Congress Facing Deadline to Renew CHIP

Congress is approaching a healthcare deadline with enormous stakes for millions of people — and this time it isn’t about ObamaCare.

Federal funding for 9 million low- and middle-income children is set to expire at the end of September, setting up a crucial deadline for a Congress already grappling with other high-stakes battle.

The looming deadline for the Children’s Health Insurance Program has been overshadowed by the GOP effort to repeal ObamaCare, and lawmakers left town for the summer without addressing the issue.

The stakes are high, and the uncertainty has states worried. The longer Congress waits to renew the program, the more likely it will be that they have to impose enrollment slowdowns or even cancel policies.

“For a state, they’re really trying to almost read the tea leaves of will Congress, won’t Congress, extend CHIP funding on time — and using that to dictate some very difficult and practical decisions they have to make, which is just really tough,” said Kelly Whitener, associate professor of the practice at Georgetown University’s Center for Children and Families.

Senior aides on both sides of the aisle express confidence that the reauthorization of CHIP will remain a bipartisan affair, as it has been in years past, despite the tensions generated by the ObamaCare debate.

“There is a bipartisan commitment to getting CHIP and extenders done. There’s a lot of agreement on policy,” a senior Republican aide said. “No one wants to see unnecessary disruption or angst for beneficiaries and burden and hassle for plans and states.”

“I think we can move pretty fast once we get” an agreement, Rep. Gene Green (Texas), the top Democrat on the House Energy and Commerce Subcommittee on Health, told The Hill.

Lawmakers still have to hammer out several key issues: the duration of the reauthorization, whether any other measures will be attached and whether to continue enhanced federal matching funds that were first included in the Affordable Care Act.

That could prove challenging, given that lawmakers are facing a short legislative calendar where two other major issues also have to be resolved by Sept. 30 — raising the debt ceiling and funding the government.

A two-year CHIP reauthorization passed in April 2015, months before the program was set to expire, and the provision was included in a larger Medicare reform package.

But lawmakers are bumping up much closer to the deadline this year.

If Congress misses the deadline, states wouldn’t run out of money for their programs right away. Thirty-one states and Washington, D.C., would exhaust their funds by March 2018, but three states and D.C. could use up all of their federal CHIP money by December, according to the Medicaid and CHIP Payment and Access Commission.

States have already planned their budgets for the next fiscal year, and most have assumed they will receive full CHIP funding, including the 23 percent bump in matching federal funding.

“Usually CHIP doesn’t come down to the wire like this,” said Jesse Cross-Call, a senior policy analyst at the Center on Budget and Policy Priorities.

“If something happens” and the funding doesn’t come through as planned, “it would totally throw state budgets askew,” because they don’t have contingency funding available, he said.

Of the 39 states that responded to a National Academy for State Health Policy (NASHP) survey, 36 states assumed the 23 percent bump would be included. Only one state said it had contingency funds available, just in case.

A senior Republican aide said there’s no decision on whether the 23 percent increase will be included, but members are cognizant of the fact state budgets have already been finalized.

“We have to think practically, not just about what our policy preferences are, but what’s the tradeoff for policy preferences” given that changing the financing for CHIP could be a “significant disruption” for states with biennial budgets, the aide said.

States have been grappling with whether they should notify families about the program’s uncertain future. Many states have laws or regulations requiring them to send out notifications when public programs have changes. That means states where funding could run out in the winter would have to alert people soon, according to NASHP.

“States are trying to be careful about announcing their plans, because they don’t want to freak out people on the program,” said Lisa Shapiro, vice president for health policy at the children’s health advocacy group First Focus.

One industry lobbyist said states have already begun to plan for the worst. August is usually a prime month to renew children’s coverage or enroll new kids in a state CHIP program, but the lobbyist said some states are downplaying enrollment outreach just in case they run out of money.

Lobbyists said they believe Senate and House committee staff are in favor of extending the program for up to five years. A final decision on the length of reauthorization is expected to come once lawmakers return to D.C.

The last two-year extension “was an aberration,” Shapiro said. “States are putting pressure on their delegation, that if they’re serious about their commitment to CHIP, to give it a longer extension.”

Once lawmakers return, experts and advocates think Congress can act quickly.

A Senate Finance Committee hearing on CHIP is expected to occur the first week of September, and the House Energy and Commerce Committee held one earlier this summer. Lobbyists said lawmakers will likely be eager for an easy, bipartisan healthcare win after the bruising ObamaCare battle.

“It’s not a question from a lobbying standpoint of overcoming opposition, it’s a question of when do the dynamics of the legislative process come together to re-fund the program,” said Mark Del Monte, senior vice president of advocacy and external affairs for the American Academy of Pediatrics.

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