Blog - As The Healthcare Debate Rages, SCHIP Reauthorization Moves Forward

Everyone is talking about healthcare these days. Meanwhile, the Senate Finance Committee, as a microcosm, is actually playing out the debate.

The State Children’s Health Insurance Program is up for it’s first ever reauthorization and negotiations over its future have been slow and strained. Committee negotiators hoped to have a reauthorization bill out of the committee in June, but they discovered that there were more differences among the members than they realized and they brought formal action on a bill to a halt. Finally, however, it appears that at least an informal compromise has been struck and a legislative proposal is just about ready to move forward. Here’s CongressDaily ($):

>The Senate Finance Committee has agreed to a roughly $35 billion package to reauthorize and expand the State Children’s Health Insurance Program funded almost exclusively by a cigarette tax increase, committee members said today. The bill, which will be released Friday in advance of a markup next Tuesday, also includes language that will phase out adult enrollment in the program to make room for more children. The $35 billion that comes from a 61-cents per pack cigarette tax is short of the $50 billion allotted for SCHIP under the budget resolution, but Sen. Gordon Smith, R-Ore., said the phase-out of adult coverage would allow about 2 million children who are currently eligible but not enrolled in SCHIP to receive benefits. “The compromise that was struck has savings in it because adults are moved off of it so that kids can be moved on to it,” said Smith, who proposed an increase earlier this year from the 39-cent tax on a pack of cigarettes.

SCHIP lets the individual states design their own programs to use the money — they can have an independent program, an expanded Medicaid program, or some combination of the two. Because of this flexibility, the program has expanded over time and 14 states have allowed some adults to be eligible for coverage under SCHIP as well. The Heritage Foundation, a conservative think tank, has the numbers:

>The dynamics of the program set in motion an expansion that has continued for the past 10 years. In 1998, 28 percent of American children were enrolled in either Medicaid or SCHIP. The percentage of all children in SCHIP jumped to 45 percent (or 6.2 million children) by 2005. The program is encompassing persons who are not poor, and in certain cases, are grown adults.
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>State policies have encouraged the trend of adult enrollees. Almost 10 percent of SCHIP enrollees are adults, according to the Government Accounting Office. In Minnesota, for example, 87 percent of those enrolled in 2005 were adults, as were 66 percent of those enrolled in Wisconsin.

The report goes on to say what they really fear: “that many Members of Congress want expansion into higher income families largely because they favor government health insurance over private health insurance as a matter of policy.”

That may be so. What is certain, however, is that while George W. Bush is President, any real increase in SCHIP -even this modest compromise that is $15 billion below what the Democrats wanted - will be impossible. The same CongressDaily article explains that Bush is likely to veto the bill and that he will back a Republican alternative that better reflects their policy preference:

>The White House is preparing a veto announcement because the administration believes the SCHIP expansion is too broad. “If the Democrats insist on this massive expansion of government-run health care, the president’s senior advisers would recommend a veto,” a White House official told CongressDaily today. The White House’s stance on SCHIP is likely to be reflected among conservative Senate Republicans outside the Finance Committee. They are aiming to attach healthcare tax language to the bill for individuals and families to buy their own coverage. Finance Chairman Baucus warned against that move. “Congress has to make sure the successful Children’s Health Insurance Program can help more low-income American kids. Turning to untested proposals, like the president’s tax provisions, could put these children at risk,” he said.