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Four Takeaways from Trump’s Plan to Rescind CHIP Funding

Four Takeaways from Trump’s Plan to Rescind CHIP Funding

President Donald Trump wants to employ a rarely used budget maneuver called “rescission” to eliminate $15 billion in federal spending, including $7 billion from the popular Children’s Health Insurance Program (CHIP).

Administration officials insist the cuts wouldn’t negatively affect any programs — rather, they would merely return money into the Treasury that Congress appropriated but is no longer needed.

In a statement on the White House blog, Russ Vought, the deputy director of the Office of Management and Budget, said the administration strongly supports the CHIP program. “Rescinding these funds will have no impact on the program,” Vought wrote. “At some point Congress will likely ‘rescind’ those funds as a budget gimmick to offset new spending elsewhere, as it did on the recently passed omnibus. Instead Congress should rescind the money now.”

But child health advocates are wary, particularly since the proposal comes a few months after Congress let funding authorization for CHIP lapse, which forced states to request millions in emergency contingency funds to keep children covered.

CHIP, which covers 9 million children from low-income families that earn too much to qualify for Medicaid, is mostly federally funded. But states operate the program within federal guidelines.

As budget hawks and children’s advocates dispute the effect of the plan, here are some takeaways on the Trump proposal.

What Are Rescissions?

Since the 1970s, presidents have had the power to take back money from federal programs previously appropriated by Congress — if Congress approves. That budget tool is not regularly used. The last president to seek and get approval for one was President Bill Clinton.

Once the president recommends a rescission, Congress has 45 days to approve the request. It needs only a majority vote in each chamber to pass.

If it isn’t approved, the rescission does not take effect.

The president can recommend such cuts only with funds that Congress appropriates. Mandatory programs, such as Medicaid and Medicare, are not subject to rescissions.

Will Cutting $7 Billion From CHIP Really Have No Impact On The Program?

That’s hard to say.

There is $7 billion at stake. The administration says $5 billion can no longer be spent because the period for it to be sent to states has expired. The other $2 billion is being taken from a federal contingency fund for CHIP. That money is to be used only if they face a budget shortfall. The economy is improving, and the administration is betting demand for CHIP will wane, leaving little need for the contingency fund.

“Anytime you cut spending, there is going to be some effect, said Marc Goldwein, senior vice president of the nonpartisan Committee for a Responsible Federal Budget. “But in terms of CHIP, it’s likely close to be zero — these are tiny cuts.”

Still, child health advocates, who endured months of uncertainty about whether Congress would restore federal funding to CHIP in 2017, are worried.

“I think the cut to the contingency fund is particularly troubling,” said Bruce Lesley, president of First Focus, an advocacy group.

Why Is President Trump Using This Budgetary Maneuver?

After signing a $1.3 billion spending bill in March, the president came under pressure from conservatives in Congress to cut the federal deficit. It is projected to hit nearly $1 trillion next year.

One strategy, according to these conservatives, is to rescind money that has not been spent to keep lawmakers from tapping those funds to pay for other programs.

Should Parents Of Kids On CHIP Be Worried?

Yes, if Congress goes along with the cuts, said David Super, a law professor at Georgetown University. But political analysts suggest that’s not likely to happen since some Republican senators have already spoken out against the move. With Republicans holding a 51- 49 majority in the Senate — and Sen. John McCain (R-Ariz.) battling brain cancer back home — the president likely would need all Republicans in the Senate to pass a rescission.

“This is pure political theater, ugly theater,” Super said.

He notes the administration is telling conservatives the cuts will reduce the deficit. But in media calls, senior administration officials said the cuts won’t have any programmatic effects.

“If the money would not have been spent, there are no savings,” Super said. “Any rescission of money that would not be spent, by definition, cannot reduce the deficit.”

Other programs targeted for cuts include relief funds for Hurricane Sandy, which struck in October 2012, and money allocated to respond to a possible outbreak of the deadly Ebola virus.

Super noted health advocates should be most worried about the $800 million in rescissions identified by the administration to the Center for Medicare and Medicaid Innovation. This program was created by the 2010 Affordable Care Act to find ways to make health programs work more efficiently — and save money.

