Congress Funds CHIP, Ends Three-Day Shutdown

The healthcare industry breathed a sigh of relief as Congress reached a bipartisan deal to reopen the government and fund CHIP for six more years. 

The Senate reached a solution to end the government shutdown Monday afternoon, approving a continuing resolution (CR) by a 81 to 18 vote.

The House passed a CR last Thursday to keep the government operating through February 16. The revised CR, later approved by the House in a 266 to 159 vote and signed into law by President Donald Trump, keeps the government open through February 8.

Related: Lots of Healthcare on the Congressional Plate in January

Senate Majority Leader Mitch McConnell, R-Ky., secured the necessary support to surpass the 60-vote threshold, by agreeing to take up a bill addressing recipients of the Deferred Action for Child Arrivals, a measure favored by Senate Minority Leader Chuck Schumer, D-N.Y.  

“We will vote today to reopen the government, to continue negotiating a global agreement, with the commitment that, if an agreement is not reached by Feb 8th, the Senate will immediately proceed to consideration of legislation dealing with DACA. The process will be neutral and fair,” Schumer said on the Senate floor before the vote.

Three key healthcare provisions were included in the revised CR, notably a six-year funding extension for the Children’s Health Insurance Program (CHIP) and two-year delays to the implementation of both the medical device tax and “Cadillac tax,” which were introduced through the Affordable Care Act (ACA).

CHIP, which provides health insurance to 9 million low-income children, had not been fully funded since Congress failed to reauthorize its funding by October 1. As part of the CR passed last month, Congress authorized $2.85 billion for CHIP programs across the country though nearly a dozen states are slated to exhaust those funds by the end of February.

This CHIP funding extension represents the longest extension since the program’s inception in 1997.

The CR also delayed two ACA provisions from taking effect: the medical device tax and the “Cadillac tax.” The medical device tax is a 2.3% excise tax on medical device revenues. The tax has a checkered history, first collected from 2014 to 2016, it was halted for a year before collecting again in 2018.

The “Cadillac tax” is an excise tax which applies to high cost employer health benefit plans, a policy which has drawn industry scrutiny, with 50% of health system executives urging for its elimination according to a HealthLeaders Media survey from last year.