Virginia Expected To Lose $40M in Unspent Federal Matching Funds for State’s CHIP Program

Virginia will likely lose $40 million in unspent federal matching funds for the Family Access to Medical Insurance Security program -- the state's CHIP program -- according an estimate from federal Medicaid officials that was released by the state Joint Legislative Audit and Review Commission. The Richmond Times-Dispatch reports that the federal government will likely announce plans this week to "redistribute" unspent funds from Virginia and other areas to states that have exceeded their CHIP budgets and "have been more aggressive" in using federal funds. Last year, Virginia had to return $16 million in unspent federal funds allocated in 1998; the state ranks 40th lowest in terms of "expenditures of the available funds" for CHIP (Martz, Richmond Times-Dispatch, 12/11). The $40 million Virginia is expected to have to return would come from federal funds allotted to the state in 1999. Since 1998, the state has received a total of $285 million in federal matching funds for FAMIS but thus far has spent only $52.5 million. Because Virginia has "lagged behind other states" in enrolling eligible children in FAMIS, the state has not been able to spend its entire federal allotment, the Norfolk Virginian-Pilot reports (Nuckols, Norfolk Virginian-Pilot, 12/11). Virginia has enrolled about 35,000 children in FAMIS, a "little more than half" of the "original estimate" of 63,000 children (Richmond Times-Dispatch, 12/11). A state study conducted this year says that there are more than 130,000 uninsured children in the state (Norfolk Virginian-Pilot, 12/11).

New Rules, New Challenges
The estimate of unspent funds was released the same day as a study by the Joint Legislative Audit and Review Commission that "challenge[s] the effectiveness of" FAMIS, the Times-Dispatch reports. According to the JLARC study, more than 4,000 children have dropped out of FAMIS since new program rules took effect in August (Richmond Times-Dispatch, 12/11). The new rules, in part, require parents of children in FAMIS to pay monthly premiums and copayments based on income level (Norfolk Virginian-Pilot, 12/11). About 2,400 children are expected to lose FAMIS coverage at the end of 2001 because their parents have not paid the monthly $15 per child premium, the study says. In response to the study and CHIP funding loss estimate, state Medicaid officials said that they would "step up efforts" to boost FAMIS enrollment and determine "why others have dropped out of the program" (Richmond Times-Dispatch, 12/11).