Article reprinted by permission from KHN. KHN’s coverage of children’s health care issues is supported in part by the Heising-Simons Foundation.

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As CHIP Funding Lags, Doctors And Parents Scramble To Cover Kids’ Needs

As CHIP Funding Lags, Doctors And Parents Scramble To Cover Kids’ Needs

Dr. Mahendra Patel, a pediatric cancer doctor, has begun giving away medications to some of his patients, determined not to disrupt their treatments for serious illnesses like leukemia, should Congress fail to come up with renewed funding for a key children’s health program now hostage to partisan politics.

In his 35 years of practice, Patel, of San Antonio, has seen the lengths to which parents will go to care for their critically ill children. He has seen couples divorce just to qualify for Medicaid coverage, something he fears will happen if the Children’s Health Insurance Program (CHIP) is axed. He said: “They are looking at you and begging for their child’s life.”

The months-long failure on Capitol Hill to pass a long-term extension to CHIP that provides health coverage to 9 million lower-income children portends serious health consequences, with disruption in ongoing treatments.

While funding promises and estimates of dates for it disappearing vary from week to week and state to state, treatment plans for serious diseases span months into the future, leaving some doctors, like Patel, to jury-rig solutions. The challenges are particularly great for kids with chronic or ongoing illnesses such as asthma or cancer.

Dr. Joanne Hilden, a pediatric cancer physician in Aurora, Colo., and past president of the American Society of Hematology-Oncology, said cancer patients who are worried their CHIP funding will run out can’t schedule care ahead of time.

A San Antonio pediatrician, Dr. Carmen Garza, is advising parents to be sure to keep their children’s asthma medications and other prescriptions current and fill any refills that they can so they don’t get left without vital medicines if CHIP expires.

Federal funding for CHIP originally ran out Oct. 1. In December, Congress provided $2.85 billion to temporarily fund the program. That was supposed to help states get through at least March, but it is coming up well short. The Centers for Medicare & Medicaid Services (CMS) last week said it couldn’t guarantee funding to all states past Jan. 19.

About 1.7 million children in 20 states and the District of Columbia could be at risk of losing their CHIP coverage in February because of the shortfall, according to a report Wednesday by the Georgetown University Center for Children and Families.

A few states, including Louisiana and Colorado, plan to use state funds to make up for the lack of federal funding. But that is a drastic step, since the federal government pays on average nearly 90 percent of CHIP costs. Most states cannot afford to make up the difference and will have to freeze enrollment or terminate coverage when their federal funding runs out.

Virginia and Connecticut can promise to keep their CHIP program running only through February, officials said.

The largest states seem to be in the best shape, though even that guarantees only a few months of care. Florida, California and Texas officials said they have enough CHIP funding to last through March. New York officials said they have enough money to last at least into mid-March.

Before the short-term funding was passed in late December, CHIP programs survived on the states’ unspent funds and a $3 billion redistribution pool of CHIP dollars controlled by CMS.

Republicans and Democrats on Capitol Hill say they want to continue CHIP, but they have been unable to agree on how to continue funding it. The House plan includes a controversial funding provision — opposed by Democrats — that takes millions of dollars from the Affordable Care Act’s Prevention and Public Health Fund and increases Medicare premiums for some higher-earning beneficiaries.

The Senate Finance Committee reached an agreement to extend the program for five years but did not unite around a plan on funding.

But two key Republican lawmakers — Sen. John Cornyn of Texas, who is part of the Senate leadership, and Rep. Greg Walden of Oregon, who chairs the House Energy and Commerce Committee — told reporters Wednesday that they think an agreement is close.

Alabama and Utah are among several states unsure how long their federal CHIP funding will last, according to interviews with state officials. Part of the problem is they have not been told by CMS how it will be disbursing money from the redistribution pool. Under the pool restrictions, states with excess dollars would have to give money to states running low.

Although health care provider groups and child health advocates have for months been sounding the alarm about CHIP, the Trump administration has kept quiet, saying it’s up to Congress to renew the program.

