Kansas Budget Priorities Short-Change CHIP Program

Governor Sam Brownback’s decision to divert federal funding away from a health insurance program is drawing sharp criticism from children’s advocates.

Shannon Cotsoradis, president of the nonprofit advocacy organization Kansas Action for Children, said the governor is shortchanging Kansas families who depend on the Children’s Health Insurance Program.

“The dollars we are receiving as a result of the bump in the federal match are dollars that could have been reinvested in Kansas children and their families,” Cotsoradis said. “I think it’s troubling that Kansas kids continue to foot the bill for unsustainable tax cuts in our state.”

Cotsoradis was referencing income tax cuts passed at Brownback’s urging in 2012. Instead of jumpstarting the Kansas economy as Brownback promised, the tax cuts caused a steep drop in state revenue. The revenue shortfalls forced Brownback and legislators to cut spending and raise other taxes to keep the state budget in balance.

However, the increase in sales and tobacco taxes passed by lawmakers to end the 2015 legislative session – the longest in state history – weren’t enough to put this year’s budget in the black. So, Brownback and state Budget Director Shawn Sullivan were forced to come up with another $63 million in spending cuts and fund transfers.

The transfers included $17.6 million in federal funding for the CHIP program.

Sullivan noted that the state learned in late June that it was going to receive a 23% increase in CHIP funding.

“The timing of this was pretty fortunate,” Sullivan said.

The additional funding increased the federal government’s share of Kansas CHIP funding from 70% to 92%.

Elisabeth Wright Burak, senior program director at the Georgetown University Health Policy Institute Center for Children and Families, said some states are using similar increases to expand their CHIP programs or fund outreach efforts to increase enrollment.

Kansas is missing an opportunity to do the same, she said.

“It is federal money that’s on the table to help families,” Wright Burak said. “It’s an opportunity to do more for kids than you have been doing.”

Approximately 54,000 Kansas children are enrolled in CHIP, about 87 percent of those thought to be eligible. The national average for CHIP participation is slightly higher, at 88.3%.

Sullivan acknowledged that the increase could have been used to expand CHIP services or eligibility. But he said he and Brownback determined “there is not a need for us to do that.”

Diverting the federal funds to prevent cuts in other areas won’t negatively affect CHIP, Sullivan said.

“This does not lead to any sort of expenditure reduction or major change in the (CHIP) program,” he said.

Wright Burak said that doesn't account for erosions in the eligibility threshold for the Kansas CHIP program due to an indexing provision included in a 2010 law that expanded the program.

“It’s a missed opportunity to use those freed-up funds and put them back in the system and bring the eligibility level to where it was when they passed (the extension),” she said.

The 2010 Kansas law expanded eligibility for children from 200% of the federal poverty level to 250%. In today’s dollars, 200% of FPL is $48,500 for a family of four, 250% is $60,625.

However, because of the indexing feature children’s eligibility has slipped to 244% of FPL. That means that some children eligible for coverage one year may not be the next as the threshold continues to drop.

The failure to use the increased federal funding to restore CHIP eligibility levels is the latest in a series of budget decisions that have negatively affected Kansas children, Cotsoradis said, noting that Brownback and lawmakers also diverted money from early education programs and other children’s initiatives.

“The bottom line here is we took more than $50 million from kids during this budget cycle,” she said. “That’s a pretty hefty price tag for Kansas kids.”

Sullivan said efforts were made to spare core services and programs to the extent possible.

“We really tried to take the line here of trying to minimize as much as possible the impact this would have on Kansans,” he said.

The KHI News Service is an editorially independent initiative of the Kansas Health Institute.