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Congress moves toward funding lapsed federal children's health insurance program, House eyes Medicare hike for higher earners

  • Congress failed to reauthorize the Children's Health Insurance Program by the Sept. 30 deadline.
  • While states have reserves of CHIP funds they are drawing on now, 10 states will begin to run out of that money in the next two months.
  • Two congressional committees are scheduled to start marking up bills that would reauthorize CHIP on Wednesday.
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Congress already blew one deadline for reauthorizing the federal Children's Health Insurance Program. Now it's trying to not blow through another looming one.

Two committees — one in the Senate, the other in the House — are set Wednesday to begin marking up bills that would continue funding for CHIP.

The House bill would, among other things, help pay for the extension of CHIP funding by charging senior citizens who earn more than $500,000 annually higher premiums than lower-earning people for Medicare.

The meetings come after Congress failed by last Saturday's deadline to reauthorize spending for CHIP, which provides health coverage to kids whose families earn too much to qualify for Medicaid coverage.

Although that deadline passed, individual states have enough money in reserves from CHIP to continue providing coverage for nearly 9 million or so children — at least for a short while.

"On November 1, we're going to start seeing some very serious consequences for a number of states," said Joan Alker, executive director of the Center for Children and Families at Georgetown University.

"They really have to get this done within the next few weeks."

Ten states, primarily in the western United States, are projected to run out of CHIP funds in the next two months, according to CCF and the Kaiser Family Foundation.

Congress' failure to pass CHIP funding may have been partly or largely due to the failed effort by Senate Republican leaders in the last weeks of September to pass a last-ditch bill that would have repealed and replaced key parts of the Affordable Care Act.

The deadline for that repeal bill was also last Saturday. While GOP leaders ultimately did not bother holding a vote on it because it would have been defeated, Democrats have blamed the repeal effort for delaying passing legislation to fund CHIP.

Alker said "it's unfortunate" that Congress "is acting so late that they have to move everything so quickly" on bills that would continue to fund CHIP.

But, Alker also said "we're encouraged" by the introduction of the House's Energy and Commerce bill on Monday night that would extend CHIP.

"This is some good news," she said.

Alker noted that the overall policy goal in that bill "very closely mirrors the bipartisan agreement within the Senate" on CHIP funding.

The Washington Post noted late Monday that the Senate's bill, which is going through the Finance Committee, has avoided for now the "sticky issue of how to pay for" two years of extra CHIP funding.

But the House's bill, which the Energy and Commerce Committee released Monday, calls for a series of measures to fund CHIP.

Those include the higher Medicare premium rates for wealthier people, allowing states to take Medicaid coverage away from people who win a lottery, and reducing the amount of time that Obamacare customers can avoid losing coverage once they stop paying their monthly premium. Those measures are projected to generate more than $11 billion in funds.

Another almost $10 billion is projected to come from shifting money set aside for Obamacare's prevention and public health fund to community health centers, and from changes that would help state Medicaid programs avoid medical costs from people who have health coverage from other sources.

Alker said, "To get CHIP done quickly, which needs to happen, [Congress] needs bipartisan agreement."

She said that while there is such agreement on the overall goal of continuing to fund CHIP, there may not be such cross-party agreement on some of the ways to pay for that funding as detailed in the House bill.

However, that bill could be changed in coming days as members of the Democratic minority in the House weigh in.

"I'm cautiously optimistic," Alker said when asked if she expected a bill to be passed relatively soon.