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Children's Insurance Program Receives Only Patchwork Funding

woman holds child
U.S. Navy
The Florida Channel
Leon County Judge John Cooper on June 30, 2022, in a screen grab from The Florida Channel.

Congress again failed to approve long-term funds for a popular program that provides health insurance for nearly 9 million low-income children, leaving each party blaming the other for Christmas-season gridlock and states scrambling to decide how to parcel out dwindling money.

Lawmakers scurrying to leave the Capitol for the holidays approved a short-term patch Thursday designed to keep state programs operating through March, though some Republicans said federal officials think the money would run out by early February. The money was part of a bill averting a weekend federal shutdown. Congress had approved a previous stopgap solution for the children's health program that was about to expire.

Democrats and Republicans agree that finances for the Children's Health Insurance Program should be renewed for five years, but they've clashed over how to pay for it. And while few think Congress would blunder into letting the money completely lapse — which no lawmaker would care to defend with elections approaching — an effort to provide long-term money collapsed as leaders punted a bunch of unresolved issues until early next year.

"What GOP is obsessed with: Ramming through tax cuts for the rich and powerful," tweeted Sen. Jeff Merkley, D-Ore., referring to the $1.5 trillion tax bill Congress approved this week. "What GOP completely ignores: Extending #CHIP - health care for our children."

"We would love to pass it. They won't let us," Senate Majority Leader Mitch McConnell, R-Ky., said in an interview, asserting that Democrats had blocked a multiyear extension.

As the issue slipped into next year, the two top senators on the issue — Senate Finance Committee Chairman Orrin Hatch, R-Utah, and top committee Democrat Ron Wyden of Oregon — issued a statement promising to seek a five-year extension soon.

"We will be vigilant to ensure this program isn't subject to repeated short-term fixes and constantly looming deadlines — families across the nation deserve better," they said.

With no long-term funding agreement imminent, growing numbers of states have begun edging toward depleting their federal funds and commencing steps to cope with that. According to a survey the nonpartisan Kaiser Family Foundation conducted in November and released this month, 14 states were planning to end or phase out coverage for children, including five by the end of January.

A separate study by Georgetown University's Center for Children and Families estimated that without the money from Thursday's short-term extension, 25 states would run out of money by the end of January, with 1.9 million children potentially losing coverage.

It remained uncertain how those states and others would react to the latest infusion of federal money.

But Alabama recently warned it would stop registering new beneficiaries on Jan. 1 and halt the entire program a month later. Connecticut cautioned it would stop supporting families after Jan. 31, and Colorado has sent letters to recipients warning that their coverage may be canceled.

"We're just hoping Congress does the right thing and doesn't put politics in front of people's health, in front of children's health, in front of pregnant women's health," said Colorado Lt. Gov. Donna Lynne, a Democrat.

Although Congress has stepped in and provided eleventh-hour money twice in recent months, the will-they-or-won't-they drama has put pressure on state officials about how to respond. They say they need lead time to keep recipients abreast of the status of their assistance and to adjust their programs if there's a chance state allotments might change.

Kelly Haight, spokeswoman for North Carolina's health department, said the state's 220,000 children receiving assistance under the program "will not experience any interruption in benefits at this time" because the state had enough money for the beginning of 2018. She said officials were "considering all our options" for possibly losing federal funds.

Federal taxpayers paid about $16 billion for the program last year, with states adding a smaller share, according to government figures. The program is aimed at children from families with incomes too high to qualify for Medicaid, the health insurance program.

The House approved GOP legislation in November extending the health insurance program's federal money for five years. Most Democrats voted no, saying they opposed plans to finance the extension in part by cutting a public health program created under President Barack Obama's 2010 health care law.

The Senate Finance Committee easily approved its own five-year measure in October, but that bill lacked offsetting savings to pay for the extra money. One Democratic aide said top lawmakers of both parties had subsequently quietly agreed to a package of savings.

But as Congress rushed Thursday to pass short-term pending legislation preventing a weekend federal shutdown and leave town for the holidays, unsettled disputes over health care, immigration and other issues fell by the wayside for lawmakers to address next year.

Instead, the short-term bill includes $2.9 billion for states to use for children's health plus authority for federal officials to continue distributing unspent program money to states running short.