Senate Finance Committee Issues Report on Keep Kids’ Insurance Dependable, Secure Act
Excerpts of the report follow:
I. LEGISLATIVE BACKGROUND
Background and need for legislative action
The
Funding for CHIP has been reauthorized at four different times since its creation in 1997. Most recently, the Medicare Access and CHIP Reauthorization Act of 2015 provided a two year reauthorization. In statute, FY2017 is the last year a federal CHIP appropriation is provided. While some funds may continue to be spent, new funding for FY2018 expired on
The Keeping Kids' Insurance Dependable and Secure (KIDS) Act of 2017 incorporates funding and policy reauthorizations for a five year continuation of CHIP. On
The KIDS Act (S. 1827) would extend federal CHIP funding through FY2022 and continue the increased enhanced federal medical assistance percentage (E-FMAP) in current law for two years (i.e., through FY2019) and with a phased-down 11.5 percentage point increase in 2020. The bill also includes extensions of other CHIP provisions (e.g., the
II. EXPLANATION OF THE BILL
A. Amends Titles XI, XIX, and XXI of the Social Security Act To Extend Funding for the
SECTION 1:
Present law
None.
Explanation of committee bill provision
Establishes the title of the Act as the "Keep Kids' Insurance Dependable and Secure Act of 2017" or the "KIDS Act of 2017."
SECTION 2: FIVE-YEAR FUNDING EXTENSION OF THE
Present law
The
For FY2016 and FY2017, the annual appropriation amounts were
In even years, such as FY2016, state CHIP allotments are based on each state's federal allotment for the prior year plus any
In odd years, state CHIP allotments are based on each state's spending for the prior year (including federal CHIP payments from the state CHIP allotment,
CHIPRA established the
For FY2009 through FY2017, states with a funding shortfall and CHIP enrollment for children exceeding a state-specific target level shall receive a payment from the
Certain states expanded Medicaid eligibility for children prior to the enactment of CHIP in 1997. Under the qualifying state option, these states are allowed to use their CHIP allotment funds to finance the difference between the Medicaid and CHIP matching rates (i.e., federal medical assistance percentage [FMAP] and E-FMAP rates, respectively) for the cost of children in Medicaid in families with income above 133% of the federal poverty level (FPL). The following 11 states meet the definition:
CHIPRA also created a state plan option for "
Eligibility for Medicaid and CHIP is determined by both federal and state law, whereby states set individual eligibility criteria within federal standards. Under existing maintenance of effort (MOE) provisions, states are required to maintain their Medicaid programs with the same eligibility standards, methodologies, and procedures in place as of
Explanation of committee bill provision
Section 2 would extend federal CHIP funding for five years by adding federal appropriations for FY2018 through FY2022 under SSA Section 2104(a). The funding amounts would be:
The funding for FY2022 would be structured as it was for FY2017, with semiannual appropriations of
This section would authorize CHIP allotments for FY2018 through FY2022 under SSA Section 2104(m), maintaining the allotment formulas for odd- and even-year allotments. It would structure the federal CHIP funding for FY2022 under SSA Section 2104(m)(10) the same as it was structured for FY2015 and FY2017. For FY2022, funding for the first half of the year would be available from SSA Section 2104(a)(25)(A), and from a one-time appropriation continued consistent with current law. Funding for the second half of the year would be provided in SSA Section 2104(a)(25)(B).
The full-year amount for state allotments would be determined according to the even-year formula for CHIP allotments, which means each state's allotment would equal the allotment for the prior year plus any
This section would extend the funding mechanism for the
This section would extend the Medicaid (SSA Section 1902(gg)(2)) and CHIP (SSA Section 2105(d)(3)) MOE requirements for children in families with annual income less than 300% of the federal poverty level for three years from
SECTION 3: EXTENSION OF CERTAIN PROGRAMS AND DEMONSTRATION PROJECTS
Present law
SSA Section 1139A(e), as added by CHIPRA Section 401(a), required the HHS Secretary, in consultation with the CMS Administrator, to conduct a demonstration project to develop a model for reducing childhood obesity by awarding grants to eligible entities (e.g., community-based organizations, federally-qualified health centers, and universities and colleges) to carry out the project.
CHIPRA authorized the appropriation of
SSA Section 1139A authorizes a variety of activities related to pediatric quality measurement and care. Under SSA Section 1139A(a), the HHS Secretary was required to identify and publish an initial core set of pediatric quality measures by no later than
Explanation of committee bill provision
This section would amend SSA Section 1139A(e)(8) to appropriate
SECTION 4: EXTENSION OF OUTREACH AND ENROLLMENT PROGRAM
Present law
CHIPRA Section 201 appropriated (out of funds in the
Explanation of committee bill provision
This section would amend SSA Section 2113 to appropriate
SECTION 5: EXTENSION AND REDUCTION OF ADDITIONAL FEDERAL FINANCIAL PARTICIPATION FOR CHIP
Present law
The federal government's share of CHIP expenditures (including both services and administration) is determined by the E-FMAP rate. The E-FMAP rate is derived each year by the HHS Secretary using a set formula, and it varies by state. By statute, the E-FMAP (or federal matching rate) can range from 65% to 85%.
The ACA included a provision to increase the E-FMAP rate by 23 percentage points (not to exceed 100%) for most CHIP expenditures from FY2016 through FY2019. This increases the statutory range of the E-FMAP rate to 88% through 100%. In FY2017, the E-FMAP rates ranged from 88% (13 states) to 100% (12 states).
