CBO: GOP Tax Bill Lowers the Cost of Extending Children’s Health Insurance Program (CHIP) CBO: GOP Tax Bill Lowers the Cost of Extending Children’s Health Insurance Program (CHIP) – NTK Network

CBO: GOP Tax Bill Lowers the Cost of Extending Children’s Health Insurance Program (CHIP)

The Associated Press calls it counterintuitive, but the GOP tax bill will lower the cost of reauthorizing CHIP, according to the Congressional Budget Office (CBO).

By NTK Staff | 01.09.2018 @12:30pm
CBO: GOP Tax Bill Lowers the Cost of Extending Children’s Health Insurance Program (CHIP)

It may be ‘counterintuitive,’ according to The Associated Press (AP), but the GOP tax bill passed in December will lower the cost of reauthorizing the Children’s Health Insurance Program (CHIP), according to the Congressional Budget Office (CBO).

The AP reported that the cost for five years of reauthorization is 10 percent of what it once projected: $800 million instead of $8.2 billion.

Why?

That’s because ending those [Obamacare individual mandate] penalties is projected to result in fewer healthy people buying coverage on marketplaces, driving premiums higher for remaining consumers. Since government subsidies for people buying policies are linked to premiums, higher premiums mean higher federal costs.

The budget analysts say extending the children’s insurance program will encourage some parents to use that program and not the marketplaces. That would save the government money.

In other words, as Obamacare plan costs go up, parents will cover their children under the less expensive CHIP.

The lower projected cost should make a reauthorization of CHIP easier, but Democrats have balked at any attempts to actually pay for CHIP reauthorization with other, modest spending cuts.

Further, 201 Democrats voted against the continuing resolution in December, which extended CHIP funding through March.

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