Approval of funding for the Children’s Health Insurance Program (CHIP) moved a step closer late last week, but there’s still a significant roadblock in the way — the Senate.
The House voted 242-174 in support of reauthorizing the program that provides coverage for 8.9 million children and 370,000 pregnant women. The vote was mostly along party lines with Republicans overwhelming supporting the legislation and Democrats against it.
Democrats, who have been calling for CHIP reauthorization since Congress missed the Sept. 30 deadline to reauthorize the program, voted against the bill because it includes higher Medicare premiums for people who earn more than $500,000, takes away money from the Affordable Care Act's (ACA) prevention and public health fund and cuts ACA exchange plan members' grace period for paying their premiums from 90 days to 30 days.
Though the bill would fund CHIP, which is what Democrats want, they don’t support legislation that would take money from an ACA fund. Democrats view this as an attack on the ACA, which most Republicans on Capitol Hill want to repeal. They also don’t like the higher premiums for wealthy Medicare recipients.
The Senate has its own legislation, which is similar to the House plan. The Senate Finance Committee approved the bill, but there’s concern that it won’t pass that body. The Republicans only hold a two-member majority in the Senate, so the plan can’t lose more than two Republican senators if no Democrats vote for the measure. This is the same dilemma Republicans faced on repealing and replacing the ACA this year. Republican leaders were never able to rally enough support in the Senate despite multiple repeal efforts.
In the meantime, states continue to offer CHIP temporarily without new federal funding. They are using leftover CHIP federal money now, but those dollars will dry up soon. The Medicaid and CHIP Payment and Access Commission predicted three states and the District of Columbia will run out of federal money by the end of the year and 27 states won’t have money to pay for CHIP in the first quarter of next year. The Center for Children and Families at Georgetown and the Kaiser Family Foundation gave an even worse forecast. They 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.
Regardless of which estimate is most accurate, many states could soon be faced with deciding whether to continue the CHIP program on their own dime, at least temporarily, or pull back coverage for children and pregnant women. If states decide to go with the later, hospitals and providers may feel the brunt of fewer insured children. This could lead to more bad debt and charity care for hospitals, especially children’s hospitals, which are facing financial struggles already.
At the closing of the U.S. News & World Report Healthcare of Tomorrow conference Friday, Virginia Gov. Terry McAuliffe said the lack of CHIP funding was making parents in his state "scared to death" their children will lose coverage. "I have a healthcare crisis in my state today," he said.
In the days leading up to the House vote, the Children’s Hospitals Association, which represents 220 children’s hospitals, called for immediate approval of CHIP legislation.
“Concerning reports indicate that states are taking steps to limit programs in order to address the looming funding shortfall, despite receiving federal redistribution funds. We urge Congress to act now by enacting a strong, bipartisan five-year extension of CHIP and avoid potentially disastrous consequences that could be caused by further delay,” the association said.