Drastically Reduced Cost Estimate Raises Hopes that CHIP Deal Will be Reached


The Congressional Budget Office has drastically lowered the cost estimate for funding the Children’s Health Insurance Program.  The revised cost estimate makes it likely that lawmakers will find a solution to keeping the program funded going forward.

The program had been a sticking point in budget negotiations but the brighter cost outlook may make finding a funding compromise easier.  The CBO had estimated that the program would cost $8.2 billion over the next 10 years.  Their revised estimate says it would cost only $800 million over the same time period, almost a tenth of the original projection.  Lawmakers must strike a budget deal before January 19 in order to keep the government open.

The CHIP program provides insurance to nearly 9 million low-income children.  Funding for the program expired last fall, but its funding was extended temporarily.  That temporary funding is supposed to last through March, but states have said they could run out of money for the program well before that time.

One of the reasons for the vastly reduced estimate, according to the CBO, may lie in the tax overhaul package that signed last month.  That package eliminated Obamacare’s individual mandate, the health law’s provision that requires every American to purchase health insurance.  Because that elimination is expected to raise cost of the government’s subsidizing of health insurance plans, as well as the cost of health insurance overall, it’s believed that more parents will opt to purchase their children’s health insurance through CHIP instead.

Senator Hatch, Chairman of the Finance Committee, the committee overseeing the negotiations, welcomed the news. “In light of the latest analysis from CBO, nothing should prevent enactment of a…reauthorization before January 19.  Chairman Hatch believes it is time to stop holding CHIP hostage to a caps deal, and will continue to push to get this done to ensure families who rely on CHIP get the care they need,” a spokesperson said.


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