One of the things Congress failed to complete in its largely disastrous run-up to the end of fiscal year 2017 was a no-brainer: reauthorization of the very popular Children’s Health Insurance Program, better known simply as CHIP.
CHIP, created in 1997, was one of the incremental health-reform initiatives taken during the Clinton administration after the defeat of Hillarycare. It’s a federal-state program that covers about 9 million children and pregnant women who do not otherwise qualify for Medicaid (typically because their incomes are a bit higher than Medicaid allows). The share of the cost covered by the federal government is somewhat somewhat higher than for Medicaid, and that share was increased by the Affordable Care Act. Many states — covering a majority of children nationally — offer CHIP recipients comprehensive benefits that are identical to Medicaid, though some have skimpier coverage and a few require the payment of premiums.
Unlike Medicaid, CHIP is subject to annual appropriations and regular reauthorizations: It is a grant to states, not an individual entitlement. The current reauthorization ran out on September 30, after desultory efforts in the Senate to extend the program for two years were sidetracked by the last-minute effort to enact the Graham-Cassidy legislation. The lack of urgency was rationalized by the fact that all states have a positive balance of CHIP money, and most could operate the program past the beginning of 2018.
But the delay in reauthorizing CHIP will have real consequences if it lasts much longer. As Talking Points Memo explained, “at least ten states are on track to run out of [CHIP] money by the end of the year.” Utah, home state of the chairman of the Senate committee that oversees CHIP, Orrin Hatch, is already making plans to shut the program down. Five other states —Arizona, Minnesota, Nevada, Texas, and West Virginia — will soon be forced by their own laws to begin winding down the program or freeze enrollment if the feds don’t act. Twenty-one additional states (plus D.C.) are expected to run out of CHIP money in the first quarter of 2018. And virtually all states budgeted for CHIP dollars that are now in limbo.
Unfortunately, the CHIP reauthorization process is getting more, not less, complicated. Hatch and the Finance Committee’s ranking Democrat, Ron Wyden, earlier reached agreement on a bill that would extend CHIP for five years while ending the higher match rate created by ACA after two years. But in the House, CHIP reauthorization is getting entangled with legislation to give hurricane-stricken Puerto Rico a billion dollars in additional Medicaid dollars, and worse yet, with highly controversial proposals to offset the cost, including sharply higher premiums for wealthier Medicare recipients, and a shortened “grace period” for people who miss paying their monthly Obamacare premiums on time.
The longer this all drags on, the more some states will begin curtailing CHIP services, and the more likely it will become that the reauthorization bill will be taken hostage by interest groups looking for must-pass legislation to pull their own pet legislation through Congress. This is a growing crisis largely manufactured by a do-nothing Republican Congress. They can and should still get this right.