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Children’s health program renewed as U.S. federal government reopens

by ,  /  25 January 2018
Steve Debenport / iStock

A brief, partial shutdown of the U.S. federal government ended 22 January, as the Senate and House approved legislation that would keep federal dollars flowing until 8 February, as well as fund the Children’s Health Insurance Program (CHIP) for the next six years.

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President Donald Trump signed the bill that evening.

The CHIP program, which provides coverage to children in families who earn too much to qualify for Medicaid but not enough to afford private insurance, has been bipartisan since its inception in 1997. But its renewal became a partisan bargaining chip over the past several months.

Funding for CHIP technically expired 1 October, although a temporary spending bill in December gave the program $2.85 billion. That was supposed to carry states through March to maintain coverage for an estimated 9 million children, but some states began to run short almost as soon as that bill passed.

The Georgetown University Center for Children and Families estimated that 24 states could face CHIP funding shortfalls by the end of January, putting an estimated 1.7 million children’s coverage at risk in 21 of those states.

Meanwhile, both houses of Congress had been at loggerheads over how to put the program on firmer financial footing.

In October, just days after the program’s funding expired, the Senate Finance Committee approved a bipartisan five-year extension of funding by voice vote. But that bill did not include a way to pay the cost, then estimated at $8.2 billion.

In November, the House passed its own five-year funding bill for the program, but it was largely opposed by Democrats because it would have offset the CHIP funding by making cuts to Medicare and the Affordable Care Act (ACA).

‘Kids against kids:’

Prospects for a CHIP deal brightened earlier this month when the Congressional Budget Office (CBO) re-estimated how much the extension of funding for the program would cost. In a letter to Senate Finance Committee Chairman Orrin Hatch (R-Utah) on 5 January, the CBO said changes to healthcare made in the tax bill would result in lowering the five-year cost of the program from $8.2 billion to $800 million — effectively a reduction of 90 percent.

The reason, the CBO explained, is that the landmark tax bill passed in December eliminated the ACA’s individual mandate, which would likely drive up premiums in the individual market. Those higher premiums, in turn, would increase the federal premium subsidies for those with qualifying incomes. As a result, if children were to lose their CHIP coverage and go onto the individual exchanges instead, the federal premium subsidies would cost more than their CHIP coverage.

Driving that point home, on 11 January, CBO Director Keith Hall wrote to Representative Frank Pallone (D-New Jersey) that renewing CHIP funding for 10 years rather than 5 would save the federal government money. “The agencies estimate that enacting such legislation would decrease the deficit by $6.0 billion over the 2018-2027 period,” the letter said.

That made it easier for Republicans to include the CHIP funding in the latest spending bill. But it infuriated Democrats, who had vowed not to vote for another short-term spending bill until Congress dealt with the issue of immigrant children brought to the country illegally by their parents.

Republicans, said Senate Minority Leader Chuck Schumer (D-New York) on 21 January, “were using the 10 million kids on CHIP, holding them as hostage for the 800,000 kids who were Dreamers. Kids against kids. Innocent kids against innocent kids. That’s no way to operate in this country.”

Republicans, however, said it was the opposite — that Democrats were holding CHIP hostage by not voting for the spending bill. “There is no reason for my colleagues to pit their righteous crusade on immigration against their righteous crusade for CHIP,” said Hatch. “This is simply a matter of priorities.”

The CHIP renewal was not the only health-related change in the temporary spending bill. The measure also delays the collection of several unpopular taxes that raise revenues to pay for the ACA’s benefits. The taxes being delayed include ones on medical device makers, health insurers and high-benefit ‘Cadillac’ health plans.

The bill does not, however, extend funding for Community Health Centers, another bipartisan program whose funding is running out. That will have to wait for another bill.

This story originally appeared on Kaiser Health News. It has been slightly modified to reflect Spectrum’s style.


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