Navigating a New Landscape for Child Health

Navigating a New Landscape for Child Health

Maximizing Coverage Stability in the Southeast

A New Foundation for Child Health

The Children's Health Insurance Program (CHIP) is a critical safety net. However, its impact is often diminished by "churn," the disruptive cycle where eligible children lose and regain coverage due to minor income fluctuations or administrative hurdles, creating harmful gaps in care.

The federal mandate for 12-month continuous enrollment (CE), effective January 1, 2024, created a new foundation for child health by guaranteeing a full year of coverage. Many states, including North Carolina, had planned to build on this by pursuing multi-year continuous enrollment. However, the policy landscape has shifted dramatically.

The Policy Shift: A New Strategy is Required

In a July 2025 letter, the Centers for Medicare & Medicaid Services (CMS) announced it will **no longer approve new or extend existing Section 1115 waivers for multi-year continuous eligibility.**

This decision closes the primary pathway for states to provide coverage stability beyond 12 months. The focus must now shift to maximizing coverage stability within the existing 12-month framework through **administrative excellence** and perfecting the annual renewal process.

Benefits of This Focused Approach

  • Improved Health Outcomes: Ensure uninterrupted access to preventive care and management of chronic conditions.
  • Enhanced Financial Security: Protect families from the stress and financial devastation of medical debt.
  • Increased Administrative Efficiency: Reduce state costs associated with churn and free up staff capacity.

The Role of CHIP in the Southeast

CHIP provides health coverage for uninsured children in families with incomes too high for traditional Medicaid but too low to afford private insurance. In our region, this vital program is administered by states under different names like PeachCare in Georgia or Coverkids in Tennessee

Defining "Churn": The Cycle of Coverage Disruption

Despite its success, CHIP's effectiveness is undermined by "churn"—the cycle where eligible children lose coverage for short periods only to re-enroll soon after. Click to learn more about its causes and consequences.

CHIP eligibility is based on a family's monthly income. For many parents in the South who work in hourly, seasonal, or service-industry jobs, income is not static. A few extra hours of overtime or a seasonal job can push a family's income just above the CHIP threshold, triggering a loss of coverage even when their annual income remains well within eligibility limits.

Many eligible children lose coverage simply due to administrative complexities. The recent "unwinding" of the COVID-19 continuous coverage provision provides a stark illustration. When states resumed eligibility redeterminations in 2023, millions lost coverage nationwide for "procedural reasons" rather than being found ineligible.

This was a significant issue in the Southeast. For example, in May 2023, CMS expressed concern to South Carolina after the state reported that 49% of renewals resulted in a procedural termination, suggesting that eligible children were losing coverage due to paperwork issues.

The impacts of churn are severe. For children, even a short gap in coverage can disrupt care, leading to missed well-child visits, delayed immunizations, and poor management of chronic conditions like asthma. This can result in poorer health outcomes and increased reliance on expensive emergency department visits. For families, churn creates stress and the risk of incurring unaffordable medical bills. For state governments, churn is fiscally inefficient, generating administrative costs to disenroll and then re-enroll the same children months later.

The Health and Economic Dividend

Improving Outcomes for Southern Children

The most compelling argument for maximizing coverage stability is its direct impact on the health of children in our communities.

Consistent Preventive and Primary Care

Stable coverage is the bedrock of effective preventive care, allowing a child to establish a consistent relationship with a primary care provider for tracking development, timely immunizations, and well-child visits.

Management of Chronic Conditions

For children with conditions like asthma or diabetes, uninterrupted coverage is a medical necessity. Churn can mean a missed specialist appointment or an inability to refill a critical prescription.

Reducing Avoidable Emergency Use

When a child loses coverage, parents may delay care until an illness becomes severe enough to require an emergency department (ED) visit. Studies show a clear link between unstable coverage and increased ED use.

