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CHIP is finally getting funded — after 114 days without a budget

The Children’s Health Insurance Program may be out of the congressional budget fight for several years.

U. Chicago Medical Students Rally For Children's Health Insurance Program Scott Olson/Getty Images

The Senate is expected to pass Monday a bill extending the Children’s Health Insurance Program for an additional six years, likely ending a funding crisis that has plagued the state-run health plan for the last four months.

Congress let CHIP’s long-term funding lapse 114 days ago. The program became a bargaining chip in larger negotiations over the federal budget and immigration.

But things changed early Monday afternoon, as the Senate began a series of votes to a bill extending the federal budget for an additional three weeks — and CHIP’s budget for an additional six years.

Both the House and the President are expected to support the Senate bill, meaning that CHIP may no longer be part of the congressional budget fight, and that state programs won’t have to worry about running out of money as soon as Monday evening.

Why Congress finally funded the CHIP program

The CHIP program has typically received overwhelming support on Capitol Hill from both sides of the aisle. Unlike the Affordable Care Act — which has polarized legislators since the day it passed — CHIP was created with a bipartisan vote in 1997. At the time, it was championed by Sen. Ted Kennedy (D-MA) and Sen. Orrin Hatch (R-UT).

When its budget came up for re-authorization in late 2017, however, things seemed to be different. The program got caught up in heated political negotiations about the future of some of the most polarizing issues in Congress: Obamacare and immigration policy.

Last fall, Republicans proposed a plan to extend the CHIP program for an additional five years. But that plan included a series of deeply partisan spending cuts to cover the costs of extending CHIP — such as slashing Obamacare programs and Medicare — and Democrats refused to support the bill.

This left the program in budgetary limbo, and the Trump administration scrambling to send emergency funds to the states that were closest to running out of money (all states had some money left over from their last budget to keep running the program, but the amount varied significantly from one to another).

Congress did pass a short-term funding patch for CHIP in late December but that only secured funding through mid-January, creating another funding cliff that collided with the entire federal government’s budget running out.

Republicans proposed a second plan to fund the CHIP program in mid-January: attaching a six-year extension of the CHIP program to a four-week continuing resolution that would fund the rest of the government.

But Democrats initially rejected that plan as well because it did nothing to address the end of the DACA program, which allows unauthorized immigrants who came to the US as children to live and work without the threat of deportation. DACA protections run out by March 5. Senate Democrats insisted that any funding bill would also need to include a deal on the immigration issue as well. This lead to the government shutdown that began Saturday morning.

By Monday morning, however, there was a breakthrough: Senate Democrats agreed to support a three-week budget extension of the federal budget — with the six-year extension of CHIP and with a promise of a vote on a bill to address the status of DACA recipients (the exact language and policy of that bill remain unclear).

What happens next with DACA is still very much up in the air. There may well be another government shutdown in three weeks, if Congress can’t agree on what policies should be used to protect the immigrants the program covers.

But it appears that CHIP will be in a much different place, with its budget secured for an additional six years.

CHIP has cut kids’ uninsured rate in half over the past two decades

CHIP has done what it’s supposed to do since it began 20 years ago: It has dramatically reduced the number of kids who go without health insurance and increased their access to medical services, all at a relatively low price.

Before Congress created CHIP, 14 percent of American children simply went without health insurance. Two decades ago, in 1997, Congress decided this was unacceptable. Republicans and Democrats teamed up to create the program and provide coverage to low- and middle-income children.

The program, quite simply, worked. States quickly saw results. One study of the impact of CHIP in New York “showed that pre-existing racial/ethnic disparities in access, unmet need, and continuity of care among children were virtually eliminated during the year following their enrollment in CHIP,” the Kaiser Family Foundation notes.

Nationally, kids’ uninsured rate has fallen in half since Congress created CHIP (and further since the Affordable Care Act took effect). All the while, the uninsured rate for adults has remained much higher.

Kids on CHIP are more likely to go to the dentist than those who are uninsured. They are less likely to have unmet needs for necessary medical services, like getting prescription eyeglasses or mental health counseling.

One recent government evaluation of CHIP found that kids on CHIP tend to have access to care that is roughly equivalent to that of kids who are on private, employer-sponsored coverage through their parents. And “compared to uninsured children, children enrolled in Medicaid or CHIP have substantially better access to health care services,” the same report found.

CHIP was able to continue operating through budget uncertainty, using funding left over from its last appropriation. But some states that were running especially short on funds did take actions that could discourage enrollment — in late December, for example, Connecticut and Alabama sent letters to thousands of families notifying them that their benefits may run out soon. Connecticut also closed enrollment for one week at the end of 2017, just before Congress provided a short-term injection of funding.