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January 23, 2018

CHIP is funded. The government is reopened. But another shutdown could come in 3 weeks.

Daily Briefing

    President Trump on Tuesday signed into law a short-term continuing resolution that fully funds CHIP from fiscal year (FY) 2018 through FY 2023, ending a funding gap for the program that had persisted for more than 100 days.

    In a state of reform: Profiles of state-level health care transformation

    The bill reopened the federal government, which had shut down Saturday after Congress and the president failed to reach an agreement to fund governmental operations.

    However, after negotiations that lasted through Monday, the Senate voted 81-18 to pass a three-week continuing resolution, with an assurance from Senate Majority Leader Mitch McConnell (R-Ky.) that lawmakers would use those three weeks to continue discussions on an immigration bill—a key demand by Democrats. The House shortly after voted 266-150 to pass the new bill, sending it to Trump for his signature.

    Bill details

    p>The spending bill funds the federal government through Feb. 8. The bill also provides about $124 billion for CHIP, funding for which had expired on Oct. 1, forcing some states to take initial steps to end or scale back their programs. The funding is allocated through FY 2023, but after two years the bill will gradually phase out a 23 percentage point funding bump for CHIP provided under the Affordable Care Act (ACA).

    The bill also includes:

    • A two-year suspension of the ACA's medical device tax, which was reinstated on Jan. 1 after previously being delayed;
    • A two-year delay of the ACA's so-called "Cadillac tax" on high-cost employer-sponsored health plans, which was scheduled to take effect in 2020; and
    • A one-year suspension, starting in 2019, of the ACA's health insurer tax.

    However, the short-term spending bill does not address several other health care programs for which funding also expired on Oct. 1, CQ News reports. For example, the measure does not extend funding for community health centers or for Medicare programs known as Medicare extenders.

    The bill also does not include a provision requested by hospital groups to delay $43 billion in scheduled cuts to Medicaid disproportionate share hospital payments called for under the ACA. According to Modern Healthcare, the DSH cuts are not expected to hit hospitals until this summer.

    What's next

    Lawmakers will spend the next three weeks working on both an immigration deal and a long-term spending bill for FY 2018—though it's unclear whether those negotiations will go smoothly, Vox reports.

    According to Modern Healthcare, Sen. Lamar Alexander (R-Tenn.) on Monday predicted lawmakers may need to pass an additional short-term measure before reaching a final deal for the fiscal year. However, other lawmakers, including some Democrats, suggested a broader spending agreement is in reach.

    The negotiations are expected to address some of the lingering issues related to health care programs, including authorizations for the Medicare-Dependent Hospital Program and Low-Volume Adjustment Program that expired Oct. 1, CQ News reports. In addition, Senate Democrats said McConnell had committed to allocating more funding to combat the opioid misuse epidemic as part of the deal to end the government shutdown, Politico's "Pulse" reports.

    According to Vox, lawmakers as part of long-term spending bill would need to reach an agreement on new budget caps for defense and domestic programs—a hurdle that has presented challenges in recent negotiations (Golshan, Vox, 1/22; Wilkie, CNBC, 1/22; Goldstein, Washington Post, 1/22; Costa et al., "PowerPost," Washington Post, 1/23; Rovner, Kaiser Health News, 1/22; Luthi, Modern Healthcare, 1/22; McIntire, CQ News, 1/22 [subscription required]; Diamond, "Pulse," Politico, 1/23; Kliff, Vox, 1/22).

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