When Marina Natali’s younger son broke his arm ice-skating last year, she did not have to worry about paying: CHIP footed all of his medical bills.

Had that accident happened this year, though, Natali, 50, of Aliquippa, Pa., might be scrambling. She cannot afford private coverage for her two children on her dental hygienist pay.

“It’s creating a lot of anxiety about not having insurance and the kids getting sick,” she said.

Dr. Todd Wolynn, a Pittsburgh pediatrician, said families are reacting with “fear and disbelief” to CHIP’s uncertain future. The group practice hasn’t changed any scheduling for CHIP patients, but he said “families are terrified” about the program having to be terminated.

Pennsylvania officials sent a notice to CHIP providers in late December — who then sent it to enrollees — saying it would have to end the program in March unless Congress acts.

“These families don’t know if the rug is being pulled out from them at any time,” he said.

Dr. Dipesh Navsaria, a Madison, Wis., pediatrician and vice president of the state’s chapter of the American Academy of Pediatrics, said many parents and doctors have been told for months that Congress would firm up long-term funding for CHIP, but those promises have been dashed.

“If CHIP coverage disappears, we run the risk of kids going without care or emergency room visits going up,” he said.

Navsaria also worries that many parents will be surprised if their children are suddenly without coverage. They may not know the state-branded programs they use, such as BadgerCare Plus in Wisconsin, Healthy Kids in Florida and All Kids in Alabama, are part of the CHIP program.

Ariel Haughton of Pittsburgh said she’s upset her federal lawmakers have left CHIP in flux for her two children and millions of kids around the country. “They seem so cavalier about it,” she said.

If CHIP gets canceled by the state, she likely won’t bring Javier, 2, for his two-year checkup if nothing seems wrong. “We will have to decide between their health and spending the money on something else,” she said.

Article reprinted from Kaiser Health Network. KHN’s coverage of children’s health care issues is supported in part by the Heising-Simons Foundation

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Children’s Insurance, Other Health Programs Funded — For Now — In Bill

Children’s Insurance, Other Health Programs Funded — For Now — In Bill

The bill passed by Congress in late December to keep most of the federal government funded for another month also provided a temporary reprieve to a number of health programs in danger of running out of money, most notably the Children’s Health Insurance Program, or CHIP.

Funding for CHIP technically expired Oct. 1. States have been operating their programs with leftover funds provided by the Department of Health and Human Services since then. But nearly half of the states were projected to run out of money entirely by the end of January, putting health coverage for nearly 2 million children at risk by that point.

The funding provided by Congress for CHIP — $2.85 billion — is for six months, but it is back-dated to Oct. 1, so it will run out at the end of March 2018. The program covers 9 million children across the country.

This week, Alabama announced it would curtail enrollment and renewals starting Jan. 1, and start disenrolling children currently in the program Feb. 1. On Friday, the state posted a notice on its website that those plans were now canceled. Several other states, including Colorado, Virginia and Utah, have begun the process of notifying families that their coverage could end unless Congress acts.

The funding bill also provided a temporary reprieve for a raft of other health programs that were running out of money, most notably the nation’s community health centers, which provide basic primary care to 27 million Americans. Many centers are already freezing hiring, laying off staff and closing sites due to the uncertain funding stream from Washington.

Other health programs that were set to expire but have been funded, for now, include the National Health Service Corps, which places health practitioners in medically underserved areas, and the teaching health centers program, which trains medical residents in community health centers.

Backers of CHIP complain that short-term funding fixes are disruptive to the program.

“By failing to extend long-term funding for the Children’s Health Insurance Program, Congress falls far short of the reassurance and relief families deserve,” said a statement from the American Academy of Pediatrics.

A coalition of children’s groups, including the Children’s Defense Fund and the March of Dimes, agreed, saying the short-term funding “only causes more chaos and confusion on the ground.”

