Federal children's health insurance program to expire

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WASHINGTON — As debates over the future of Obamacare continue in Congress, a federal program that funds health insurance for millions of children nationwide could expire this month.

The children's health insurance program, called CHIP for short, will expire Sept. 30 if Congress does not act to continue it.

In Vermont, money from CHIP goes to support Dr. Dynasaur, Vermont's program that provides health care coverage for children. Vermont's program is also largely funded through Medicaid.

If CHIP is not reauthorized, Vermont would be left with a $22 million hole in the Dr. Dynasaur budget, according to state fiscal experts.

Nationally, 8.9 million children were covered under the CHIP program in fiscal year 2016, according to the National Academy for State Health Policy.

The national program, funded by a combination of federal and state dollars, provides health insurance for children whose families' income is higher than the qualifying level for Medicaid, but who cannot afford private insurance, according to the academy.

Losing federal CHIP funding in Vermont would not mean that children who are currently covered by Dr. Dynasaur would lose their health insurance, but it would leave a budget gap in the program, according to Sarah Clark, a financial officer for the Vermont Agency of Human Services.

So far, neither chamber in Congress has passed legislation to continue the program. However, with time ticking down before the end-of-month deadline, last week there was some movement on the issue in the Senate.

The lead Republican and Democrat senators on the Senate Finance Committee announced Tuesday that they had reached a deal on legislation to extend the insurance program.

The agreement would authorize the program for the next five fiscal years, according to a spokesperson for the committee.

The Senate proposal would gradually step back an increase in the federal contribution to the program that was put in place as part of the Affordable Care Act. Obamacare bumped the federal portion of CHIP funding up by 23 percent.

Over the next two years, the federal contribution would continue to include the 23 percent Affordable Care Act bump in the match rate.

In the third fiscal year, the bump would step down to 11.5 percent for one year. After that, the match rate would go back to the level it was set at before Obamacare.

Sen. Orrin Hatch, R-Utah, chair of the Finance Committee, said the agreement was a "good first start."

"Not only does this proposal provide uninterrupted funding for CHIP, but it also provides certainty and increased flexibility for states to administer the program," he said in a statement.

Hatch said he hopes Congress will move forward "to ensure no lapse in care" for children covered under the program.

The committee's ranking member, Sen. Ron Wyden, D-Ore., also praised the agreement, calling it "a great deal for America's kids."

According to Vermont officials, under the Senate proposal, the state will eventually lose approximately $14 million in federal funding annually when the Obamacare bump to the match rate is discontinued.

The proposal, however, still has a long way to go. Legislative language for the deal has not yet been released, and the bill must win approval from both the Senate and House before the end of the month.

The path forward on the legislation could be complicated by the ongoing efforts by Congressional Republicans to dismantle the Affordable Care Act.

While CHIP is popular across party lines, the reauthorization has been "caught in the undertow of health care politics, especially in the House," according to Rep. Peter Welch, D-Vt.

"It's the politics of health care," Welch said.

The program could be a target for members of Congress who are seeking to "sabotage" Obamacare, he said.

However, with two weeks go before the deadline, Welch said he is "mildly optimistic" that lawmakers will approve legislation to continue the program. Leaders from both parties back the deal in the Senate, which could carry momentum into the House, he said.

If the bill doesn't pass by the Sept. 30 deadline, Congress could pass a temporary extension of the program, he said. There's also a possibility lawmakers won't act before the end of the month.

"Unless we get this done, there's a real jeopardy to the CHIP program," he said.

Elizabeth Hewitt is the criminal justice reporter for VTDigger. She can be contacted at ehewitt@vtdigger.org.

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