Trump is not the first to target CHIP

President Trump on Tuesday proposed a hefty 20 percent cut over the next two fiscal years to the Children’s Health Insurance Program (CHIP) in his budget. Democrats will protest, but they, too, toyed with the idea of eliminating CHIP seven years ago when passing the Affordable Care Act.

In a perfect world, the ACA would have on its own extended coverage to all children in the United States, as their parents got covered through Medicaid expansion and federally subsidized plans. Under ideal conditions, the 2010 health-care law was supposed to fill in all of the country’s health-coverage holes and put an affordable plan within reach of every American.

It was with this best-case scenario in mind that some House Democrats proposed their health-care law eliminating CHIP, thinking that the law’s new marketplaces could provide better coverage for children from low-income families. Some felt that CHIP might be duplicative under the ACA’s coverage scheme.

“Obamacare raises the question of why [CHIP],” said Rodney Whitlock, a former health-care staffer for Sen. Charles E. Grassley (R-Iowa) and vice president at ML Strategies.

Indeed, an early House version of the ACA would have phased out the program at the end of 2013, moving some children into marketplace plans and others into Medicaid. But senators who helped originally pass CHIP in 1997 – most notably Sen. John D. Rockefeller IV (D-W.Va.) — pushed back, ultimately succeeding in retaining the program in the final health-care law.

Fast-forward to now. Low- income children get health insurance from a complicated and overlapping web of programs, including CHIP, Medicaid and Obamacare marketplace plans. Each program has different cost sharing and premium requirements, doctor networks and eligibility standards, which can lead to disparities in coverage.

Yet here’s another reality. It turns out that Obamacare didn’t achieve the coverage gains everyone had hoped for. About two-fifths of states didn’t expand their Medicaid programs. Marketplace enrollment has fallen short of projections. About 28 million Americans remain uncovered.

So while CHIP does overlap with parts of Obamacare, it has continued to play a vital role in getting children covered. Thanks to that program, working in concert with the ACA, the number of uninsured kids has been cut almost in half since 2008. Ninety-five percent of children in the United States now have coverage. About 9 million kids have coverage through CHIP.

This is a success both parties can celebrate. Democrats and Republicans argue over whether adults should be required to purchase health coverage, but there’s near-unanimous consensus that children should be insured. Sen. Orrin G. Hatch (Utah), the top Republican on the Senate Finance Committee, teamed up with Rockefeller to pass CHIP initially and has been a top proponent for it ever since.

Yet Trump took aim at CHIP in the more detailed budget the White House released Tuesday. The budget represents little more than a wish list for the president. But his proposal is notable for two reasons.

First, Trump’s budget assumes Obamacare repeal, in which case CHIP would become even more important for ensuring that children have health coverage. Second, it’s a health-insurance program with wide bipartisan support. There’s been some drama every now and then when Congress had to reauthorize it — such as when President George W. Bush vetoed a bill dramatically expanding it — but lawmakers have been willing overall to keep it going.

There is a “bipartisan desire within the Finance Committee to ensure funding for CHIP is continued and services for vulnerable children is maintained,” said Hatch spokeswoman Julia Lawless. “Chairman Hatch will continue to work with members and the administration to find a viable path forward.”

Trump suggesting CHIP cuts also illustrates a closely held fear of liberals that GOP-backed changes to Medicaid would make it much easier for Congress to cut that program in the future.

CHIP is a block-grant program, meaning the federal government contributes a set amount instead of paying a specific percentage of states’ costs. Many Republicans want to convert Medicaid to a similar program in order to limit federal spending.

But basing Medicaid on block grants could make it a lot easier for Congress to dial back spending on the program in the future when it’s looking for ways to fund other priorities.

“If you cap Medicaid, it turns into a piggy bank and this CHIP proposal really reinforces that,” said Joan Alker of the Georgetown Center for Children and Families.