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Are Republicans really proposing to cut funding for poor kids’ health insurance?

Marbell Castillo, center, holds her granddaughter Maia Powell, who is insured through the Children's Health Insurance Program. Nurse practitioner Molly Lalonde gives the baby a checkup in Burke, Va. (Matt McClain/The Washington Post)

The Trump administration is asking Congress to approve a $7 billion cut to the Children's Health Insurance Program as part of a package to reduce a range of previously agreed upon federal spending.

Republicans say none of the money being cut was going toward helping children and that their plan would just strike money that has been approved but is not being spent on a specific program. Democrats are accusing Republicans of trying to cut a program that provides health insurance for 9 million children in the United States, many of whom live in poverty.

So, which version is right?

Some of the funds Republicans want to cut aren't going to children right now, but they are funds that could go to children in the future. Specifically, they are set aside as something of a rainy-day fund if the program found itself with more children enrolled than it had funds to support.

The Trump administration is asking Congress to cut about $2 billion from CHIP's special contingency fund, which was created to direct emergency money to the states that administer the program if they run out of funds, said Joan Alker, executive director of the Center for Children and Families at Georgetown University.

The White House wants to cut the other $5 billion from CHIP's “budget authority” — money that the federal government cannot use without additional congressional authorization. As that money was not yet approved to spend, the debate over whether the White House proposals count as “cuts” is mostly focused on the other $2 billion.

But critics say that money provided through the budget authority has been used for other health-care programs. The contingency money, critics of the Trump plan say, is an important backstop.

“This really could be a problem for CHIP,” Alker said. “It sets a very dangerous precedent for the program.”

In 2018, the reserve pool totaled $4.3 billion, according to Alker. The congressional omnibus package approved in March reduced that amount $1.9 billion, and Trump's latest request would reduce the amount of money left available in the contingency fund to about $500 million.

Trump calls on Congress to pull back $15 billion in spending, including on Children’s Health Insurance Program

The fund, set up in 2009, has been used only three times in the last decade — by Michigan, Iowa and Tennessee, according to a report by the Congressional Research Service.

It was expanded under the Affordable Care Act signed by President Barack Obama, but it can be used only when states are facing both underfunded CHIP programs and higher-than-projected levels of enrollment.

Health-care experts say that scenario is unlikely to materialize anytime soon, particularly given the new infusion of cash that Congress approved for CHIP with its 10-year reauthorization of the program this spring, said Robin Rudowitz, associate director for the Program on Medicaid and the Uninsured at the Kaiser Family Foundation.

But the possibility of a state needing to dip into the contingency fund may be higher in the long run, especially if a recession hits and pushes more families to seek public insurance.

A spokesman for the Center on Medicare and Medicaid Services, which administers CHIP, referred questions to Trump's Office of Budget and Management.