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The Children’s Health Insurance Program Is In Peril Again. But There’s Good News

On its way out the door for the holiday break in December, Congress passed a bill that was supposed to keep the Children’s Health Insurance Program afloat until the end of March. Now, the federal government is saying it can’t even guarantee continued coverage for 9 million low-income kids for the full month of January.

Before Congress passed legislation last month to inject close to $3 billion into CHIP, several states were on the verge of shutting down the program for lack of funds. A few even began notifying parents that their kids were about to lose health insurance.

That could all be about to happen again.

The Centers for Medicare and Medicaid Services, which runs CHIP, can only promise that all states will have enough money for children’s health care through Jan. 19 and maybe until the end of the month ― as Kaiser Health News first reported. CHIP is jointly managed by the federal government and the states, and each state has its own version of the program.

“We appreciate that Congress included funding for CHIP in the continuing resolution that runs through January 19, 2018. The funding included in the CR should carry all the states through January 19th based upon best estimates of state expenditures to date,” Centers for Medicare and Medicaid Services spokesman Johnathan Monroe told HuffPost.

But the Congressional Budget Office has some good news that just might push Congress to put more money in the program: On paper at least, the price tag of renewing CHIP for five years is a lot lower than it was a few months ago.

Instead of the $8.2 billion net cost to reauthorize CHIP the CBO originally expected, the agency now says it would cost just $800 million, according to a letter that CBO Director Keith Hall sent to Senate Finance Committee Chairman Orrin Hatch (R-Utah) this past Friday.

That’s a big drop in price, and it’s the result of another action Congress took last month: repealing the fines on people who don’t comply with the Affordable Care Act’s individual mandate that most U.S. residents have health coverage.

The CBO expects that policy change, which takes effect next year, will cause health insurance premiums to rise for policies purchased via exchanges like HealthCare.gov. To compensate for those higher premiums, the agency predicts the value of the Affordable Care Act’s tax credits for low- and moderate-income families will also rise.

Some parents of kids currently enrolled in CHIP would enroll their families in those exchange policies if CHIP went away, the agency predicts. Coverage for the kids would cost taxpayers more than CHIP coverage. More of their parents would also gain health insurance and receive federal tax credits, further increasing government spending.

In other words, the costs to the taxpayers of not reauthorizing CHIP have risen so much that the net cost of reauthorizing it has dropped dramatically.

The finances of reauthorizing CHIP have been the obstacle to passing a bill that would put the program on sure footing for the next five years, so the CBO analysis removes the biggest excuse that lawmakers had for not moving that legislation.

CHIP’s funding actually expired 100 days ago, on Sept. 30, 2017, at the end of the previous fiscal year. The Centers for Medicare and Medicaid Services, with assists from Congress, has been shuffling money around to keep state programs in operation since then.

In the meantime, the House passed a CHIP reauthorization bill in November over objections from Democrats that the bill paid for CHIP by taking money away from Affordable Care Act programs.

The Senate Finance Committee advanced a CHIP bill in October, but never devised any means of paying for it. That measure hasn’t progressed to the Senate floor. The narrow Republican majority in the upper chamber would need Democratic support to block any attempts to filibuster it.

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