CHIP Funding: Deal Close To Keep Health Care For 9 Million Kids

WASHINGTON, DC – Congress is close to a deal renewing the Children's Health Insurance Program for at least another six years. Under pressure from the states and buoyed by an assessment from the Congressional Budget Office that renewing for at least six years actually saves the government money, Congressional officials say that while things may still fall apart, the only real question seems to be for how long the program will be renewed.

"I am optimistic that that will go forward next week in the US House," says Republican Rep. Greg Walden of Oregon, chairman of the House Energy and Commerce Committee, which oversees CHIP. "We've had productive discussions with the Senate."

Since it was enacted in the ’90s, the program has dramatically reduced the uninsured rate of children from 14.9 percent to 4.8 percent, the National Governor’s Association, which has members of both parties, previously said.

According to Joan Alker, the executive director of the research group Center for Children and Families at Georgetown university, 25 percent of kids who receive health insurance through CHIP have special needs.

Each state runs a version of the program with significant financial help from the federal government

The program currently funds health care for approximately 9 million children whose families earn too much money to qualify for Medicaid but not enough to buy insurance. Congress allowed funding for the program ran out on Sept. 30.

Since then states have mostly been using a combination of funds from the program that they had in reserve and state funds. On Dec. 21, Congress passed a $2.85 billion stopgap intended to fund CHIP programs through March 31 but last week the Centers for Medicare and Medicaid said that some will start running out of money after next Friday.

That's the day the federal government will run out of cash and could shut down if Congress doesn't reach an agreement on a new budget or continuing resolution.

"It will be the longest single extension for CHIP in its history, at a funding level that would be the biggest the program has ever had," Walden says.

Walden and his home state colleague, Democratic Sen. Ron Wyden of Oregon, are both confident that Congress will pass a long-term fix this week.

Wyden, who is the ranking member of the Senate Finance Committee, which oversees CHIP on the Senate side, released a letter from the nonpartisan Congressional Budget Office, which found that extending the program by ten years would actually save the government $6 billion.

The reason? If CHIP is not extended, more children will end up in the marketplaces set up by Obamacare, which means the government would have to help pay for their healthcare.

"Extending funding for CHIP for 10 years yields net savings to the federal government because the federal costs of the alternatives to providing coverage through CHIP (primarily Medicaid, subsidized coverage in the marketplaces, and employment-based insurance) are larger than the costs of providing coverage through CHIP during that period," according to the CBO.

Wyden has been working hard with Senate Finance Committee Chairman Orrin Hatch, a Republican from Utah, on hammering out the extension. He's pushed for the decade-long option with the $6 billion in savings. That option is favored by the Democrats and many Republicans.

Senate Majority Whip John Cornyn, a Republican from Texas, is also pushing for ten years.

Hatch says that he wants as long an extension as possible.

Walden had told colleagues on his committee that was the path to take at one point.

Officials say that the obstacle is House Republican leadership, which is pushing to hold the extension to six years.

"With this news, securing kids’ health care for the long-term should be a no-brainer," says Wyden.

Whether it is six or ten years, states are watching carefully, desperate that something be done.

Before the extension was passed in December, Alabama said it was going to shut down the program in the state at the end of January – though once the extension was passed it announced it was putting those plans on hold.

Several other states have already sent letters saying that the program could end.

"Money is running out once again," Walden says. "There's too much uncertainty out there. At some point 2 million people will get letters saying their insurance is canceled.

"None of this needed to happen It's no way to run it."

Hatch and Wyden agree.

"Families across the nation deserve better," they said in a joint statement.

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