Senate Fails To Avert Shutdown, Leaves CHIP Unfunded

The Senate fails to advance the House-sponsored CR to President Trump’s desk, leaving six-year extension of CHIP funding and delay of the “Cadillac tax” on the table.

The federal government shut down after lawmakers failed to reach a deal late Friday evening, defeating the House’s continuing resolution by a 50 to 49 vote.

Senate Majority Leader Mitch McConnell did not rally the necessary support to surpass the 60-vote threshold. This marks the first federal government shutdown since 2013.

“I've said it before, and I'll say it again. There is absolutely nothing in this bill that #Senate Democrats oppose, yet they are shutting down the government,” McConnell tweeted early Saturday morning after the vote.

The House passed a CR on Thursday evening to keep the government operating through February 16. The CR contained three key healthcare provisions, including a six-year funding extension for the Children’s Health Insurance Program (CHIP) and a two-year delay to the implementation of both the medical device tax and “Cadillac tax,” which were introduced through the Affordable Care Act (ACA).

CHIP, which provides health insurance to 9 million low-income children, has not been fully funded since Congress failed to reauthorize its funding by October 1. As part of the CR passed last month, Congress authorized $2.85 billion for CHIP programs across the country though nearly a dozen states are slated to exhaust those funds by the end of February.

A Georgetown University’s Health Policy Institute Center for Children and Families report found 11 states would fully exhaust federal funding by the end of February and 1.7 million children would lose their health coverage.

The failure of the CR also means two ACA provisions will take place as planned: the medical device tax and the “Cadillac tax.” The medical device tax is a 2.3% excise tax on medical device revenues. The tax has a checkered history, first collected from 2014 to 2016, it was halted for a year before collecting again in 2018.

The “Cadillac tax” is an excise tax which applies to high cost employer health benefit plans, a policy which has drawn industry scrutiny, according to a HealthLeaders survey from last year.

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.