Several federal healthcare programs impacting rural health continue to hang in the balance after lapsing earlier this year. These programs include Medicaid Disproportionate Share Hospital (DSH) payments, community health center funding, and the Children’s Health Insurance Program (CHIP).
On November 3, the House passed a bill that extends funding for CHIP for the next five years, delays scheduled cuts to Medicaid DSH, and extends community health center funding at current levels through 2019. The “CHAMPIONING HEALTHY KIDS Act,” H.R. 3922, passed by a vote of 242 to 174 and is now under consideration in the Senate.
CHIP, in effect since 1997, provides coverage to nearly 9 million children whose families earn too much to qualify for Medicaid but cannot afford private coverage. Federal funding for the program expired on September 30. Without an extension, states are under pressure to make program cuts as their CHIP funding begins to run out as early as next month. Rural areas rely heavily on Medicaid and CHIP.
Delaying DSH cuts another two years would also benefit rural providers, which use the funds to offset their disproportionate share of uninsured patients. DSH reductions have already been scheduled and postponed several times, likely in response to the coverage gap left after the Supreme Court threw out the Patient Protection and Affordable Care Act’s mandatory Medicaid expansion in 2012. In this case, the delay would eliminate scheduled reductions of $2 billion in 2018 and $3 billion in 2019.
Opponents argue the bill pays for the delay now with steeper DSH cuts in the future – $8 billion each year from 2021 through 2025 – that will further threaten safety net hospitals that are already at risk. The bill’s critics also take issue with offsets that reduce funding for the Prevention and Public Health Fund, increase Medicare premiums for wealthier seniors and shorten the ACA’s grace period for missing premium payments, placing vulnerable Americans at risk of losing coverage.
The Senate has not indicated whether it will take up the House-passed bill, which has similarities with bipartisan legislation the Senate Finance Committee has already approved by voice vote. The Senate bill extends CHIP funding but does not address DSH cuts or outline budgetary offsets, and has yet to be considered on the Senate floor. It’s possible the legislation addressed in both bills could be rolled into a year-end package in December.