Controversy brewing around the unpopular Medicare sequester has complicated the bitter battle over funding for the Children's Health Insurance Program. Healthcare lobbyists are crying foul over House GOP leaders' push to extend the Budget Control Act's 2% payment cut to Medicare providers in order to lift spending caps, including for defense.
But Rep. Greg Walden (R-Ore.), who chairs the House Energy & Commerce Committee, which has jurisdiction over healthcare, said leaders are still negotiating where they want the sequester savings to go—whether to spending caps or specifically to CHIP and Medicare extenders, which are Medicare provisions that must to be regularly renewed by Congress.
Walden and Republicans on his committee passed a CHIP and extender funding bill along party lines that would use other health funding, including the Affordable Care Act prevention fund and Medicare means testing, as budget offsets.
Sequester funds "are all part of the discussion for pay-fors," Walden said, but declined to weigh in on what he thinks Republicans should do with the sequester.
Since 2011, the Budget Control Act sequestration has led to $123 billion in Medicare provider cuts through 2021—including about $49 billion from 2013 through 2017. The sequester is supposed to continue through 2025, and GOP leaders want to add two more years as lawmakers struggle to come to a budget deal even for the short term. The healthcare industry wants Congress to end it and argues that if the cuts continue, they need to go toward crucial health programs. The original Budget Control Act of 2011 was supposed to spur a congressional "super committee" to come up with an alternative path to $1.2 trillion in deficit savings.
"If you use the Medicare sequester, it should be used to pay for health, not missiles," a hospital lobbyist said. "So we were hopeful they first would wipe it away. And if not, that they would use it as the primary offset to pay for rural extenders. We still hold out hope they will use part of (the sequester) for that."
The sequester fight only adds to the drama swirling around CHIP as the funding fight forces states into potential eleventh-hour decisions to end their children's health programs.
Last week, Colorado health officials delivered the news to tens of thousands of households that funding for its Child Health Plan Plus is about to dry up, and with it coverage for children and pregnant women. Alabama's CHIP, which enrolls 83,000 children, would have to shut down early next year if Congress doesn't act before January, cautioned Suzanne Respess, vice president of government relations at Children's Hospital of Alabama. And Minnesota is already tapping into its general fund for CHIP coverage, according to the Minnesota Department of Human Services.
An edited version of this story can also be found in Modern Healthcare's Dec. 4 print edition.
