Positive Development for CHIP Emerges from Senate Finance Committee Leaders

Cute woman pediatrician examining of baby kid with stethoscope

Yesterday I blogged about the urgent need for Congress to take bipartisan action to extend CHIP funding before it expires on September 30. The Senate only has 10 legislative days left before the deadline, and the House only has five! Yikes!

Almost nine million children have their coverage provided for or funded at least in part by CHIP. About 25 percent of those children have special health care needs.

While under no delusion of causality with the timing of the publication of my blog, I was very happy to see an announcement last night from Senator Hatch and Senator Wyden about a bipartisan CHIP agreement emerging from the Senate Finance Committee. There is no legislative language yet, but here is what we know so far about the agreement:

  • CHIP would be extended for five years. This is MACPAC’s recommendation and we agree that an extension of this length is needed to ensure stability and to allow states to work towards improving their programs.
  • CHIP’s enhanced matching rate would be fully funded for FY 2018 and FY 2019 as authorized under current law. Then in FY 2020 the 23% enhancement (aka “the bump”) would be reduced by half (i.e. a 11.5% reduction in the matching rate) and in FY 2021 states would receive their regular CHIP match rate. This seems like a reasonable compromise to me and most importantly it would allow states to prepare for the reduction. As regular readers of SayAhhh! know, the vast majority of states have established budgets relying on the federal government to keep the promise of current law in place.
  • CHIP’s maintenance of effort, which ensures stability in children’s coverage, is referenced and rumor has it that current law would be preserved (which continues the MOE through FY 18 and FY 19) and then would be amended to allow flexibility for states over 300% of the poverty line to restrict eligibility if they choose to do so. In practice, nearly all children enrolled in CHIP have family incomes below 300% of the poverty line.

A critical question of course will be offsets to pay for the bill. CHIP is very inexpensive relative to the overall federal budget. To fully fund CHIP, it would cost somewhere in the range of $5 billion to $10 billion. It would not be acceptable to pay for CHIP with cuts to services in other areas.

Being the detail-oriented folks that we are here at Georgetown University CCF, we will wait for the legislative language before fully assessing the deal. But I am really encouraged by this bipartisan progress which could break the logjam here in Washington and extend CHIP quickly. This would be a victory for the peace-of-mind and economic security of families around the country who rely on CHIP for their children’s health coverage.

Joan Alker
Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy

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