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Stephanie Pellitt

Policy and Advocacy Associate

Congress Set to Pass Another Funding Extension To Avoid Shutdown

January 18, 2018 | ACA | Children and Youth | Federal Budget | Comments
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For the fourth time in as many months, Congress is faced with another government funding deadline. With a potential shutdown looming, Congress is expected to pass another short-term spending bill today that would keep the government open until mid-February. On the health care front, the spending deal would renew funding for the Children’s Health Insurance Program (CHIP) for six years and delay some Affordable Care Act (ACA) taxes. The stopgap spending bill has passed the House, but faces an uncertain future in the Senate.

With the current government funding set to expire today, House Republican leaders drafted a short-term continuing resolution (CR) that is designed to appease lawmakers on both sides of the aisle. The bill’s health care provisions will be key to winning over needed votes — CHIP to win the support of Democrats, especially in the Senate; and delays in ACA taxes to help keep wary conservatives on board. Notably, the bill does not contain a funding extension for community health centers or renewal of so-called Medicare “extenders.”

There are still a number of complicating factors that could present road blocks for the current version of the CR. The bill cleared one road block Thursday evening when House Freedom Caucus decided to vote for the bill despite concerns that the plan did not boost defense spending sufficiently. On the other side of the aisle, Democrats have said they are committed to blocking any funding bill that does not address immigration, which is not included in the proposed CR.

Among the key provisions in the continuing resolution:

  • Short-Term Government Funding: The bill continues level-funding for the government through Feb. 16.
  • CHIP Extension: The measure extends funding for CHIP through Fiscal Year (FY) 2023, and gradually phases out the ACA’s enhanced federal matching rate. CHIP provides health coverage to 9 million low-income children and families nationwide.
  • ACA Tax Delays: The CR would provide a two-year moratorium on the 2.3-percent excise tax imposed on the sale of medical devices for calendar years (CY) 2018 and 2019. The bill provides for a two-year delay of the excise tax on high-cost employer health coverage (the “Cadillac” tax), meaning the tax would be effective in 2022 rather than 2020. Also, a one-year moratorium on the annual excise tax imposed on health insurers is included for CY 2019, although the tax remains effective in CY 2018.
  • Waiver of “PAYGO” Rules: Lawmakers would avoid automatic sequester cuts that would be imposed in 2019 due to the cost of repealing the ACA taxes under Congressional “pay-as-you-go” rules, also known as PAYGO. If enacted, sequester cuts would impact Medicare, Social Security and other major federal programs.