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Who's Telling the Truth About S-CHIP?

August 1, 2007 - by Donny Shaw

During the House and Senate debates to reauthorize the State Children’s Health Insurance Program (S-CHIP) today, Democrats and Republicans called upon distinctly different rhetorical devices. The bill would provide more money for the program than it currently receives — $50 billion more over five years in the House version and $35 billion in the competing Senate version. While congressional Democrats consider this increase an opportunity to provide a healthy start to every child in America, Republicans, led by President Bush, are arguing that it would be a “gigantic step in the direction of what should be called Hillary-care – national socialized medicine.”

As Democratic Representative Lois Capp (CA) points out on the Hill’s Congress Blog, before now, S-CHIP was considered a bipartisan success:

>…historically [S-CHIP] has enjoyed broad bipartisan support. In fact, 43 of our nation’s governors have endorsed the reauthorization of the legislation and expanding coverage to some degree. The same support is found among countless advocacy groups and healthcare organizations like the American Medical Association, AARP, the Campaign for Tobacco Free Kids and the Children’s Defense Fund. In fact, while running for reelection in 2004, President Bush regularly touted his support for the program.

So what has changed? All the new concerns with the bill stem from the increase in funding it proposes. President Bush, who has threated to veto both the House and Senate bills, has requested that the program be reauthorized with an increase of only $1 billion per year — not even enough to sustain the coverage level S-CHIP currently provides. The $35 -$50 billion increase Congress is proposing would cause the program encroach upon the wealthy, so the Republican argument goes. But as the Center for Budget and Policy Priorities points out, the Congressional Budget Office (CBO), a nonpartisan federal agency, has concluded that the vast majority of the increased funding will go towards fulfilling S-CHIP’s current goal:

>Congressional Budget Office estimates show that 4.1 million children who otherwise would be uninsured would have health care coverage by 2012 under the bipartisan children’s health legislation the Senate Finance Committee unveiled July 13. …3.5 million of these 4.1 million children — 85 percent of them — are children with incomes below the current eligibility limits that states have set. Only 600,000 of the 4.1 million children who would otherwise be uninsured are children who would gain SCHIP eligibility as a result of actions by states to broaden the program’s eligibility criteria.

Many Republicans have complained that Congress is trying to provide coverage for adults under the guise of a children’s health care bill. The Heritage Foundation’s Rob Bluey, writing on the Redstate blog, wrote that, “Instead of just renewing the program as it currently exists, big-government liberals want to expend it to include not just kids, but also adults and even wealthy families.”

Currently, nineteen states have been authorized, by the Bush administration none the less, to provide S-CHIP coverage to childless adults and to families that make up to $82,600. Interestingly, Bush complained on July 10th to an audience in Cleveland that Democrats are planning “to expand S-CHIP to include families — some proposals are families making up to $80,000 a year.”

Rather than expand coverage, the Senate bill would put an end to the Administration’s ability to issue wavers to cover adults:

>the Secretary shall not on or after the date of the enactment of the Children’s Health Insurance Program Reauthorization Act of 2007, approve or renew a waiver, experimental, pilot, or demonstration project that would allow funds made available under this title to be used to provide child health assistance or other health benefits coverage to a nonpregnant childless adult.

The House bill has a similar restriction on the administration’s issuance of wavers, although it would allow states to seek wavers after certifying that they have unspent S-CHIP money. That provision reads:

>(d) Limitation on Coverage of Adults- Notwithstanding any other provision of this title, the Secretary may not, through the exercise of any waiver authority on or after January 1, 2008, provide for Federal financial participation to a State under this title for health care services for individuals who are not targeted low-income children or pregnant women unless the Secretary determines that no eligible targeted low-income child in the State would be denied coverage under this title for health care services because of such eligibility. In making such determination, the Secretary must receive assurances that—

>(1) there is no waiting list under this title in the State for targeted low-income children to receive child health assistance under this title; and

>(2) the State has in place an outreach program to reach all targeted low-income children in families with incomes less than 200 percent of the poverty line.

Since some adults have previously been given health care under S-CHIP, the bills have phase-out provisions rather than simply taking their coverage away.

S-CHIP’s strength and popularity comes from the flexibility it gives to the individual states. The federal government leaves it up to the states to decide how the S-CHIP money can be used most effectively for their citizens. But Congress, concerned that states will abuse the program, is proposing new ways to provide them with incentives to stick to the program’s intent without taking away the flexibility. For example, the Senate bill would set aside a certain amount of the appropriated money in an incentive pool that would be redistributed to states based on the progress they make with insuring children below the 200 percent line. So, the proposal props up states that stick with SCHIP’s “initial intent” of insuring poor children and punishes those that try to expand beyond it.

The House will vote on the bill later tonight, while the Senate is expected to do soon Thursday or Friday. The two bills will then go to a joint conference committee to have their differences ironed out before being voted on again and sent to President Bush. As the Senate’s bill is much more a child of compromise, expect many of its features to end up in the final bill.

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