The Senate Finance Committee has arrived at a deal to extend the funding for the Children's Health Insurance Program by five years.
The New York Times reports that Senator Orrin G. Hatch, R-UT, chairman of the committee, and ranking member Ron Wyden, D-OR, announced the deal to keep the program from running out of federal funds. The current funding would be exhausted by the end of September, leaving nearly nine million children without health insurance. The program is designed to help families that can't afford other coverage but make too much to qualify for Medicaid.
Although some members of Congress theorized when the Affordable Care Act was passed that CHIP would no longer be needed, that has not proven to be the case; studies show that CHIP provides better, cheaper and more comprehensive benefits for children than the plans sold on ACA exchanges.
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Politico reports that the proposed legislation would retain the 23 percent increase in the federal matching rate provided by the ACA to states for 2018 and 2019, with aides in both parties saying that that increase would start to fall in 2020. At that time, they said, it would fall to 11.5 and starting in 2021 would be totally eliminated.
The report says that Republicans have been critical of the increase in the federal matching rate. However, since action on CHIP was not taken until so late in the year, GOP aides said that lawmakers didn't believe Congress could reduce the federal share for at least a year. Most state legislatures have adjourned for 2017 and already set their budgets for at least the next year.
The full text of the proposed legislation has not yet been released. And The Hill reports that it's not known whether the legislation will pass as a standalone bill, or whether any additional provisions, such as a bipartisan ACA stabilization bill, will be attached. There's not much time for Congress to pass it, with both houses needing to take action and send it along to the White House before CHIP's expiration on September 30.
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Marlene Satter
Marlene Y. Satter has worked in and written about the financial industry for decades.
