CBO: Needed CHIP funding drastically reduced due to individual mandate repeal
- The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) announced last Friday that funding legislation that extends the Children’s Health Insurance Program for five years now would cost less than $1 billion over 10 years due to the elimination of the Affordable Care Act’s (ACA) individual mandate penalties.
- CBO Director Keith Hall wrote to Senate Finance Committee Chair Orrin Hatch (R-Utah) that his bill, S. 1827, the Keep Kids’ Insurance Dependable and Secure Act of 2017, would increase the deficit by $0.8 billion over 2018-2027 rather than a previous $8.2 billion estimate.
- Funding for CHIP expired in September, but the year-end continuing resolution provided a short-term spending bandage. Lawmakers have been pushing for a five-year reauthorization, but have not come to a deal yet due to disagreements on how to pay for the program.
Hall noted that CBO and JCT expect that marketplace premiums will cost more in light of the individual mandate penalties being removed.
“As a result, the federal cost of enrolling a child in coverage through the marketplaces will be higher. Thus, funding CHIP for five additional years—causing some children to be covered in that program rather than through the marketplaces—would result in a larger reduction in spending related to the marketplaces than in the prior estimate,” Hall wrote.
Prior the year-end CR, which provided $2.85 billion from Oct. 1, 2017, to March 31, 2018, several states warned that they were on the verge of running out of money to maintain their CHIP programs. But states may still be in danger of running out of funds even with the additional CR money; CMS told Kaiser Health News that some states will run out of funding Jan. 19.
CHIP covers about 8.4 million children and provides maternity coverage for about 370,000 women.
The lower cost estimate may be good news because lower amount of offsets will be needed to be found by lawmakers. CHIP has been hailed as a success over the years due to reducing hospitalizations and child mortality and has typically been a bipartisan program.
- Congressional Budget Office Re: Updated Cost Estimate for S. 1827, the Keep Kids’ Insurance Dependable and Secure Act of 2017
- Healthcare Dive Congress misses deadline to reauthorize CHIP
- Healthcare Dive States struggling to maintain CHIP without federal dollars
- Congress.gov S.1827 - KIDS Act of 2017
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