Congress reviews legislation to reauthorize CHIP and other health safety net programs as funding expires; Counties concerned about proposed offset

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September 30 marked the final day of Fiscal Year (FY) 2017, and with it, the expiration of funding for the congressionally-authorized Children’s Health Insurance Program (CHIP) and other health safety net programs including community health centers and disproportionate share hospitals (DSH). It is expected that a final legislative package extending funding for CHIP, which provides health insurance to children in families with incomes that are modest but too high to qualify for Medicaid, would be the vehicle for attaching funding for the other health safety net programs.

Since its inception in 1997, CHIP has carried broad bipartisan support in Congress. Together, CHIP and Medicaid insure over 30 million children and cover a range of health services, such as prenatal doctor visits for pregnant women and dental checkups for young children. In 780 of the nation’s 3,069 counties, over 50 percent of children receive health insurance coverage under Medicaid or CHIP. Like with Medicaid, counties sometimes help states finance and administer the CHIP program. Additionally, counties support efforts to improve health coverage and ensure that low-income residents, families, and children have access to affordable, high-quality health care.

CHIP was last reauthorized for two years under the “Medicare Access and CHIP Reauthorization Act of 2015”. The bill funded CHIP for FY 2016 and FY 2017 at approximately $13.9 billion and $15.9 billion, respectively, according to the Medicaid and CHIP Payment and Access Commission (MACPAC).

Efforts to repeal and replace the Affordable Care Act had sidelined congressional efforts to reach a bicameral agreement to reauthorize CHIP by the September 30 deadline. In addition, in early September, Senate Minority Leader Chuck Schumer (D-N.Y.) and House Minority Leader Nancy Pelosi (D-Calif.) negotiated a three-month continuing resolution and extension to the debt ceiling, which could have also served as a legislative vehicle to attach these reauthorizations.

On September 18, the U.S. Senate released S. 1827, the “Keeping Kids’ Insurance Dependable and Secure (KIDS) Act.” Sponsored by Senator Orrin Hatch (R-Utah), the KIDS Act would reauthorize CHIP for five years, but does not specify the budgetary offsets that would pay for this funding extension. The Senate Finance Committee, which holds jurisdiction over CHIP, will mark-up the legislation on October 4 (livestream available here).

On October 3, the U.S. House of Representatives released legislative text for multiple health programs, including CHIP and community health centers, and scheduled markups on the proposals also for tomorrow. Their bill to reauthorize CHIP is titled the “Helping Ensure Access for Little Ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable (HEALTHY KIDS) Act of 2017” (legislative text available here; bill number not assigned at press time).

The HEALTHY KIDS Act of 2017 would reauthorize CHIP for five years, and additionally contains other provisions that would delay the scheduled cuts to DSH payments by one year and provide $1 billion in Medicaid funds to Puerto Rico. Offsets include charging higher Medicare premiums to wealthier seniors and allowing states to dis-enroll lottery winners from the Medicaid program.

A separate piece of legislation titled the ‘‘Community Health And Medical Professionals Improve Our Nation Act (CHAMPION Act) of 2017’’ (legislative text available here; bill number not assigned at press time) would reauthorize community health centers (for two years), in addition to other health programs. However, the bill would be offset by a $6.35 billion cut in future appropriations to the Prevention and Public Health Fund. The Fund provides approximately $900 million annually in support of state and local public health and prevention efforts, including activities like immunizations and diabetes prevention efforts. This federal funding source is extremely important for the nation’s 2,800 local public health departments, two-thirds of which are county-based. 

NACo is supportive of congressional efforts to extend CHIP, community health centers, scheduled cuts to DSH payments and other health safety net programs but strongly opposes efforts to cut federal funding for the Prevention and Public Health Fund. Cuts to this fund would be a blow to already-strained county public health departments and inhibit their ability to implement activities that keep their residents healthy and safe. 

If Congress is not able to pass legislation to extend funding for these programs over the next few months, it is expected that they could combine these into a must-pass legislative package that will be necessary when the continuing resolution and debt limit extension expires December 8. NACo will continue to monitor legislative developments and their potential impact to counties.

For more NACo resources on health care programs, please see the following:

Policy Brief: Protect funding for core local public health services and prevention programs

Senate Finance Committee introduces CHIP reauthorization bill

After the Senate blinked, what's next for health care?

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