About a month ago, during the debate over the Republicans' regressive tax plan, Sen. Orrin Hatch (R-Utah) insisted that Congress would eventually reauthorize the Children's Health Insurance Program. "It's got to be done the right way," the Republican who helped write the CHIP law said, adding, "The reason CHIP's having trouble is because we don't have money anymore."
Even by contemporary standards, it was a bizarre excuse for inaction. Hatch was eager to pass a package of $1.5 trillion tax cuts, which would disproportionately benefit the wealthy and big corporations, but pressed to support a children's health care program at a fraction of the cost, he was convinced "we don't have money anymore."
As it turns out, however, Republican concerns about costs are starting to crumble. Slate noted yesterday, "It turns out ... that lawmakers might be able to extend CHIP for free. In fact, doing so could even save the government some money."
Last week, the Congressional Budget Office estimated that reauthorizing CHIP for 5 years would cost the federal government a mere $800 million. That's quite cheap in the scheme of all federal spending, of course. But today, the CBO sent Capitol Hill staffers an email stating that extending the program for 10 years would actually save $6 billion over the decade, which an aide forwarded to me this afternoon (on the condition of anonymity, which was granted).
The latest CBO report on this is online here (pdf).
I can appreciate why this is counterintuitive. How could it save the government money to extend health care coverage to people? The answer is a little wonky, but it makes sense when you consider the policy details.
Let's say Republicans were to give up on CHIP altogether. They haven't said that, of course, but for the sake of conversation, let's assume that happened. At that point, the kids and their families who currently benefit from CHIP would likely turn to the Affordable Care Act and its individual market.
That wouldn't necessarily be a bad thing, except Donald Trump has taken a series of deliberate steps to push costs higher on the individual market. With that in mind, if CHIP families turned to the private market, they'd receive subsidized insurance through the ACA -- but as the White House makes the ACA more expensive, that means the subsidies would cost the government more money. It's vastly cheaper, the Congressional Budget Office found, to simply reauthorize CHIP.