CHIP funding expected to pass next week

The GOP tax overhaul's repeal of the individual mandate has unexpectedly saved the Children's Health Insurance Program at the 11th hour—and has added at least a year to the funding extension.

A GOP senior aide told Modern Healthcare CHIP is "very likely" to go as a stand-alone next week, with six years of funding appropriated, even as Republicans and Democrats alike say they'd like to pay for 10 years.

In the Senate, aides were less confident the package can pass as a stand-alone, but Sen. Orrin Hatch (R-Utah) wants to pass as long an extension as possible and Senate Majority Whip John Cornyn (R-Texas) said he would like to see 10 years as well.

However long an extension they land on, lawmakers said, all signs point that CHIP will at the very least get funded in the Jan. 19 continuing budget resolution that Congress needs to pass to avert a government shutdown.

"It's going to happen," said U.S. Rep. Fred Upton (R-Mich.), former chair of the Energy and Commerce Committee. "I have every reason to believe it's going to happen before Friday."

Upton has already notified representatives of the children's hospital in his district and said they're thrilled at the turn of events. "I could walk on water and it doesn't even need to be 20 degrees," he said.

The sudden turnaround for the program's prospects — as states entered panic mode and made contingency plans to close their programs — came from a new analysis by the Congressional Budget Office.

Last Friday, the CBO sent a letter to Sen. Orrin Hatch (R-Utah) that revised the cost estimate for a five-year funding extension down to $800 million. This is $7.5 billion less than the original estimate.

A second analysis, released publicly on Thursday, projects $6 billion in savings if Congress funds the program for 10 years.

After bitter partisan wrangling over how to pay for the authorization has held CHIP hostage for months. The program that covers 8 million low-income children became a political football in inter-party negotiations over immigration and spending caps.

This isn't to say it's all smooth sailing ahead as lawmakers barrel toward next week's budget deadline.

House Energy and Commerce Chair Greg Walden (R-Ore.) said publicly on Thursday he wants six years as the committee's Ranking Democrat Frank Pallone (D-N.J.) griped about the so-called pay-fors that offset the cost of funding CHIP. the provisions in the previous GOP-led package targeted the grace period for Affordable Care Act enrollees as well as the ACA prevention fund.

"I don't want to put a bill on the floor that includes those negative pay-fors," Pallone said. "I want them to be eliminated as much as possible."

It's unclear why the pay-fors would stay in play now that the program extension saves the government money, but there is disagreement over funding CHIP for six years instead of 10 years.

One Energy & Commerce committee member said Walden informed the committee on Wednesday that a 10-year extension could save money and committee members suggested passing the full 10 years as a package.

Leadership aides however said on Thursday that six years is more likely.

Children's healthcare advocates are cheering the news and pushing hard for the full 10 years.

"Congress has a unique opportunity to protect and stabilize the health coverage for the 9 million children that receive care through CHIP while simultaneously reducing the federal deficit by $6 billion in this decade and an estimated $20 billion over two decades," says Bruce Lesley of the Washington-based advocacy group First Focus. "Congress should seize this opportunity, as it would be a win-win for children and both political parties."

While CHIP's odds are looking up, the future of Medicare extenders that are especially key for rural hospitals is still murky.

A senior GOP aide said they're on the table for the Jan. 19 continuing resolution "along with everything else."

Currently delays of certain ACA taxes like the medical device tax and employer mandate aren't getting special attention in discussions either, Rep. Tom Cole (R-Okla.), who heads health appropriations in the House, told reporters.