Dive Brief:
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Congress passed and President Donald Trump signed a continuing resolution Monday, ending a government shutdown and providing funding through Feb. 8.
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The temporary spending bill extends the Children’s Health Insurance Program for six years, but does not include funding for federal community health centers and did not renew Medicare extenders that expired along with CHIP in October.
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The CR also delays the Affordable Care Act medical device tax for two years, the ACA’s so-called Cadillac tax for two years and the health insurance tax for one year. It did not, however, delay Medicaid Disproportionate Share Hospital payment cuts as hospitals had hoped.
Dive Insight:
Nearly four months after it missed the deadline to reauthorize CHIP, Congress finally reauthorized the widely-popular program that covers about 8.4 million children and provides maternity coverage for about 370,000 women.
The extension of CHIP is welcomed by states that were running out of CHIP funding, families, hospitals and providers (especially children’s hospitals), and safety net and rural facilities. The extension comes after a Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) report estimated that extending CHIP would cost far less than previously believed.
Congress also delayed certain ACA taxes, put in place to help offset the cost of covering lower-income Americans. The measure also delayed the Cadillac tax, which taxes employers with expensive health insurance plans.
The 2.3% medical device tax on device manufacturers was delayed by two years. That tax took effect in 2013, but Congress suspended it for 2016 and 2017. The levy was slated to return this year.
Last, Congress delayed the health insurance tax, which is charged on all health insurance plans. The insurance lobby argued the HIT increases the cost of health insurance for both individuals and companies.
The three tax delays mean the ACA’s funding sources will get pushed into the future, and will also cause a larger deficit as that revenue won’t come into the federal government to help offset some of the cost of insuring lower-income Americans.
All eyes will remain on Capitol Hill as Congress works on another spending bill with a Feb. 8 deadline, as well as tackle partisan differences over immigration, which led to the shutdown.
Senate Majority Leader Mitch McConnell (R-Ky.) promised to address immigration as part of the next spending deal.
A new pact may include additional healthcare measures. Cowen Washington Research Group analysts identified a few measures Congress may approve as part of a spending package in February: a two-year bump of at least $1 billion for the National Institutes of Health, a two-year extension of cost-sharing reduction payments to insurance companies in the ACA exchanges, a rural home health pay bump, billions to help combat the opioid epidemic, a delay of hospital Medicaid DSH payment cuts and expanded telehealth reimbursement.