House Bill Sets the Stage to Reauthorize Key Safety-Net Programs

November 7, 2017

By not acting before October 1 of this year, Congress allowed two critical health care safety net programs to expire. The Children’s Health Insurance Program (CHIP) provides health coverage for low- and moderate-income children and pregnant women. The federal 330 Health Center Grant Program provides annual grants to community health centers for health care services provided to uninsured and underserved populations. (See earlier ITUP blog for more information about these programs.)

CHIP funds coverage for more than 8.4 million children and pregnant women nationwide, including approximately two million moms and kids in California. Federal funds support 88 percent of the cost of CHIP in California. According to current estimates, California will run out of CHIP funding in December or early January.

More than 1,200 federally funded CHCs provide care annually to 6.2 million people – 1 out of every 7 Californians – regardless of patient ability to pay. Approximately, 70 percent of federal 330 health center grants (approximately $300 million in California) is at risk unless Congress acts. According to the Congressional Research Service, 330 grants cover on average one-fifth of an average health center’s operating costs.

On Friday, November 3, the U.S. House of Representatives passed the “Championing Healthy Kids Act” which reauthorizes CHIP and appropriates 330 grant funding for community health centers. Funding for both CHIP and health centers has traditionally garnered strong bipartisan support. However, Friday’s vote was split (242-174), with most Democrats voting no, because Democrats objected to the spending offsets in the bill. The House bill reduces the Prevention and Public Health Fund created by the Affordable Care Act (ACA) and increases cost-sharing for Medicare beneficiaries with incomes above $500,000. (See ITUP’s fact sheet on the bill here.)

The failure to find a bipartisan solution for two programs that have historically had broad bipartisan support reflects the growing polarization in Congress. Without a resolution to the current lapse in funding for CHIP, states may need to reduce coverage and/or benefits to children and pregnant women. Although health centers will by mission continue to serve the uninsured, the dramatic reduction in federal funds could result in site closures and overall reduced health center capacity.

As the urgency grows, the search for a bipartisan compromise for these critical programs now moves to the U.S. Senate, where 60 votes are necessary to pass legislation to restore CHIP and health center funding. Stay tuned!