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Spending Deal Offers Short-Term CHIP Relief

The bill signed by President Trump helps states keep the Children's Health Insurance Program afloat, but it doesn't offer any reassurance that kids won't lose their health care in 2018.

Children at a news conference on Capitol Hill regarding health care reform.
(AP/Gerald Herbert)
The future of the Children’s Health Insurance Program (CHIP) is still uncertain, but Congress has provided some short-term relief to the states.

The spending bill signed by President Trump on Friday, which averts a shutdown and will keep the federal government running until Dec. 22, allows the U.S. Secretary of Health and Human Services (HHS) to reallocate any unused federal funds to the states most at risk of running out of CHIP money by the end of the month.

This is the latest cash infusion the feds are giving states since Congress let the program, which has a history of bipartisan support, expire in October. Five states -- Arizona, California, Minnesota, Washington and Oregon -- received redistribution money in October to keep their CHIP programs funded, and Nevada got another $5.7 million earlier this month

But at least one state -- Minnesota -- had already exhausted those redistribution funds and resorted in the last few weeks to using its own money to make up for the loss of federal funding. Oregon was also anticipating having to tap its bank this month to keep the program running.

The Children's Health Insurance Program covers 9 million children and pregnant women in families considered to be “working poor,” meaning they make too much money to qualify for Medicaid but can't afford insurance through the marketplace or their employer. It’s jointly funded by the federal government and states, but the feds foot about 80 percent of the bill.

Matt Salo, director of the National Association of Medicaid Directors, says the spending deal is a significant relief because when states exhaust redistribution money, there’s a complicated process before they can receive more federal funds. The spending deal throws that out of the window, promising states money no matter what if their program is in danger.

But, Salo cautions, "it’s not as good as actually fixing the problem. States still have their own way of doing things, they need to start telling people if money is going to run out in a few months."

Sources close to the matter told the Washington Examiner that Congress is unlikely to reauthorize the program this year.

Some states -- including Colorado and Connecticut -- have already started the process of notifying parents that their children's health insurance could end early next year if a long-term deal isn't reached.

A bill to reauthorize the program passed the U.S. House along party lines in November, but Democrats in the U.S. Senate say they won’t vote for it as is.

"If this bill is partisan, it will never become law. It will go to the Senate and sit there," U.S. Democratic Rep. Frank Pallone Jr. told CQ Roll Call.

At issue are provisions that would charge higher premiums to Medicare beneficiaries who earn more than $500,000, shorten the grace period that people have to pay premiums on marketplace plans before they are kicked off and allow states to kick lottery winners off Medicaid. 

On Friday, 99 House Democrats signed a letter urging Congressional leadership to reject the CHIP extension the House passed in November and work on a bipartisan solution instead.

According to the Medicaid and CHIP Payment and Access Commission, 28 states are expected to run out of CHIP money by March. Only two states -- Illinois and Wyoming -- are expected to have enough money to last through the summer.

Mattie covers all things health for Governing.

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