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CHIP Advocates Cast Wary Eye on the Calendar

By John Reichard, CQ HealthBeat Editor

April 21, 2014 -- Champions of the Children's Health Insurance Program (CHIP) are starting to worry about its future with federal funding set to expire in 18 months and new coverage alternatives available under the health law.

A central question is whether advocates can convince Congress the program covering 8.5 million children is worth keeping even though states now have the option of expanding their Medicaid programs to help cover that population. Lawmakers also authorized hundreds of billions of dollars in subsidies to buy coverage on insurance exchanges.

Even if the programs supporters succeed, it's not clear for how long. And if Congress waits until the last minute to act, leaving CHIP's funding outlook uncertain, advocates may have to talk state legislators out of capping CHIP enrollment and taking other steps to control costs.

Right now, it looks like Congress may extend CHIP funding through fiscal 2017, if not longer. But whether it will fund the program as generously as it does now is unclear. So is the timing of congressional action.

CHIP's fate was foremost on the mind of Sen. Jay Rockefeller, D-W.Va. when he questioned HHS Secretary Kathleen Sebelius at a Senate Finance Committee hearing April 10.

"We're funded, you know, through this year and part of next and then it just stops," he said. A 2009 law (PL 111-3) reauthorized CHIP through fiscal 2013, and the health law (PL 111-148, PL 111-152) tacked on another two years of funding through Sept. 30, 2015.

Rockefeller said he wanted to understand whether President Barack Obama and HHS officials want to maintain the program "for a period of years and years, because right now, it just strikes—it's strange that he hasn't mentioned it."

Sebelius attempted a soothing response that fell short because she gave no assurances.

"We're going to see more children gaining benefits than ever before," she said, in part because of a simplified CHIP and Medicaid application process. Rockefeller agreed but said he'd be happy if Obama in one of his press conferences "just mentioned it."

"It's just odd to me knowing him and his commitments, that he just simply hasn't mentioned it at all," the senator said.

The panel Congress created under the health law to advise it on CHIP and Medicaid said at a meeting the next day it isn't committed to having a standalone coverage program like CHIP continue indefinitely. It cited what it called "new affordability options" through the health law as the reason.

But children's advocacy groups like First Focus say coverage sold on insurance exchanges isn't as generous as that offered by CHIP. And the advisory panel whose formal title is the Medicaid and CHIP Payment and Access Commission, or MACPAC, echoed that concern. An analysis by its staff said if CHIP funding runs out after fiscal 2015, the number of uninsured children could increase significantly. Cost-sharing also could rise for many families.

It's "unclear whether or not exchange plans are ready to serve as an appropriate alternative," the analysis stated.

The panel voted April 11 to recommend to Congress that it extend CHIP funding through fiscal 2017. That transitional step would allow issues relating to the affordability and adequacy of children's coverage in the absence of CHIP to be addressed, the panel said.

A Senate GOP aide said the recommendation "definitely has legs" on Capitol Hill depending on how the Congressional Budget Office (CBO) scores its cost. MACPAC has asked CBO to score both a two-year and a four-year extension, and the score could be released at any time, the aide said.

Obama administration officials are "sitting on their hands right now and waiting to decide what they want to do here."

Both Republicans and Democrats face quandaries on a program extension. Republicans may not want to continue current levels of federal funding but risk political fallout if they move to take coverage away from children at a time when they're trying to regain control of the Senate and win the White House in 2016.

Meanwhile, Democrats who endorse extending CHIP could be seen as tacitly admitting that the health law isn't working the way it's supposed to. "Everybody has an incentive to do this early not late," the aide said concerning an extension.

But Congress often dawdles until the last minute. Both Senate Finance Committee Chairman Ron Wyden, D-Ore., and the panel's top Republican Orrin G. Hatch of Utah "may keep their cards close to the vest" on the issue. But the aide predicted Rockefeller will introduce legislation this year—his last before retiring—to prod lawmakers.

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