Explanation of committee bill provision
This section would continue the 23 percent increased E-FMAP rate under SSA Section 2105(b) in current law for two years from FY2018 to FY2019. The rate would then decrease compared to the previous year to 11.5 percentage points in FY2020, with no increased E-FMAP in FY2021 and FY2022.
III. BUDGET EFFECTS OF THE BILL
A. Committee Estimates
The Committee adopts as its own the preliminary cost estimate prepared by the Director of the
B. Budget Authority
In compliance with section 308(a)(1) of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344), the Committee states that provisions of the bill as reported involve new or increased budget authority.
C. Consultation With Congressional Budget Office
In accordance with section 403 of the Congressional Budget and Impoundment Control Act of 1974 (P.L. 93-344), the Committee advises that the
U.S.
Hon.
Chairman,
Dear Mr. Chairman: The
If you wish further details on this estimate, we will be pleased to provide them. The CBO staff contact is
Sincerely,
Director.
Enclosure.
S. 1827--Keep Kids' Insurance Dependable and Secure Act of 2017
Summary: S. 1827 would extend federal funding for the
CBO and JCT estimate that, on net, enacting this legislation would increase the deficit by
Pay-as-you-go procedures apply because enacting the legislation would affect direct spending and revenues.
CBO estimates that enacting the legislation would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028.
S. 1827 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act (UMRA).
Estimated cost to the Federal Government: The estimated budgetary effect of S. 1827 is shown in the following table. The costs of this legislation fall within budget function 550 (health).
(TABLE OMITTED)
Basis of estimate: S. 1827 would extend funding for CHIP through 2022, change the federal matching rate in 2020, and extend certain eligibility requirements. CBO and JCT estimate that enacting this legislation would increase federal spending by
Extension of funding
The bill would provide a total of
Second, the increase in spending for CHIP would be partially offset by reductions in the net costs of federal subsidies provided for other forms of health insurance, including Medicaid, insurance purchased through the health insurance marketplaces established under the ACA, and employment-based health insurance. Those reductions would occur because most of the people who would receive coverage through CHIP as a result of enacting S. 1827 would otherwise receive federally subsidized coverage under current law. Specifically, CBO estimates that of the approximately six million children who would be covered by CHIP under S. 1827:
About 40 percent would be covered by Medicaid under current law. Thus, enacting S. 1827 would reduce federal Medicaid spending by
About 25 percent would receive subsidies for private health insurance purchased through the marketplaces under current law. Children in families with income between 138 percent and 400 percent of the poverty guidelines who are not eligible for Medicaid would generally qualify for subsidies to purchase health insurance through the marketplaces if they do not have access to employment-based coverage through a parent. If S. 1827 is enacted, CBO estimates those subsidies would be
About 25 percent would participate in employment-based health insurance under current law, because some parents with offers of family coverage through an employer will choose to enroll their children in such plans. Under S. 1827, CBO and JCT estimate that revenues would be
Fewer than 10 percent would be uninsured under current law and some would be subject to the penalty associated with the individual mandate. Enacting S. 1827 would reduce federal revenues associated with collecting that penalty by less than
Finally, the net cost of the extension is less than the
Federal matching rate
Under current law, a 23 percentage point increase in the CHIP federal matching rate that went into effect in 2016 will expire after 2019. The average matching rate would return to historical levels of about 70 percent beginning in 2020. Under S. 1827, states would receive an 11.5 percentage point increase in the matching rate in 2020 and the matching rate would return to historical levels beginning in 2021. CBO estimates that approximately
Maintenance of eligibility levels requirement
Under current law, states are required to maintain CHIP eligibility levels, methodologies, and procedures as they were on
S. 1827 would mostly extend this requirement through 2022. Instead of the requirement applying to all children, beginning in 2020 it would be limited to children in families with income below 300 percent of the poverty guidelines. It would also apply to children in families with income above 300 percent of the poverty guidelines who do not have access to an offer of employer-sponsored insurance through a family member. (Because the vast majority of children in CHIP are in families with incomes below 300 percent of the poverty guidelines, CBO estimates that continuing this requirement, as modified by S. 1827, would affect at least 98 percent of children who would be enrolled in CHIP if the current requirement were fully extended through 2022.)
CBO expects that more children would enroll in CHIP under S. 1827 because of the extension of the eligibility requirements that are scheduled to expire in 2019. Overall, the cost to the federal government of covering these children in CHIP would be less than the average cost of covering them in the marketplaces and employment-based insurance. As a result, CBO estimates that this provision would reduce the estimated net cost of extending CHIP funding through 2022 by about
Demonstration programs
The bill would provide
Increase in long-term direct spending and deficits: CBO estimates that enacting the legislation would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2028.
Intergovernmental and private-sector impact: S. 1827 contains no intergovernmental or private-sector mandates as defined in UMRA.
IV. VOTES OF THE COMMITTEE
In compliance with paragraph 7(b) of rule XXVI of the Standing Rules of the
V. REGULATORY IMPACT AND OTHER MATTERS
A. Regulatory Impact
Pursuant to paragraph 11(b) of rule XXVI of the Standing Rules of the
Impact on individuals and businesses, personal privacy and paperwork
In carrying out the provisions of the bill, there is no expected imposition of additional administrative requirements or regulatory burdens on individuals or businesses. The provisions of the bill do not impact personal privacy.
B. Unfunded Mandates Statement
The Committee adopts as its own the estimate of federal mandates prepared by the Director of the
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In the opinion of the Committee, it is necessary in order to expedite the business of the
The full text of the report is found at: https://www.congress.gov/congressional-report/115th-congress/senate-report/197/1?r=2
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