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Funding for the Children's Health Insurance Program expired on October 1, and states will start running out of money soon, putting coverage for 9 million children at risk. Funding for community health centers has also expired. And Puerto Rico will need an infusion of health care funding as the island deals with the devastation after Hurricane Maria.

It sounds like a crisis, and it is — but that doesn't mean Congress will make solving it easy. House Republicans rolled out their proposal for dealing with these pressing health care issues late Monday night, and their offer sets up the next big health care fight in Washington.

On the affirmative side, the House proposal would:

Extend CHIP funding for five years while sunsetting Obamacare's funding boost for the program, much like the existing Senate deal

Extend federal funding for community health centers — which provide primary health care to poor rural and urban areas — for two years

Make an additional $1 billion in Medicaid funding available to Puerto Rico

But the fight won't be about that so much. The fight is going to be about how to pay for it.

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House Republicans have added a slew of controversial provisions to their legislative package. These will be tough for Democrats to swallow and therefore complicate a CHIP funding extension, as any bill would at the very least need Democratic votes in the Senate.

It's a wonky list, to be sure, but the overall picture is clear: Republicans want to pay for CHIP and health center funding by cutting Obamacare and cutting entitlement spending.

The House GOP plan would:

Cut Obamacare's public health fund by $6.4 billion over 10 years

Cut the grace period for Obamacare enrollees who fail to make premium payments. Under current law, enrollees can miss three months of payments without losing their coverage. The House bill would shorten that grace period to one month or allow states to set their own.

Repeal Obamacare's Independent Payment Advisory Board, the controversial panel created by the law tasked with reducing Medicare's costs if the program's spending grows at too fast a rate.

Increase Medicare premiums for high earners (individuals making $500,000 annually)

Aim to cut Medicaid payments for prenatal care and preventive services for children in circumstances when another insurer could instead be liable for the costs

Democrats are going to have a hard time accepting those cuts as the price for keeping a program as popular as CHIP operating. They also view the $1 billion for Puerto Rico's Medicaid as inadequate, given the current crisis, I'm told.

We could end up at an impasse. "While bipartisan negotiations have been ongoing, the legislation offered last night ... is not bipartisan," a Democratic spokesperson told Bloomberg BNA in a statement.

Then again, Republicans are in the majority and still smarting from their failed bid to repeal and replace Obamacare and overhaul Medicaid. They'll want something in return for cooperating with Democrats on health policy, and the public health fund (derided as a slush fund by the GOP) and the unpopular IPAB are obvious targets.

Taking shots at the health care law and pursuing smaller entitlement reforms in this kind of must-pass vehicle is likely to be the norm for the foreseeable future.

CHIP advocates, who were mostly positive, especially given the pressing time concerns, were worried about some of the provisions, such as the attempt to pull back Medicaid payments for prenatal and pediatric care.

Right now Medicaid pays for those services, no questions asked, regardless of whether another insurer might technically be obligated to cover the costs. The GOP plan would instead allow states to withhold payments while they try to ascertain whether another insurer should be on the hook for the bill.

"Obviously it is not a good idea to set up a situation where there may be delays in accessing prenatal care or preventive services kids need," Joan Alker at Georgetown University's Center for Children and Families told me.

It's an inauspicious start, especially with the clock ticking for states' CHIP funding. Up to 10 states are projected to run out of CHIP money by the end of the year, at which point they will have to start cutting benefits and eligibility.

The Senate will have its turn. Over there, Sens. Orrin Hatch (R-UT) and Ron Wyden (D-OR) had struck a deal to extend CHIP, though it had to be put on hold while Republicans took a last run at Obamacare repeal. They had not yet identified how to pay for it, however, which is what has created the controversy in the House proposal.

I'm told the Senate is going to work up its own pay-fors. A bipartisan deal in the upper chamber could jump-start movement, if the House is willing to go along.

So the CHIP saga isn't over, and some explosive new variables have now been added to the mix. Stay tuned.

Chart of the Day

Drop in medical debt in Medicaid expansion states. We have some new evidence on two long-running Obamacare storylines: The divergence between expansion and non-expansion states and the law's impact on medical debt among poor Americans.

Those two issues merge in new research published in Health Affairs, which found that Medicaid expansion states saw a more significant drop in unpaid medical bills for their low-income residents than did the states that refused to expand the program.

Kliff’s Notes

With research help from Caitlin Davis

Today's top news

“GOP gives ground in ObamaCare stabilization talks”: “Republicans are willing to provide insurers with two years of ObamaCare subsidies under a bipartisan market stabilization bill, according to the Senate Health Committee chairman.” —Nathaniel Weixel, the Hill

“Republicans are willing to provide insurers with two years of ObamaCare subsidies under a bipartisan market stabilization bill, according to the Senate Health Committee chairman.” —Nathaniel Weixel, the Hill “House Republicans propose Puerto Rico funding as part of CHIP bill”: “Republicans on a leading House health-care committee are proposing to send $1 billion in extra Medicaid funding to Puerto Rico as it deals with severe hurricane damage, as part of a five-year plan to fund the federal health insurance program for children.” —Paige Winfield Cunningham, Washington Post

“Republicans on a leading House health-care committee are proposing to send $1 billion in extra Medicaid funding to Puerto Rico as it deals with severe hurricane damage, as part of a five-year plan to fund the federal health insurance program for children.” —Paige Winfield Cunningham, Washington Post “New York City and State Battle Over Health-Care Funding”: “New York City and state officials clashed Monday over funding for the city’s public-health system amid looming federal cuts.” —Mara Gay and Mike Vilensky, Wall Street Journal

Analysis and longer reads

“Health experts urge NIH to renew gun research funding after Las Vegas shooting”: “In the wake of the Las Vegas concert shooting, the deadliest mass shooting in recent American history, health experts are urging the National Institutes of Health to renew funding for gun violence research that expired earlier this year.” —Max Blau, STAT

“In the wake of the Las Vegas concert shooting, the deadliest mass shooting in recent American history, health experts are urging the National Institutes of Health to renew funding for gun violence research that expired earlier this year.” —Max Blau, STAT “5 Takeaways From Congress’ Failure To Extend Funding For Children’s Coverage”: “CHIP has been in this fix only one other time since it was established in 1997. In 2007, CHIP went weeks without funding authorization from Congress. Here’s a quick look at what may lie ahead for the program.” —Phil Galewitz, Kaiser Health News

“CHIP has been in this fix only one other time since it was established in 1997. In 2007, CHIP went weeks without funding authorization from Congress. Here’s a quick look at what may lie ahead for the program.” —Phil Galewitz, Kaiser Health News “Rural Hospitals Are Dying and Pregnant Women Are Paying the Price”: “A recent study by researchers at the University of Minnesota found that more than half of the nation’s rural counties no longer have hospital obstetric services, and 9 percent of them lost those services between 2004 and 2014.” —Lisa Rab, Politico

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