The House of Representatives voted Friday for a budget bill that “defunds” the Affordable Care Act (aka “ObamaCare”).   That’s not exactly a big surprise since they have now voted more than 40 times to try to repeal or halt the ACA.  However, they are substantially raising the stakes – this week threatening a government shutdown if the health care reform law isn’t derailed, and next week the House plans a vote that holds an increase in the debt ceiling hostage to repealing the ACA.   As Charles Blow wrote in a New York Times column, the House strategy appears to be “delay and defund, and default.” 

What’s also very surprising is that the latest House version of the federal budget for the fiscal year that starts on October 1 doesn’t stop at halting the new health insurance options funded by the ACA. According to a national child advocacy group, First Focus, the House budget would also cut 70% of the funding for the popular Children’s Health Insurance Program (CHIP). If you heard any of the presentations that Dennis Smith made about the ACA while he was the DHS Secretary in the Walker Administration, you might recall that he almost invariably talked about the federal CHIP legislation and held it up as a model of bipartisan cooperation, and I think he was right. But most current members of the House weren’t in office then and have no knowledge of the bipartisan cooperation that occurred in 1997 when Bill Clinton and the GOP 105th Congress passed the original CHIP legislation (and when Tommy Thompson was championing BadgerCare eligibility for children and parents up to 200% of the poverty level).

CHIP has been an extremely effective and popular program. Despite a sharp drop in employer-sponsored insurance over the last decade, CHIP enabled states to significantly reduce the number of uninsured children in low-income working families. As a result, even as the number and percent of adults who are uninsured grew sharply, there has been a significant decline in the percentage of uninsured children. That drop continued during the recession, even though child poverty was rising rapidly.

Some might argue that the federal health care reform law makes the CHIP legislation unneeded, but that argument obviously doesn’t hold any water when the bill defunding CHIP would also defund the ACA. Furthermore, assuming the ACA survives, CHIP will not become less important. It will be at least as important as it has been for a couple of reasons:

• As many more uninsured parents get insurance through the ACA, the coverage of kids in CHIP will increase. Wisconsin is expecting about 35,000 more children to enroll in BadgerCare over the remainder of the current biennium, and we’re counting on CHIP to help fund that.  
• In addition, an ACA provision known as the “family glitch” excludes kids and spouses from eligibility for the new Marketplace subsidies if a parent is offered employer coverage with premiums that cost less than 9.5% of family income (for an employee-only plan), even if the coverage for other family members is unaffordable. CHIP funded programs like BadgerCare fill the gap that the “family glitch” creates in the new Marketplace option.

If CHIP funding is cut, states would no longer be required to maintain their current coverage levels for children, and Wisconsin would probably become one of many states that would roll back its income ceiling for kids coverage. The Congressional Budget Office estimated in 2011 that lifting the “maintenance of effort” requirements for Medicaid and CHIP would cause half the states to eliminate their CHIP programs and the rest to scale them back.

The Senate has made it clear that it won’t approve a bill to defund the ACA, and the President wouldn’t sign such legislation, but that sets up another very problematic Congressional impasse – especially when the House ratchets up its anti-ACA tactics next week, by making defunding of the ACA a condition for raising the debt limit.

Jon Peacock