Plan to Fund Healthcare for Children, Community Clinics Comes at a Cost

Partisan battle erupts over funding CHIP, FQHCs with money from Obamacare

Children's Health Insurance Plan CHIP
Congress advanced a proposal to continue federal funding for children’s healthcare and community clinics — two popular bipartisan programs that lost critical support this fall — using dollars now committed to other national healthcare programs.

The Republican-led plan, approved by the U.S. House of Representatives Friday along partisan lines, would provide some $100 billion over five years for the Children’s Health Insurance Program, which covers some 9 million kids nationwide, including 112,000 in New Jersey. Support for this program lapsed at the end of September.

The measure, which has yet to pass the U.S. Senate as drafted, would also extend funding for two years to Federally Qualified Health Centers, the network of low-cost clinics — with some two-dozen in the Garden State — that treats 23 million Americans. One federal funding stream for these facilities was cut by 70 percent on October 1.

Diverting funds from Obamacare

But the proposal sparked outrage among Democrats over where it would get the money: by cutting aspects of the federal Affordable Care Act, or Obamacare, that provide a grace period for marketplace customers late with premium payments and support public-health measures. The measure would also charge Medicare members who earn more than $500,000 higher premiums for gap plans.

“It’s sabotaging the Affordable Care Act,” said U.S. Rep. Frank Pallone (D-NJ), who led the fight against the measure in one key committee on Friday. While Republicans had in the past fought to eliminate the 2010 law entirely, Pallone said, “We are now seeing what I would call piecemeal repeal.”

“What’s really going on is robbing Peter to pay Paul,” Pallone added.

Pallone was joined by New Jersey’s other six Democratic House members in voting against the bill; the five Republicans voted in favor. U.S. Rep. Leonard Lance (R-NJ), who serves on the committee with Pallone, said it was important to continue funding for these critical safety-net programs.

“One of the first votes I cast in Congress was for CHIP — creating a fiscally responsible health program” that serves millions of American children, Lance said. “And I continue to support community health centers and the work they do for underserved areas like Dover and Somerville, New Jersey.”

Not likely to pass Senate

The Senate approved a different version of a funding bill for CHIP and the FQHC’s last month, but did not specify where the money would come from. That body will now consider the House version, which observers said is unlikely to pass the Senate as written.

While CHIP, which essentially extended Medicaid to more children and pregnant women when created more than two decades go, costs more than $14 billion annually, about two-thirds of which is granted by the federal government to states on an annual basis. Since the funding stream has not been renewed, states are using the balance of their funds and any excess to continue providing services for these patients.

New Jersey, which launched its CHIP program under former Republican Gov. Christie Whitman, spent close to $519 million on this program in fiscal year 2017, including $456 million from federal funds. Officials said there is enough remaining to continue this coverage through next spring, even if federal officials don’t replenish the fund.

The FQHC program has also had bipartisan support over the years — and federal funding — until federal budget negotiations in 2015 led Congress to plan a funding cut that would take effect in 2017. While the federal money is only one of several revenue streams for these facilities, experts expect it could lead to a 10 percent to 20 percent budget cut for some operations and could force as many as 2,000 sites to close nationwide.