CHIP Funded for 6 Years in Stopgap Bill That Reopens US Government

Allison Inserro

The Children’s Health Insurance Program (CHIP) was funded for 6 years, through fiscal year (FY) 2023, under a deal worked out between Senate Majority Leader Mitch McConnell, R-Kentucky, and Senate Minority Leader Charles Schumer, D-New York.

The CHIP funding was included as part of a stopgap spending measure to reopen the US government and allow federal employees back to work as early as Tuesday. The stopgap measure expires February 8.

Senators voted 81-18 to approve the measure after McConnell promised to allow an immigration bill to reach the floor next month. After the Senate vote, the House voted on it again, and it headed to President Donald Trump’s desk, who could sign it Monday night.

Senate Finance Committee Chairman Orrin Hatch, R-Utah, also said in a statement the bill passed by the Senate delays 3 taxes included in the Affordable Care Act: the medical device tax through 2019, the so-called Cadillac tax through 2021, and the Health Insurance Tax (HIT) in 2019.

The Cadillac tax is a 40% excise tax on employer plans exceeding $10,200 in premiums per year for individuals and $27,500 for families. The HIT is paid by small businesses that cannot self-insure, like large corporations. The 2.3% medical device tax is already delayed. 

CHIP, which expired on September 30, 2017, covers 8.9 million children through Medicaid or other state-administered plans. Despite a history of bipartisan support from Congress, the legislature passed only a $2.85 billion allocation in December. The money was intended to last until March, but most states were slated to run out of funds by February 1.  

CHIP, which is jointly funded by states and the federal government, would see an enhanced federal matching rate at 23% through FY 2019, change to 11.5% for FY 2020, and return to 0% or a traditional CHIP matching rate for fiscal years 2021, 2022 and 2023.

Hatch said it would also create protections and flexibility under the maintenance-of-effort provision.

In a statement, Colleen Kraft, MD, FAAP, president of the American Academy of Pediatrics, applauded the bipartisan action "after 114 days of worry" and called for additional action on maternal and child health. “Now that Congress has acted on CHIP, we urge a similar bipartisan approach to the other pressing child health issues that remain unresolved, such as the Maternal Infant, and Early Childhood Home Visiting Program (MIECHV), which serves at-risk pregnant women and parents with young children. We also call on lawmakers to find a permanent solution that will allow Dreamers—immigrants brought to the United States as children and who are now young adults—to remain in the United States."

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