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This Could Be CHIP's Most Important Week Yet

By Jack O'Brien  
   January 15, 2018

The program, which provides health coverage to low-income children, could run out of money on January 19, leaving several states in financial jeopardy.

Temporary funding for the Children’s Health Insurance Program (CHIP) is slated to run out in several states by January 19, putting pressure on Congress to act on a long-term solution for the popular bipartisan program.

Georgetown University’s Health Policy Institute Center for Children and Families released an updated report last week detailing the financial solvency of CHIP programs across the country.

The report concluded that, without an additional spending measure, 11 states would fully exhaust federal funding by the end of February and 1.7 million children would lose their health coverage. By the end of March, the number would rise to 24 states in “shortfall positions,” where they lack available federal funds.

CHIP has not been fully funded since September 30, when Congress failed to reauthorize spending on the program, which supplies health insurance coverage to an estimated 9 million children. This is the first time since its inception in 1997 that the program has dealt with significant funding challenges.  

While a Congressional Budget Office report from October indicated the program would increase the deficit by $8.2 billion over the next decade, a revised estimate from last week said the legislation would lower the deficit by $6 billion.

Long-term solution tied to shutdown deadline

Looming large over the CHIP funding battle is the potential for the first federal government shutdown since 2013.

After passing tax reform in late December, Congress approved a continuing resolution to fund the government through January 19. As part of the resolution, Congress approved a $2.85 billion stop-gap measure for states to fund CHIP programs through the early part of 2018 while awaiting passage of a long-term solution.

In addition to funding CHIP, the potential government shutdown debate hinges on the fate of Deferred Action for Childhood Arrivals (DACA), a program instituted by President Barack Obama to prevent deportation of some who illegally entered the U.S. as minors.

While CHIP is regarded for its high bipartisan support, DACA has been the subject of intense debate on Capitol Hill in recent weeks. A week of discussions between the White House and a bipartisan group of six senators showed promise, before talks broke down and President Donald Trump tweeted “DACA is probably dead” on Sunday.

As the deadline quickly approaches and uncertainty remains about a potential government shutdown, lawmakers and CHIP advocates have pressed Congress to take up the funding question.

Sen. Orrin Hatch, R-Utah, one of the original sponsors of the legislation that created CHIP, said last week during Alex Azar’s confirmation hearing he would work with Democrats and Majority Leader Mitch McConnell to provide the program with long-term funding.

States spared from January 19 deadline

Despite the urgency to pass long-term funding for the states in a financial pinch, some states have CHIP programs which could last through the spring.

Texas has roughly $284 million on hand to fund its CHIP program through the end of March, while Michigan appears to have enough funds to run its program into July. Massachusetts Gov. Charlie Baker said last week the state should have enough federal funding to last through the end of March, according to the Lowell Sun.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.

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