Add-ons, tight timeline may complicate CHIP funding bill

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Unless funding is extended, all states are expected to exhaust their federal CHIP funds during fiscal year 2018.

Forget repeal and replace. The next big healthcare policy battle in Congress could be over the reauthorization of Children’s Health Insurance Program funding.

Adding one more item to lawmakers’ jam-packed legislative agenda this fall, federal funding for the state portion of the CHIP program expires Sept. 30. Unless funding is extended, all states are expected to exhaust their federal CHIP funds during fiscal year 2018, according to a recent issue brief (PDF) from the Medicaid and CHIP Payment and Access Commission.

“If CHIP funding is not renewed, states will need to make decisions including whether to end separate CHIP, how to finance Medicaid-expansion CHIP with reduced federal spending, and how to provide information to families, providers and plans,” the brief stated.

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Typically, reauthorizing CHIP funding isn’t a controversial issue. Indeed, Senate Finance Committee Chairman Orrin Hatch, R-Utah, and ranking member Ron Wyden, D-Ore.—who plan to hold a hearing on the matter in September—issued a statement earlier this month to reaffirm their “strong, bipartisan support” for the program and a timely CHIP funding extension.

However, there are some factors that may complicate a smooth CHIP funding reauthorization—and they’re enough to have state officials worried.

For one, lawmakers are considering tacking on provisions that could make passing such a bill a more partisan exercise, according to The Wall Street Journal. These could include a repeal of the Affordable Care Act’s medical device and health insurance taxes, cuts to Medicaid, or even an extension of cost-sharing reduction payments to insurers.

And if such controversial provisions are added, lawmakers will have little time to debate them, since the Sept. 30 deadline gives them very little wiggle room. Congress is also tasked with avoiding a government shutdown and raising the debt ceiling this fall, not to mention a time-sensitive effort in the Senate to push through an ACA stabilization measure.

“Usually CHIP doesn’t come down to the wire like this,” Jesse Cross-Call, a senior policy analyst at the Center on Budget and Policy Priorities, told The Hill.

To prepare for the worst-case scenario of dried up CHIP funding, some states have been dialing back their consumer outreach in August, which is usually a key month for coverage renewal or new signups, the article added.