Both Republicans and Democrats strongly support CHIP, which was created in a 1997 budget bill. What they disagree on is whether its funding — expected to be roughly $8 billion over the next 10 years — should be paid for by cutting other health programs. The House in November passed a five-year renewal that would finance CHIP primarily by reducing the Affordable Care Act’s Prevention and Public Health Fund and by raising some people’s Medicare premiums. Democrats question why CHIP needs to have its funding offset while Republicans are adding $1.4 trillion to the deficit through their tax cut bill.

KHN’s coverage of children’s health care issues is supported in part by the Heising-Simons Foundation. Article by Julie Rovner, jrovner@kff.org, @jrovner

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CBO Analysis of Proposed CHIP Funding Bill Causes Doubt

CBO Analysis of Proposed CHIP Funding Bill Causes Doubt

More than three weeks after the deadline to renew the Children’s Health Insurance Program, the Congressional Budget Office has released an analysis of the five-year extension bill, which would extend the bill to 2022 so they can make a few changes, including revamping federal matching rates. The CBO analysis, which also indicated the proposed legislation would increase the federal deficit by $8.2 billion by 2027, is causing Alabama and other states to fear and doubt the CHIP funding.

Nationally, CHIP provides insurance for children up to age 19 whose households make up to 312 percent of the poverty line – up to $50,688 a year for a household of two, and up to $63,710 for a household of three. Qualifying families pay premiums – ranging from $52 to $104 per child per year, depending on income – as well as co-pays. ALL Kids, administered by the Alabama Department of Public Health, covers about 83,000 children, while about 70,000 CHIP recipients fall under Alabama Medicaid.

The Medical Association was a vital in creating CHIP in Alabama more than 20 years ago as a way to provide more health insurance coverage to children of families with low and moderate incomes. Although this is a nationwide crisis, Alabama’s program has funds to continue through March, while some states may lose all their funding by December.

Studies credit CHIP with a steep decline in the number of uninsured children in the country and particularly successful in Alabama. A 2014 study credited CHIP with reducing the number of uninsured children in Alabama 18 percent between 2011 and 2014.

“The benefits package for children is very comprehensive,” said Dr. Wes Stubblefield, a Florence pediatrician and president of the Alabama Chapter of the American Academy of Pediatrics. “It’s everything recommended by the American Academy of Pediatrics that’s recommended as a standard of care for children for preventative care.”

The Medical Association will continue to monitor the progress of this proposed legislation and is eager to work with lawmakers toward a positive solution.

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UPDATE: Lawmakers Back to the Drawing Board for CHIP Funding Renewal

UPDATE: Lawmakers Back to the Drawing Board for CHIP Funding Renewal

UPDATED OCT. 12, 2017 — Legislation to renew funding for the Children’s Health Insurance Program has stalled in the U.S. House as lawmakers continue debating how to pay for the program. This is the third delay requested by the Democrats as the lawmakers now work to mark up the legislation to extend funding for critical programs other than CHIP, such as Community Health Centers and to provide an additional $1 billion to Puerto Rico’s Medicaid program.

Both parties agree on the urgency of passing a CHIP bill. Federal funding for the program expired Sept. 30, and the longer Congress delays taking action, the tougher it will be on states.

Eleven states anticipate they will burn through their federal funding by the end of 2017, according to the Kaiser Family Foundation, and 32 states project they will exhaust federal funds by the end of March 2018.

Click here to read House Energy and Commerce Committee Chairman Greg Walden’s Statement on CHIP and Extending Critical Public Health Programs


OCTOBER 6, 2017 — After being unable to come together to meet a Sept. 30 deadline that would have renewed funding for the Children’s Health Insurance Program for five years, lawmakers in Washington were back at the drawing board this week looking for solutions to ensure federal funding for CHIP even though the Senate Finance Committee reached a bipartisan deal in mid-September to extend funding for five years.

Earlier in September, the U.S. Senate Finance Committee reached an estimated $8 billion bipartisan agreement to renew CHIP funding for five years and phase out the 23 percent Obamacare funding bump. States would have maintained eligibility through 2019, and after that there would be no so-called maintenance of effort for children of parents with incomes more than 300 percent of the federal poverty level.

