CHIP reauthorization moves forward, but slowly
Congress has moved a step closer to reauthorizing the Children’s Health Insurance Program (CHIP), but hurdles still remain. Funding for the program that covers 9 million children expired last weekend.
The Senate Finance Committee approved a bill to reauthorize CHIP for five years and provide more than $100 billion for the program Wednesday morning. The House Energy and Commerce Committee backed a similar House bill along party lines 28-23 later in the day.
After the five years, the bills would phase down over two years the 23 percentage point funding increase for CHIP that was in the Affordable Care Act (ACA).
Congress missed a Sept. 30 deadline to reauthorize the federal/state program, which costs about $14 billion annually and covers children of families with low and moderate incomes. The program has wide bipartisan support, but Democrats don’t support legislation proposed by Republicans that would cut other health programs like Medicare or Medicaid or target the ACA to fund CHIP.
States, meanwhile, are hoping the program is reauthorized before they run out of funding and have scale back benefits or find money in other parts of their budget.
The two CHIP-related bills both provide five years of funding, but the House version includes added provisions. These add-ons include modifying Disproportionate Share Hospital payments by stopping the 2018 cut but reducing funding in 2026 and 2027, $1 billion in Medicaid payments to Puerto Rico, providing states more flexibility in the CHIP risk pool and killing the controversial Independent Payment Advisory Board (IPAB).
The House bill also provides funding sources that would offset the CHIP reauthorization, which would impact Medicaid and Medicare. House Democrats oppose the offsets and question Republicans wanting to fund the CHIP reauthorization when they’re also pushing for tax cuts, but don't have ways to fund them.
During the House Energy and Commerce Committee meeting, Rep. Frank Pallone (D-N.J.) spoke out about the process and legislation. He said Republicans on the committee “continue their ongoing sabotage" of the ACA. Pallone called portions of the House bill a “partisan attack on the ACA and Medicare” that will hurt CHIP and community health centers.
While Congress works on the bills, states are continuing the CHIP programs temporarily without federal funding. That money will dry up soon — though there is disagreement about exactly when.
The Medicaid and CHIP Payment and Access Commission predicted three states and the District of Columbia will run out by the end of the year, and 27 states won’t have money to pay for CHIP in the first quarter of next year. However, the Center for Children and Families at Georgetown and the Kaiser Family Foundation said 11 states will run out by the end of the year and another 21 and the District of Columbia in the first quarter of next year.
If Congress doesn’t pass CHIP legislation before that happens, states will need to decide whether to pull back on coverage or continue offering the same level of CHIP coverage and pay for all of it themselves. If this happens, hospitals and providers could feel the brunt of fewer insured children and more bad debt.