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This SCHIP is Going Nowhere

September 5, 2007 - by Donny Shaw

The bill to reauthorize the State Children’s Health Insurance Program (SCHIP) is in a stalemate. Even though the bill is under a veto threat, supporters of reauthorizing and expanding the program were hoping to strike a compromise between the Senate and House versions that would either block a veto or dissuade President Bush from actually using one. At the center of the debate in Congress is a controversial Medicare reform provision that Democrats in the House are insisting must remain intact.

Subscription-only CongressDaily reports:

>House leaders and the chief architects of a House children’s healthcare bill held firm Wednesday, insisting that the measure retain Medicare portions that are not included in a smaller Senate package.
>"We feel very strongly that we want to keep the package together with Medicare reform," said Ways and Means Chairman Rangel (pictured right), adding that he and Energy and Commerce Chairman Dingell are walking in lockstep with that opinion.
>Committee members and House leaders huddled Wednesday afternoon in Speaker Pelosi’s office to attempt to come to a decision about how to handle requests from the Senate for preconference assurances to limit the scope of the conference report.
>Emerging from the meeting, Majority Leader Hoyer said Pelosi would convey to Senate Majority Leader Reid the need to keep the Medicare components of the House bill in a conference report.
>"The tenor of the meeting was, and I think the speaker will stress this with Mr. Reid, the House feels very strongly that the package works together for a lot of objectives that we all should be able to agree on," Hoyer said. “We worked very hard on a lot of component parts that all work together.”

The problem is that, while expanding SCHIP is a fairly popular proposal among Republicans, the Medicare reform provision has virtually no Republican support. Case in point: in the Senate, where Democrats hold a tiny one-vote majority, their SCHIP reauthorization bill, which does not contain the Medicare provision, passed with a veto-proof two-thirds majority. And in the House of Representatives, where Democrats hold a robust 31-vote majority, the bill passed close to party lines and far short of a veto-proof majority — in large part because of the Medicare provision.

So what is the Medicare provision? Blogger Ezra Klein’s got the most succinct description I’ve seen:

>Back in 1982, Congress tried to unleash the magic of the free market by letting private insurers offer Medicare plans for seniors who wanted them. The insurers would be paid at the same rates as Medicare and, if they were indeed more efficient, could then offer more expansive benefits and out-compete the public program.
>They were not more efficient. But they’ve been very good at lobbying Republican Congresses. And so now, the government is paying these private plans about 120 percent of what Medicare gets per patient. In other words, the government is overpaying these plans in order to help them out-compete the public plan — which they’re still not doing. It’s an almost hilariously absurd state of affairs, were it not actually costing us all a lot of money.

The House’s version of the SCHIP bill proposes paying for an expansion of the program, in part, by rolling back these payments to Medicare advantage. They are also advocating a larger expansion of SCHIP than the Senate is. For more background on the Medicare advantage program, check out the Heritage Foundation’s “The Facts.” If you want a more neutral overview, try Wikipedia — of course, if that’s still not to your liking, there’s always Conservapedia’s entry.

The most likely scenario is that SCHIP will be temporarily extended at its current funding level until the House and Senate, and then Congress and the President, can strike a deal. And don’t forget, even at that point, President Bush still has a plan for blocking Congress’s proposal from ever actually taking effect.

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