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Children’s health insurance has become a political hostage

The real reason CHIP is still unfunded, four months later.

Alex Wong/Getty Images
Dylan Scott covers health care for Vox. He has reported on health policy for more than 10 years, writing for Governing magazine, Talking Points Memo and STAT before joining Vox in 2017.

The Children’s Health Insurance Program is enduring an unprecedented crisis: More than 100 days ago, funding for a program that covers 9 million kids technically expired. Republicans in Congress haven’t rushed to extend it long-term — not until they could get something in return.

CHIP is ostensibly among the most popular, most bipartisan parts of the social safety net, with proven benefits for children’s health and the financial well-being of their families. A Kaiser Family Foundation poll in November found extending its funding was the American public’s top legislative priority.

But it has been left to twist in the wind while families receive “devastating” letters from their states about the program’s possible end. CHIP funding was expiring at the end of September, but Republicans set it aside that month to pursue a last-ditch run at repealing Obamacare. Then in November, the House passed a CHIP extension, which would have cut Medicare and Obamacare funding to appease their most conservative members and cover the then-$8 billion price tag. Now, after the repeal of Obamacare’s individual mandate in the Republican tax bill, Congress could extend CHIP for a full six years at no cost to the government — and it would in fact save the government money if they extended it further.

So Republicans, after months of criticism and a stalemate over how to pay for CHIP, have decided to turn the tables: They attached a six-year CHIP extension to their short-term spending bill in an attempt to deter Democrats from shutting down the federal government this week over the Deferred Action for Childhood Arrivals program, which the two parties still haven’t agree on how to fix.

“The inexcusable delays in extending CHIP ... have brought us to a moment now when the CHIP debate no longer has anything to do with CHIP,” Joan Alker, executive director of Georgetown University’s Center for Children and Families, told me via email. “The policy is long settled, and there are no offsets needed — CHIP has merely become a bargaining chip. This is a very sad state of affairs.”

Interviews with several sources who know the program and the political dynamics around it say what many Republicans will not out loud: Some in their party, particularly archconservatives in the House, have deeply ambivalent feelings about CHIP, and if they are going to extend it, they want spending cuts to Obamacare or Medicare in return, as the CHIP extension that the House muscled through in November did.

“The House has a lot of folks who consider CHIP to be an entitlement,” one Republican health care lobbyist told me. “They’re not doing anything unless we have entitlement reform.”

That helps explain how CHIP, one of the most popular federal programs, which covers millions of US children, became mere leverage in this week’s shutdown showdown.

The problem used to be finding a way to pay for CHIP. New budget estimates say the program is free to extend.

Since CHIP’s funding expired in October, the program has been kept afloat through short-term fixes by the Trump administration and Congress. The House passed a bill to extend the program’s funding for five years in November, but its $8 billion price tag was paid for by cuts to Obamacare and Medicaid, and Democrats balked. The Senate never even took it up, likely because of the partisan spending cuts at its core.

But then Republicans repealed Obamacare’s individual mandate in their tax bill in December. That dramatically lowered the price of extending CHIP, because the alternative to CHIP (Obamacare coverage) was projected to become more expensive.

Now Congress can extend CHIP for six years cost-free. They could even extend it for 10 years, or permanently, and actually save the federal government money while eliminating the possibility that the program could go through another crisis like that of the past four months.

But a lot of Republicans are uncomfortable with that. They say they want an opportunity to come back to the program in later years and maybe change it. They think having an expiration date for CHIP’s funding six years down the road will give them leverage to take another look at the program and whether they want to reform it.

“I’m not for funding something without us having to consider it from time to time,” Sen. John Kennedy (R-LA), who said he does support the six-year CHIP extension, told me Wednesday.

He added, explaining the importance of having those funding deadlines: “So you can review it. So you have leverage. If something’s not being properly managed ... you’ve got leverage to make the bureaucrats fix it.”

Of course, in theory, Congress could change CHIP any time it wanted, even if the program was funded permanently. All they need is to pass regular-order legislation. But Republicans argue, knowing as they do the way that Washington works and leverage works, that having a deadline for its funding that will expire again in six years gives them another opportunity to revisit CHIP — or other pieces of the social safety net.

