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January 29, 2018

Funding the Children’s Health Insurance Program for 10 Years Would Help Fund Other Health Care Programs

Last week, Congress finally did its job and extended the Children’s Health Insurance Program (CHIP) for six years. CHIP funds BadgerCare coverage for more than 100,000 Wisconsin children with working parents. These parents can now rest easier knowing their children’s coverage will be there when they need it.

However, there is still more that Congress can, and should, do. The Congressional Budget Office (CBO) found that renewing CHIP for 10 years would actually save six billion dollars, which is five billion more than the six-year extension that was just approved.

Congress should act to renew CHIP for another four years and use the substantial savings for other programs that kids and families need. Federal lawmakers still haven’t reauthorized several other very important health programs that ran out of funding almost four months ago, including:

All three of these programs have traditionally enjoyed broad bipartisan support, and it’s inexcusable that Congress allowed the funding for each of these programs to lapse nearly four months ago. When Congress reconvenes in early February to act on the next resolution to keep government funded, it should extend the CHIP program by an additional four years. Congress should also use the $5 billion of added savings to partially offset the costs of the other popular and very important health care priorities.

So why does extending CHIP save billions of dollars? The primary reason is surprising: the recently enacted federal tax bill. It significantly changed the fiscal analysis of the CHIP options by driving up the costs of failing to extend CHIP. That’s because the tax bill made changes to the Affordable Care Act (ACA) —also known as Obamacare—that will sharply increase health insurance premiums in the ACA Marketplace. Those premium increases mean people that people who qualify for Marketplace subsidies will receive more help from the federal government to pay their higher insurance premiums. If Congress allowed CHIP coverage to end, many more parents would have to insure their children through the ACA Marketplace and that would substantially raise federal costs.

Renewing CHIP for 10 years would not only save money, it would also give states and families more assurance that kids’ coverage, and the funding that comes along with it, is stable and strong. As we’ve seen over the past few months, the longer we can fund CHIP, the better off Wisconsin kids and families will be.

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