Congress Prepares To Pass Children's Health Coverage Expansion

Amidst high tension in Congress over the reauthorization of the State Children’s Health Insurance Program (SCHIP), negotiators from the House and Senate reached a general consensus to expand the successful and popular program. In mid-September, congressional leaders agreed on the broad outlines of a compromise reauthorization bill that would make SCHIP available to more children in the United States. SCHIP is the program that provides federal funds to help states offer health insurance coverage for children up to 200 percent of the federal poverty level (about $40,000 per year for a family of four), with some states leading the way to covering all children by increasing those eligibility requirements up to 400 percent of the poverty line. The program, set to expire on September 30, has been the center of heated debate since the reconvening of Congress after the August recess. If the two chambers complete an agreement, as they intend to do and as appears likely, they will pass a bill and send it to the president prior to the deadline. The president has threatened to veto anything resembling either the House or Senate bill.

The House and Senate bills
Earlier this year the House and Senate passed separate bills that would both reauthorize and expand SCHIP for the next five years. Our article in the August 2007 POVERTY ACTION REPORT summarizes the provisions of the two bills.  In broad terms, the Senate’s bill would expand the program by $35 billion over the next five years, funded mostly by increased tobacco taxes. This would cover four million more children. The House would expand the program by $50 billion, funded in large part by reductions in payments to private HMOs under the Medicare program, in addition to a smaller increase in the tobacco tax. This would cover five million more children.  There are substantial differences between the two bills on policy issues, including the formula for payments to states, eligibility for legal immigrant children, the ability of states to expand the program to cover parents, and other issues. In both houses, the bills were negotiated by committee leaders in both parties and supported by Republicans on the floor.

Emerging compromise
Leaders and their staffs in the two chambers have been discussing a compromise bill. Due to the need to cultivate enough support to discourage and possibly override a veto, the talks have leaned toward the less expensive Senate version ($35 billion increase over five years, four million more kids covered) and the less controversial Senate financing mechanism (without the cut in Medicare payments to HMOs). The talks are now concentrating on how much of the House’s policy provisions will be acceptable to the Senate.

New data undermine president’s basis for veto
The Kaiser Family Fund published a new paper analyzing the recently released census data on health insurance. " Coauthored by John Holahan and Allison Cook of the Urban Institute's Health Policy Center, “What Happened to the Insurance Coverage of Children and Adults in 2006?” reveals that there are a million more uninsured children over the last two years, and over 700,000 in the last year alone. Almost half of the newly uninsured children were in the lower middle-income group between 200 percent and 399 percent of the federal poverty level ($40,000 to $80,000 per year for a family of four). This is the group targeted by the proposed SCHIP expansion in the bill Congress is crafting.  Moreover, all of this increase in uninsured children is attributable to loss of insurance in the private and employer-supported market, as Medicaid and SCHIP coverage held even.

President Bush opposes an expansion of government-assisted insurance for children on the grounds that it is government-assisted. He prefers to rely on the private-sector market forces to produce coverage for children. The Kaiser report shows that it is the private sector that is failing children. Only government-assisted insurance is keeping more children from being uninsured. The president is undeterred by these facts—his ideology trumps them so far—and his solution is to shrug and say that uninsured children can go to emergency rooms. This ignores the value of preventive care, early diagnosis and treatment, and developmental monitoring for children. It also ignores the impact of uncompensated emergency room care on everyone else’s insurance premiums. 

It is important for all concerned with health care for children to impress on their congressional delegation the need to support the compromise SCHIP bill with a substantial majority and to override any veto.