House Energy and Commerce Chair Greg Walden (R-OR) told reporters that the potential savings from extending CHIP beyond six years could also come in handy down the road if Republicans have other policy priorities that they need to pay for.

“We want to look at the program going forward, because there are some ideas about reforms,” Walden said, explaining why Republicans aren’t proposing a longer extension. He declined to name any specific changes that the majority wants to make.

So a new deadline in six years would theoretically give them leverage, as Kennedy described it to me, for any reforms (read: spending cuts) they might want to propose.

But when you talk to CHIP advocates about this unprecedented crisis, they point out that it is these very funding deadlines that put the program in jeopardy in the first place. Two years ago, Congress passed a short two-year extension that Republican aides at the time said had been timed so the party could revisit it in 2017.

Republicans never did come up with a grand plan to change the program this time around. Instead, CHIP became a bargaining chip, which they are putting on the table now that these government shutdown and DACA talks are in trouble. The majority has become more comfortable using CHIP as leverage — and they will say directly that they want some future opportunity to use it again.

Republicans don’t like to talk about it, but CHIP advocates say that the party has become increasingly uncomfortable with such an overwhelmingly popular entitlement program that actually serves people with higher incomes than the people on Medicaid or food stamps.

“They’re really aware that it would be a valid line of questioning for somebody to ask them: ‘You love CHIP, why do you hate Medicaid?’” one advocate who has followed the debate for years told me. “They’re really not that different, in either their goals or in their structure.”

Republicans are using their leverage on CHIP to avoid an embarrassing government shutdown fiasco

Republicans are sticking with this six-year CHIP extension offer, which they will note (correctly) is the longest extension in the program’s history by one year — but still far less than what Congress could do to avoid any future crises. They’ll even say they want leverage over the program in the future — not unlike the way they are using it now in their shutdown standoff with the Democrats.

Their plan is to attach it to the spending bill that must pass Friday to keep the federal government open. Republicans and Democrats are still at odds over a fix for the DACA immigration program — especially after President Trump’s “shithole” comments — and Democrats have threatened to oppose the spending bill without a solution to DACA.

After four months of criticism from Democrats over the failure to extend CHIP, Republicans are planning to pummel the minority if they hold up the spending bill now that the funding extension is attached to it. Indeed, House Republicans are trying to paint Democrats as heartless politicians who refuse to help children.

“Two times we have voted to move that off this floor, but both items the Democrats have not only said no, they have whipped their members to hold them back,” House Majority Leader Kevin McCarthy told reporters Wednesday. “We have states that are being challenged for their children’s health. This is not a time to play politics.”

Whether it works will be determined in the next few days. I asked two Senate Democrats from Connecticut, one of the states with the most dire CHIP funding situation, if such a bill would win their support. They both demurred.

Democrats are fully aware that Republicans are trying to squeeze them over CHIP and are focusing on their other priorities — disaster relief for Puerto Rico, community health center funding, and, most importantly, the DACA fix — as necessary for their support for the government spending bill.

“They’re talking about six years, which is less than the amount that it should be,” Sen. Richard Blumenthal (D-CT) told me of CHIP. “We have to view all of the elements that are necessary for us to address as parts of what we should approve. They all need to be included.”

(Some CHIP advocates aren’t thrilled with Democrats either over this standoff, but all the ones I talked to place the blame first and foremost on Republicans.)

President Trump also complicated this standoff in a tweet Thursday morning that seemed to undercut the GOP’s gambit, saying that CHIP should not be tied to a short-term spending bill.

Families across the country meanwhile have been left to live in fear that their children’s health insurance could be taken away — and losing faith in CHIP for the long term. The program crossed some kind of Rubicon, in which a supposedly unthinkable scenario — a lapse in funding — has come to pass.

“Expiration was seen as such a cliff that we couldn’t go over it,” the longtime CHIP advocate told me. “Now we’re so far over the cliff, we can’t even see the edge up behind us anymore and we’re still falling.”

“Not only are we in this free fall, the longer you’re in it, the more blasé some policymakers are becoming about it,” this person continued. “There is the lack of appreciation, or simply the fact of really caring, of what the human consequences” could be.

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