The Medicaid and CHIP Payment and Access Commission has estimated that all states will exhaust their federal CHIP reserves in 2018 without an extension but warns that an extension alone will not be enough.

“If Congress extends funding but does not include the 23 percentage-point increase in the federal matching rate that was provided in the ACA, most states will still face shortfalls, since many assumed continued funding with the enhanced match rate,” it noted.

In Alabama, CHIP funding is split between Alabama Medicaid and the Alabama Department of Public Health. ADPH administers the ALL Kids program, which covers about 83,000 of Alabama’s children, while Medicaid provides covers for an additional 70,000 children.

The Medical Association, the Alabama Chapter of the American Academy of Pediatrics, state lawmakers and a number of organizations advocating for children’s health care petitioned the Alabama Congressional Delegation to support reauthorization of a bipartisan CHIP funding bill before the Sept. 30 deadline. In a letter to the Alabama Congressional Delegation outlining support for CHIP reauthorization, the coalition cited the great strides made possible through CHIP in ensuring children have access to the care they need. As well, any reductions in federal CHIP funding could cause problems for not only Alabama’s ALL Kids program but also children enrolled in Alabama Medicaid.

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Coalition Pushes for CHIP Reauthorization

Coalition Pushes for CHIP Reauthorization

 

 

DOWNLOAD A COPY OF THE JOINT LETTER

The Medical Association, the Alabama Chapter of the American Academy of Pediatrics, state lawmakers and a number of organizations advocating for children’s health care are petitioning the Alabama Congressional Delegation to support reauthorization of a bipartisan CHIP funding bill before the Sept. 30 deadline. In a letter to the Alabama Congressional Delegation outlining support for CHIP reauthorization, the coalition cited the great strides made possible through CHIP in ensuring children have access to the care they need. As well, any reductions in federal CHIP funding could cause problems for not only Alabama’s ALL Kids program but also children enrolled in Alabama Medicaid.

Below is the letter, and more signees are expected before the Sept. 30 deadline. Download a copy of the letter here.

We, the undersigned Alabama elected officials and organizations advocating for children and pregnant women in our state, write to urge your support of the Hatch-Wyden bill, Keeping Kids’ Insurance Dependable and Secure (KIDS) Act (S. 1827). This bipartisan legislation ensures stability for vulnerable children by extending funding for the Children’s Health Insurance Program (CHIP) for five years. The bill also provides additional protections for low-income children and increases flexibility for states.

As you know, federal funding for CHIP expires on September 30, 2017. Without certainty from Congress on CHIP funding, states will be forced to make drastic cuts to the program. This could mean slashing enrollment, reducing benefits, and imposing higher costs for families.

CHIP is a bipartisan success story. The program was created in 1997 and has been championed by lawmakers on both sides of the aisle since its very beginning. Together with Medicaid, CHIP has helped to reduce the numbers of uninsured children by a remarkable 68 percent. Now is the time for Congress to stabilize the CHIP funding stream and protect the gains in children’s health coverage that have resulted in more than 95 percent of all children in America being enrolled in some form of insurance coverage.

The program is designed around what children need. It offers benefits that are age-appropriate, including dental coverage and mental health and substance abuse services, which may not be covered by a family’s employer-sponsored insurance.

CHIP plans include networks of pediatricians, pediatric medical and surgical subspecialists, and children’s hospitals, which are especially critical for children with special health care needs.

Families deserve peace of mind knowing that they will be able to access the care and support services their children rely on to be healthy.

Currently in Alabama, 157,000 children are covered by CHIP, known as ALL Kids in our state. With state budgets already set for the coming year, states are counting on CHIP to continue in its current form. Changes to CHIP’s structure – including changes to the Maintenance of Effort or the enhanced CHIP matching rate – would cause significant disruption in children’s coverage and leave states with critical shortfalls in their budgets. Given CHIP’s track record of success, changes to CHIP that would cause harm to children must not be made. In Alabama, we would be forced to use funds originally appropriated for Alabama Medicaid to keep children covered on CHIP. So lack of continued funding at its current level would mean a double hit for Alabama!

