A Confused Congress Is Putting Children's Health Insurance at Risk

Just one more sign that the legislators in DC are struggling to get anything at all done.
November 10, 2017, 10:00pm
Republican leaders Paul Ryan and Mitch McConnell. Photo by Mark Wilson/Getty

The Children’s Health Insurance Program (CHIP) is probably one of the most popular and uncontroversial initiatives the federal government operates. It provides low-cost health insurance for some 9 million kids and hundreds of thousands of pregnant women in families that make too much to qualify for Medicaid but still need assistance. This has helped reduce children’s uninsurance rates from 14 to under 5 percent over the last 20 years. So it’s alarming that at the end of September, Congress failed to renew CHIP and other healthcare programs before their funding authorizations ran out, because Republican leaders were busy with an ill-advised last-ditch attempt to repeal and replace the Affordable Care Act (ACA).


On November 3, the House passed a bill renewing CHIP for five years. The bill also extends some of those other neglected health programs, like community health center funding, for two years, and provides $1 billion to bolster Medicaid programs in Puerto Rico and the US Virgin Islands as they struggle to cope with the aftermath of recent hurricanes. It seems like a hopeful development, a delayed but real attempt to revive the program before states run out of leftover funds and must wind down their programs, potentially leaving up to 4 million kids uninsured. (Some states would instead put those former CHIP recipients on Medicaid.)

But the House’s bill is deceptive: It’s an old proposal, littered with poison pills, that has no chance of passing. In reality, legislators have done almost nothing to save CHIP since their failure in September; the House bill may actually set reauthorization back by weeks. And the country may not see any resolution on this matter until the end of the year—in time to save the program before a widespread collapse, but not in time to stave off possible damage or coverage losses.

“We certainly find ourselves in an unprecedented situation today, with funding having lapsed for this amount of time,” said Joan Alker, a Georgetown professor who has studied CHIP since its inception in 1997. (Funding lapsed briefly during a reauthorization process in 2007 thanks to a presidential veto.) “This is a very unfortunate situation when we have a bipartisan, successful program that everyone says they want to get done. And it’s not done.”

The stakes in this debate are high, and the clock is ticking: A couple of states had warned they’d run out of cash for their CHIP programs within weeks of the September deadline and would send out notices to families, alerting them of potential coverage losses by the start of November. Up to 11 states were, as of early October, set to run out of funds by year’s end. (Most have managed to procure last-minute extra funding to keep their programs running a bit longer than expected, a temporary fix.)


Congress has actually been in bipartisan agreement on the core elements of CHIP renewal since mid-September. The idea is to extend the program for five years while winding down an ACA provision that increased the feds’ share of funding for it. As Alker told me, coming to an agreement like that is usually the heaviest lift for legislators, so she was surprised and heartened to see consensus on a reasonable compromise so early on. It seemed possible that, with ACA repeal efforts out of the way, Congress could tie up loose ends and secure CHIP’s future within weeks, demonstrating a capacity for bipartisanship and giving Republicans a chance to show that they aren’t totally ineffective at running Congress.

The only barrier was finding bipartisan agreement on how to pay for the extension. CHIP has been reauthorized three times since 1997, and each time these negotiations were fairly easy, notes Edwin Park, a CHIP policy expert at the nonpartisan Center on Budget and Policy Priorities. Even in 2015, not a period of great Congressional harmony, legislators managed to carry out quiet but productive negotiations and agree on offsets both parties could get behind in time to renew the program several months ahead of the deadline for its funding wind-down.

When the Senate released its CHIP bill in September, it made no mention of offsets or other programs to be shoehorned in, suggesting negotiations like those Park mentions were afoot. But the House bill laid out a series of partisan offsets. It would pilfer cash from an ACA public health fund, lower the grace period for missing payments on an ACA plan—likely causing hundreds of thousands to lose coverage while saving the government money—and raise premiums for wealthier Medicare recipients. Democrats made it clear from the start these measures, which essentially undermine the ACA, were non-starters. That clearly doomed the measure in the Senate. After all, Park pointed out, in the past “Congress has shown it can come up with savings to help one population that don’t cut another.” So why agree to this?

Rather than initiate negotiations, House Republican leaders brought their bill to a floor vote and passed it on mostly party lines. Since the Senate is likely to reach a drastically different bipartisan negotiation on offsets down the line, this will just make it harder to reconcile their ideas with the House bill, potentially extending uncertainty over CHIP by days or weeks.

Park suspects the House advanced this bill just to convey a sense of progress. The bill also allows them to ding Democrats before the 2018 midterms for not voting for a form of CHIP extension. To Alker, this move suggests “that the fervent desire to get CHIP done had faded,” in the House at least. This may be because legislators are reaching a consensus that they can just shove CHIP into an omnibus 2018 government funding bill in mid-December, avoiding the need to negotiate a standalone bill that’d take focus away from current priorities like tax reform.


Meanwhile, public servants are scrambling behind the scenes to maintain the status quo. Thanks to the redistribution of leftover funds at the Centers for Medicare and Medicaid Services, states at the highest risk of running out of funds have been able to push back their wind-down dates. And state administrators, in order to avoid confusion, are holding off on sending out coverage change notices as long as they can in hopes that Congress will reassure them they’ll get funding soon. This cash infusion has helped vulnerable states, said Carrie Fitzgerald of the child policy advocacy group First Focus, but it “has not helped us with the urgency message.”

Oddly, Park notes, the administration is not releasing all the leftover CHIP funds in one go, as in the past, but in last-minute, as-needed bursts. No one I’ve spoken to is sure why that is. But this makes it impossible for states to say, definitively, when their programs will run out of money. So administrators can’t communicate a real crisis deadline to their congresspeople. Even when states do set a clear date for sending out coverage change notices, legislators can construe this as meaning they have at least a month before people actually start losing coverage, said Fitzgerald.

But dire consequences are right around the corner. Around a dozen states are still set to run out of funding by year’s end. Colorado, Nevada, Oklahoma, Utah, and Virginia all seem likely to send out notices on coverage changes in late November or early December, before Congress could renew CHIP in that government funding omnibus bill. Arizona could be out of cash by the end of the month. And several states have already drafted plans for how they will wind down their programs. These notices may not seem like crises to legislators, but they pack a punch. Families may stop paying premiums for or not re-enroll in CHIP after receiving them because they think that means the program is already gone or soon to vanish. When letters go out, said Alker, “we’re going to lose some kids.”

There’s always a chance Congress could get its act together and move on CHIP within the next few weeks. But given the focus on tax reform all month, and legislators’ apparent willingness to date to believe that there is no imminent CHIP crisis, that seems unlikely.

Relying on the December funding bill as a vehicle for CHIP is hardly a safe bet, either. As Park notes, that bill is also the vehicle of choice for a host of other hot-button issues, like immigration reform. Any one of those other factors could lead to a federal government shutdown, delaying that funding bill and thus CHIP renewal. Even if the government stays open, it’s far from clear that CHIP will survive the complicated negotiating process that will shape that funding bill intact. “We do worry about late-night negotiations with people who, maybe this isn’t something they know well or it isn’t their priority,” said Fitzgerald.

So this is where we are: Congress is snapping at every opportunity to convince itself it doesn’t need to act on CHIP until year’s end. By so doing, it’s risking serious consequences for thousands—or millions—of children. This is a doubly depressing state of affairs because there was never any reason for CHIP’s continuation to reach this level of uncertainty. “It’s really a question of priorities,” said Alker. And Congress’s are clearly out of whack.

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