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Clean Extension of Children's Health Program Eyed for Lame Duck

By Melissa Attias, CQ Roll Call

September 25, 2014 -- Backers of the Children's Health Insurance Program (CHIP) are jockeying to get an additional four years of funding included in any year-end deal that clears Congress after the elections, but Republicans seeking changes may be reluctant to oblige them so far ahead of its September 2015 expiration date. Although Democrats in both chambers have introduced bills (S 2461, HR 5364) that would renew the program's funding and make policy adjustments, efforts are expected to focus on a "clean" four-year extension during the lame duck session. Roughly 8 million children receive coverage through CHIP, which was designed for children whose families earn too much to qualify for Medicaid but too little to afford private insurance.

"We want to be as clean and simple as possible," said Bruce Lesley, president of the advocacy group First Focus, who noted that policy provisions could be debated in a later package. In the Senate, West Virginia Democrat Jay Rockefeller–a champion of CHIP who will retire at the end of the session–plans to pursue a four-year renewal in the lame duck, according to a spokeswoman. That would align the program's funding stream with its "maintenance of effort" eligibility and enrollment standards (PL 111-148, PL 111-152), which expire at the end of fiscal 2019. An omnibus spending bill or a package of tax extenders are two potential legislative vehicles, the spokeswoman added. Retiring Rep. Henry A. Waxman of California, the top Democrat on the Energy and Commerce Committee, is also looking for opportunities to push CHIP funding over the finish line in the lame duck session. States are already planning their 2015 budgets, a Waxman spokeswoman said, so providing them with certainty early on while ensuring children's coverage isn't disrupted should be a goal everyone can agree on.

But Republicans appear comfortable with a slower pace. An Energy and Commerce spokeswoman said Chairman Fred Upton supports CHIP and is collecting input from states and other stakeholders about how to improve the program before its funding expires. That process is underway, she said, but any legislative action will occur next year. The Michigan Republican, along with Waxman, Senate Finance Chairman Ron Wyden, D-Ore., and Finance ranking Republican Orrin G. Hatch of Utah, sent letters to all 50 governors in July asking for information about their programs by Oct. 31 as their committees consider whether and how CHIP should be extended.

Hatch is focused on getting that input because CHIP funding does not expire until September 2015, according to spokesman Aaron Fobes. "Moving forward, he hopes to use this feedback to reform CHIP in a bipartisan and bicameral way that puts the program back on a fiscally responsible path," Fobes said in an email.

CHIP advocates are trying to stress the urgency of early action, however, given that the joint program is state-administered like Medicaid. James M. Perrin, president of the American Academy of Pediatrics, said states are already working on their upcoming budgets and could be put in a difficult situation by funding uncertainties.

"We think it's very important this year," Perrin said.

Although some experts thought the 2010 health care law would make CHIP unnecessary, advocates say many things would need to be fixed before children covered by the program could move into the insurance exchanges the law created.

Mara Youdelman, managing attorney for the National Health Law Program in Washington, D.C., said her group is concerned that many children would completely lose health coverage if CHIP goes away. And while some will end up in the exchanges, she said, the new marketplaces' ability to meet children's specific needs hasn't been well-evaluated.

"We believe that there are services lacking that children will need," Youdelman said.

In contrast with advocates' push for a four-year extension, the Medicaid and CHIP Payment and Access Commission (MACPAC) in June recommended a two-year extension as a transition period for Congress to consider how to effectively incorporate CHIP enrollees into other sources of coverage. The commission noted that an additional extension should be considered if necessary.

But the report also provided advocates with encouraging news in terms of price. It cited Congressional Budget Office estimates that two more years of funding would cost $5 billion or less–nowhere close to another health policy contender in the lame duck–a roughly $130 billion effort to overhaul Medicare's physician payment formula.

"The federal costs of providing CHIP allotments for two more years would be largely offset by reductions in federal spending for Medicaid and subsidized exchange coverage–sources of federally subsidized coverage in which many children are assumed to enroll if CHIP funding were to be exhausted under current law," the report said.

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