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Finance Committee Unveils $35 Billion Expansion Of SCHIP Program
Inside CMS - 7/16/2007
Senate Finance Committee leaders late Friday unveiled long-awaited legislation to renew the popular State Children's Health Insurance Program (SCHIP), a proposal that drew stinging criticism from patient advocates who say the $35 billion expansion falls short of the promised intentions of the program.
Though the Democrats' 2008 budget blueprint had set aside $50 billion for SCHIP, senators ultimately agreed on a $35 billion expansion, to be offset primarily with a 61-cent hike in the federal cigarette tax and “proportional increases for other tobacco products,” according to a press release from the committee. The controversial Medicare Advantage (MA) program was spared cuts, not least of all due to opposition from Sen. Orrin Hatch (R-UT), ranking member of the Finance health subcommittee and a fierce defender of MA plans.
The compromise bill allows states to receive the Medicaid matching rate for children who live below 300 percent of poverty, prohibits waivers for additional adults, and gives states the option to use information from food stamps and other initiatives to find and enroll eligible children. The bill would transition childless adults enrolled in the program into Medicaid and place funds for exiting coverage of low-income parents into separate block grants that would be matched at a lower federal rate.
The latest available CMS data show that 700,596 adults were, at some point in 2006, enrolled in the program.
States would also be allowed the option of employing a controversial proof-of-citizenship provision at application or to follow up later to verify legal status through a social security number check.
The bipartisan bill hit an eleventh-hour snag over whether to include pregnant adults under a program that was designed 10 years ago to cater to low-income children from working families not eligible for Medicaid. In the end committee lawmakers agreed to gives states the option to cover pregnant women for prenatal care. Eleven states have prenatal/unborn state plan options with coverage that begins at conception. The states are: Arkansas, California, Illinois, Louisiana, Massachusetts, Michigan, Minnesota, Rhode Island, Texas, Washington and Wisconsin.
The $35 billion would cover approximately 3 million of the nation's 8-9 million uninsured children, according to Senate Finance Committee health subcommittee Chair Jay Rockefeller (D-WV). Some observers, however, criticized the size of the package as insufficient.
“The loss of $15 billion means that one-to-two million children across this nation would lose coverage,” First Focus President Bruce Lesley said in a statement. “Simply put, no child and no family should be left worse off than before this bill was passed, and significant strides must be made to extend health coverage to as many children as possible. Unfortunately, the Senate bill, as offered, fails to meet those tests.”
Lesley said he hopes to work with House lawmakers to improve the package as it works its way through the legislative process.
Baucus' mark would “improve funding” for the applications process. Many states, at one time or another since the program was first approved in 1997, have suspended or curtailed SCHIP outreach and applications because of what is known as the “woodworking effect.” Invariably, as state and private health officials look to enroll children into the program, they find children “coming out of the woodwork” who are eligible for Medicaid, Temporary assistance for Needy Families food stamps and other programs that require state matching funds or are totally funded by the states (see Inside CMS, April 5).
That $35 billion figure might cause problems in the House as well, as the Congressional Black Caucus is poised to protest and propose next week a shorter window of authorization, perhaps two years, if Congress can't meet its $50 billion budget resolution, according to a source close to the caucus.
Finance leaders from both sides of the aisle hailed the compromise as a triumph of epic proportions.
“Working together, my colleagues and I have agreed to take a significant step toward reaching more of the children that Congress meant for this program to serve,” said Finance Committee Chair Max Baucus (D-MT).
Ranking Finance Republican Charles Grassley (IA, said the bill “refocuses SCHIP on low-income children” and employs “appropriate targeted policies.”
“It tries to straighten out the mess created by all the waivers that have spent program resources on adults and higher-income kids,” Grassley said.
The bill will be taken up by the committee Tuesday and Baucus expects the full Senate to address it by month's end. Grassley this week urged the White House to hold off criticizing lawmakers’ plans to expand SCHIP as committee members worked towards a compromise (see related story).
It's unclear how the White House will receive the bill if it should garner enough support to win final passage.
The debate over SCHIP's renewal has become something of an ideological battleground, as supporters of an SCHIP expansion-- mostly Democrats-- have hoped to use the reauthorization as an opportunity to bolster the government's role in the health coverage arena, while Republicans have blasted that move as a giant stride toward a single-payer system. Some Republicans this week vowed to fight to keep the program focused on the population it was designed to serve.
“SCHIP should remain as it was intended, to provide health insurance to children and pregnant mothers who cannot afford health coverage,” Sen. Richard Burr (R-NC, said in a statement. “SCHIP reauthorization presents an opportunity to implement a market-based program that will give consumers more options while using our tax dollars more wisely.”
President Bush has been a major force in the scrum. In two speeches in recent weeks, Bush has railed against the Senate's SCHIP proposal, accusing the authors of going too far to encourage people to leave the private market.
“I strongly object to the government providing incentives for people to leave private medicine, private health care to the public sector,” Bush said Tuesday in Cleveland. “I mean think of it this way: They're going to increase the number of folks eligible through SCHIP; some want to lower the age for Medicare. And then all of a sudden, you begin to see a-- I wouldn't call it a plot, just a strategy-- to get more people to be a part of a federalization of health care.”
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