Recently President Trump unveiled his plan to introduce a rescission package to cut $15.4 billion in previously approved spending, which includes $7 billion in cuts to the Children’s Health Insurance Program (CHIP). (Source: Washington Post)

Proposed CHIP Program Cuts

These cuts represent the largest single rescissions request in our country’s history. What’s more, they counter the bi-partisan agreement reached by Congress in February to extend the CHIP program for 10 years. Here in California, these cuts endanger the program more than 2 million children depend on.

The proposed cuts will include:

• $5 billion in cuts to the CHIP Children’s Health Insurance Fund—used to offset costs in cases where state spending is higher than expected
• $2 billion in cuts to the CHIP Child Enrollment Contingency Fund aka “Rainy Day Fund” which assures that states have sufficient funding if they face a higher-than-expected enrollment due to events such as a natural disaster or an economic downturn

Congressional Actions Expected

We expect the House of Representatives to bypass the appropriations process and send the package directly to the House floor for a vote and passage. The situation is more contentious in the Senate since 51 votes are required for passage, and some Senators have already voiced their concerns. At this time, Senate passage is uncertain.

2018 is a critical election year in the state of California. The Governor's seat and all constitutional officer positions are up for election, including the roles of Lieutenant Governor, Attorney General, Secretary of State, and Insurance Commissioner. California will also help decide whether Democrats win back control of the House of Representatives, and all eyes are on critical races in Orange County that will undoubtedly affect this outcome.

On March 23, Congress passed a $1.3 trillion federal omnibus spending bill, which President Trump signed despite a veto threat. The bill secures a two-year extension of 330 funding for community health centers and other health care extenders, and increases health center funding by $335 million. It also provides funding for research on opioid addiction in an effort to combat the national opioid crisis. Unfortunately, the bill does not address DACA or provide measures to stabilize the health insurance markets established by the Affordable Care Act.

Secretary of Health and Human Services, Alex Azar, addressed the Federation of American Hospitals on March 5, and America’s Health Insurance Plans (AHIP) on March 8, regarding the transition to a value-based health system, one of the four priorities outlined during his nomination process.