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CBO Says Ten-Year Extension of CHIP is a Saver

January 12, 2018—The Congressional Budget Office (CBO) and the Joint Committee on Taxation (JCT) Jan. 11 released a preliminary estimate that found extending the Children’s Health Insurance Program (CHIP) for ten years would save $6 billion. The score is in marked contrast to a Jan. 5 CBO estimate that found a five-year extension of CHIP would cost $800 million, and an Oct. 20 score that found the program would cost $8 billion over five-years. 

The CBO found that the program saves the federal government money “because the federal costs of the alternatives to providing coverage through CHIP (primarily Medicaid, subsidized coverage in the marketplaces, and employment-based insurance) are larger than the costs of providing coverage through CHIP during that period.” Additionally, CHIP premiums will be less expensive than coverage obtained under the Affordable Care Act (ACA), as premiums under the ACA are expected to rise due to the repeal of the individual mandate.

The updated score is welcome news to advocates of the CHIP program. Federal funding for the program expired at the end of September. The Dec. 21, 2017, continuing resolution (CR) included $2.8 billion stopgap funding for CHIP, meant to expire at the end of March (see Washington Highlights, Dec. 22, 2017). Reports have indicated that states are quickly exhausting the stopgap funding, prompting advocates to continue to push for a long-term reauthorization of CHIP. The AAMC sent a Dec. 19, 2017, letter to House and Senate leadership urging lawmakers to immediately reauthorize and fully fund CHIP for five years.  


Len Marquez
Senior Director, Government Relations
Telephone: 202-862-6281


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Washington Highlights, a weekly electronic newsletter, features brief updates on the latest legislative and regulatory activities affecting medical schools and teaching hospitals.

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