Long-Term Benefits in Education

The benefits extend into the classroom. Healthy children are better learners. Consistent access to care helps identify and address potential barriers to learning early in life.

Strengthening Families and State Budgets

Maximizing coverage stability delivers substantial economic advantages to families, healthcare providers, and state governments across the Southeast.

Alleviating Family Financial Burdens

A national simulation projected households would save $292 million in costs, with families spending an average of $1,222 less on health care annually for each child who gains stable coverage.

Enhancing State Administrative Efficiency

The process of disenrolling and re-enrolling the same individuals is a significant source of administrative waste. A national simulation projected 12-month CE would result in $27 million in annual administrative savings.

Benefits for Providers: Mitigating Uncompensated Care

In 2024, South Carolina hospitals alone provided over $3.2 billion in uncompensated and charity care. Stable coverage policies directly reduce this financial burden on providers.

A New Path Forward: Maximizing the 12-Month Framework

With the primary avenue for extending coverage duration closed, states must pivot to a laser focus on perfecting the annual renewal process. The objective is to eliminate procedural disenrollments and ensure every eligible child successfully transitions into their next 12-month coverage period.

The Shifting Federal Landscape

On July 17, 2025, the Centers for Medicare & Medicaid Services (CMS) announced it will no longer approve new or extend existing Section 1115 demonstration waivers that provide for multi-year continuous eligibility. This decision was based on a recalibrated approach to "reinforce statutory boundaries" and address concerns about fiscal and program integrity.

This guidance halts the momentum of states like North Carolina, South Carolina, Georgia, and Tennessee. With the duration of continuous eligibility fixed at 12 months, the most impactful action states can take is to ensure the renewal process is as seamless, efficient, and successful as possible.

Actionable Recommendations for a New Policy Landscape

States must pivot to building the most efficient and family-friendly 12-month renewal systems. The following are four core recommendations for policymakers in North Carolina, South Carolina, Georgia, and Tennessee.

The primary goal is to ensure no eligible child loses coverage due to procedural barriers. The most effective strategy is to achieve the highest possible rate of automated (ex parte) renewals, where eligibility is confirmed using available data sources before contacting a family.

  • Invest in IT Systems: Modernize eligibility systems to automatically cross-reference data from reliable sources like SNAP, TANF, the IRS, and state wage databases.
  • Adopt All Flexibilities: Make permanent all available simplification strategies and flexibilities from the new federal Eligibility and Enrollment (E&E) final rule, such as using SNAP/TANF eligibility to confirm ongoing Medicaid/CHIP eligibility.

When automated renewal is not possible, the manual process for families must be simple, clear, and accessible.

  • Simplify All Communication: Conduct a comprehensive review of all renewal forms, notices, and websites. Rewrite materials in plain language, user-test them with families, and provide them in all languages common in the state.
  • Allow Multiple Submission Methods: As required by the new federal rule, allow families to return information online, by phone, by mail, or in person.
  • Remove CHIP-Specific Hurdles: Comply with the new federal rule prohibiting CHIP waiting periods and premium lock-out periods. States should also strongly consider eliminating CHIP premiums altogether, as they are a proven barrier to both enrollment and retention.

State agencies must collaborate with community partners to reach families and provide necessary support.

  • Empower Community Assisters: Partner with and increase funding for family physicians, pediatricians, schools, and community-based organizations to conduct proactive outreach and provide direct, trusted assistance with renewal paperwork.
  • Ensure Seamless Transitions: Solidify data-sharing agreements and automated processes between Medicaid, CHIP, and the Health Insurance Marketplace to ensure seamless transitions for children who may no longer be eligible for one program but qualify for another.

While the path through Section 1115 waivers is currently closed, states and advocates should work to create a more permanent federal option for long-term stability.

  • Advocate for a State Plan Option (SPA): The most effective solution is for Congress to create a state plan option (SPA) that would allow states to adopt multi-year continuous eligibility for children without needing to navigate the complex and uncertain waiver process.