Today, we stand united in urging you and your colleagues to work together to enact a five-year extension of CHIP funding.  Securing this critical source of coverage for children and pregnant women into the future is an important opportunity for meaningful, bipartisan action to honor CHIP’s 20 years of success.

Thank you for all you do for our state and the children of Alabama.

 

Sincerely,

Representative Steve Clouse, Chair, House Ways and Means General Fund Committee

Representative Anthony Daniels, House Minority Leader

Representative Nathaniel Ledbetter, House Majority Leader

Representative Mac McCutcheon, Speaker of the House

Representative April Weaver, Chair, House Health Committee

Senator Del Marsh, Senate President Pro Tempore

Senator Jim McClendon, Chair, Senate Health & Human Services Committee

Senator Greg Reed, Senate Majority Leader

Alabama Academy of Family Physicians

Alabama Arise

Alabama Chapter-American Academy of Pediatrics

Alabama Children First

Alabama Hospital Association

Children’s of Alabama

Medical Association of the State of Alabama

UAB Health System

University of South Alabama Health System

VOICES for Alabama’s Children

 

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U.S. Senate Announces 5-Year CHIP Funding Program

U.S. Senate Announces 5-Year CHIP Funding Program

The U.S. Senate Finance Committee reached an estimated $8 billion bipartisan agreement that renews funding for the Children’s Health Insurance Program for five years and phases out the 23 percent Obamacare funding bump. States would have to maintain eligibility through 2019, and after that there would be no so-called maintenance of effort for children of parents with incomes more than 300 percent of the federal poverty level.

While the deal does not include details of how the Congress would pay for the funding extension, the proposed legislation would maintain Obamacare’s 23 percent increase in the federal matching rate to states for 2018 and 2019 and begin to ratchet it down in 2020, according to GOP and Democratic aides. The bump is set at 11.5 percent in 2020 and would be totally eliminated starting in 2021. Amendments to the proposed legislation are expected.

“The Medical Association began working with Alabama’s Congressional Delegation in January when we traveled to Washington, D.C., for the Government Relations Conference,” said Executive Director Mark Jackson. “We wanted to express to them the importance that CHIP funding be renewed and the impact the program has on our residents. We are pleased to see that there is a bi-partisan proposal in the Senate that will keep CHIP funding in place.”

CHIP is authorized through 2019, but funding runs out at the end of September. CHIP covers families with income levels between 138 percent and 405 percent of the federal poverty level. States determine the eligibility levels within those parameters, and the ACA requires that states maintain eligibility levels that were in place as of March 23, 2010. States that reduce eligibility lose federal Medicaid funding. Eligibility levels are capped between 200 percent and 300 percent of poverty in 30 states, and in 19 states eligibility levels are higher than 300 percent of poverty, although those states don’t receive the higher match rate for enrollees above the 300 percent threshold, according to American Action Forum. The Finance deal would let states drop eligibility levels to 300 percent of poverty after 2019.

More than 97 percent of CHIP enrollees have family income of 250 percent of poverty, according to the American Action Forum analysis.

The American Academy of Family Physicians and more than 130 other organizations issued a statement on Sept. 6 calling on legislators to save the CHIP from chaos and families from confusion by extending the program’s funding for five years before it expires on Sept. 30.

“CHIP has a proven track record of providing high-quality, cost-effective coverage for low-income children and pregnant women in working families,” the statement said. “CHIP was a smart, bipartisan solution to a real problem facing American children and families when it was adopted in 1997, and its importance and impact in securing a healthy future for children in low-income families has only increased. As Congress continues to work on larger health system reforms, a primary goal should be to improve health coverage for children, but at a minimum, no child should be left worse off. We urge our nation’s leaders to work together to enact a five-year extension of CHIP funding as an important opportunity for meaningful, bipartisan action.”

Nearly 9 million children whose families could not otherwise afford health insurance have access to health care because of CHIP. The program also enables pregnant women in 19 states to obtain the health care they need to have healthy pregnancies and give birth to healthy infants. Many families covered by the program have incomes too high to qualify for Medicaid.

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