set to reduce the corporate tax rate and deliver a sizable tax cut for the majority of Americans, Congress missed a September deadline to renew CHIP and has for months allowed funding to lapse while states blew through what remaining reserves they had.

If Congress doesn’t approve appropriations for the program before Christmas, Alabama will begin sending out notices on Dec. 26 to the families of 84,000 ALL Kids enrollees who will lose their insurance as soon as Feb. 1. The remaining children enrolled in Medicaid will keep their coverage because of federal eligibility requirements — but at a greater cost to the state.

Alabama became the first state to publicly announce contingency plans for how it expects to shut down its CHIP program if no funding is approved. More than 1.9 million children in 20 states will lose their health insurance starting in January if Congress doesn’t take action, and as many as 7,000 children in Alabama could be the first to lose their coverage next month because the state will stop renewals beginning Jan. 1.

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“It makes me feel awful. I am hugely stressed,” said Alabama CHIP director Cathy Caldwell. “That is absolutely my main focus, the realization of how devastating this will be to families, to get a letter a few days after Christmas, telling them that their children’s health insurance will end Feb. 1. It’s awful.”

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The Alabama Department of Public Health and ALL Kids officials have been upfront and vocal about the state of the program — calling it “devastating” for families and urging Congress to renew funding — but Ivey hasn’t spoken out about the program. Her press office has directed the media to the Department of Public Health, instead, while choosing to remain mostly quiet herself.

Earlier this month, Ivey joined other Republican governors in urging Congress to act on tax reform, sending a letter to House Speaker Paul Ryan and Senate Majority Leader Mitch McConnell. No such letter has been sent to party leaders about CHIP funding.

CHIP, which provides comprehensive health insurance to those enrolled, has been one of the most effective health care programs in the state and has largely avoided any major problems that have plagued other state-run programs. Alabama became the first state in the Union to implement the program in 1998 under President Bill Clinton.

Since implementing the program, Alabama’s child uninsured rate fell from 20 percent to 2.4 percent, a drop that far exceeded the national average. Alabama’s eligibility standards have also far exceeded other states’, allowing more low- and moderate-income uninsured children to enroll in the program.

“That record has earned Alabama’s program national recognition as the ‘Star of the South,'” said Jim Carnes, Alabama Arise Citizens’ Policy Project director.

Since the Affordable Care Act, both components of CHIP in Alabama — Medicaid coverage for 75,000 children and ALL Kids coverage for 84,000 children — have been fully funded by federal appropriations. But if funding isn’t renewed for CHIP, Alabama will face a budget crunch when it is forced to continue providing coverage for the children enrolled in Medicaid at a lower federal match rate.

Without CHIP funding, Alabama will have to cover 20 percent of the bill for the children enrolled in Medicaid.

“Ending ALL Kids also places a strain on Alabama’s threadbare General Fund. CHIP funds now pay for the health care of around 75,000 children enrolled in Medicaid, who will continue to receive coverage but at new cost to the state,” Carnes said in a statement.

State Rep. Steve Clouse, chair of the House Ways and Means Committee, has said the costs could exceed $45 million a year.

“If we’re going to have to pay that amount, then we have some real issues all across the board,” Clouse said.

 

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