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Commentary on the State Children's Health Insurance Program

By Beth Wellington, Published on September 28, 2007

Healthcare is on everybody's mind these days. Michael Moore's Sicko, released June 29, 2007, recounts the healthcare horror stories of not just of the 47 million Americans who don't have insurance. Even for those who of us who do, this Consumer Reports survey published in September 2007 found that:

Governing Magazine's June 2007 issue included "Gimme Coverage: The landmark law passed last year in Massachusetts has led many more states to take a shot at universal health insurance." In it, Alan Greenblatt contrasts state efforts to provide health care coverage with inaction at the federal level. Here action has been limited to the goal of passing a reauthorization and expansion of the State Children's Health Insurance Program (SCHIP) before it expires September 30, 2007.

And even that modest goal is in danger. A September 6, 2007 article in the New England Journal of Medicine, "The Battle over SCHIP" by John K. Iglehart looks at efforts to stand up to Bush's threatened veto of the reauthorization on the grounds that it would expand public coverage. This is an argument the Center on Budget and Policy Priorities refutes.

The House passed Rep. John Dingell's (D-MI) H.R. 976 as amended by the Committee on Ways and Means (H. Rept. 110-14) on February 16, 2007 under a motion to suspend the rules by a vote of 360 - 45 (Roll no. 102, Congressional Record: H1854-1855 ). The Senate did not take up the bill until July 31, 2007 - after a motion to proceed was withdrawn on July 26 and a cloture vote on a second motion to proceed was passed on July 30.

Senator Max Baucus' (D-MT) amendment in the nature of a substitute, S. AMDT. 2530, the Children's Health Insurance Program Reauthorization Act of 2007, passed 68 - 31 with support of 18 Republicans on August 2, 2007 (Vote Number: 307) under the final title of "A bill to amend title XXI of the Social Security Act to reauthorize the State Children's Health Insurance Program, and for other purposes." S.AMDT.2602 sponsored by John Kerry (D-MA), to provide sufficient funding and incentives to increase the enrollment of uninsured children, was defeated 36 - 60 (Vote Number: 292).

S. AMDT. 2599 submitted and withdrawn by Mitch McConnell (R-KY) oddly expressed the sense of the Senate that Judge Leslie Southwick should receive a vote by the full Senate. Another amendment which almost passed was Jon Kyl's (R-AZ) S. AMDT. 2562 to amend the Internal Revenue Code of 1986 to extend and modify the 15-year straight-line cost recovery for qualified leasehold improvements and qualified restaurant improvements, and to provide a 15-year straight-line cost recovery for certain improvements to retail space. A motion to waive the Budget Act was rejected 49 - 50 (Vote Number: 304) and the amendment was ruled out of order by the chair. Wayne Allard's (R-CO) S. AMDT. 2535 to codify the unborn child rule was narrowly defeated 49 - 50 (Vote Number: 302).

Amendments to curtail SCHIP defeated or withdrawn included:

Meanwhile, Dingell submitted a second bill, H.R. 3162 on July 24, amended by the Committee on Ways and Means (H. Rpt. 110-284) which passed 225 - 204 (Roll no. 787) on August 1.

Families USA provides this chart comparing the two bills. The Senate version would extend coverage to about four million additional children and increase ultrasound technician training across the country, while the House version would add five million children, at an added expense of $15 billion over five years, but balance costs through cuts to the Medicare Advantage program, which privatizes health insurance at a higher cost than traditional Medicare coverage.

August 17, while the Congress was in recess and Health and Human Services Secretary Mike Leavitt blogged about a trip to Africa, his employee Dennis G. Smith issued new SCHIP regulations to state health officials encompassing some of the Republican amendments that failed in the Senate. Those regulations would require states to assure they have covered 95 percent of children from families earning less than twice the federal poverty level before expanding SCHIP to cover wealthier children. Vermont, with the highest rate of coverage, has only achieved 92%. In "Moving Backward: New Federally Imposed Limits On States' Ability to Cover Children, " Cindy Mann and Michael Odeh of Georgetown University look at the effects of the new regulations.

September 4, as Congress returned to Washington, the American Public Human Services Association and its affiliate, the National Association of State Medicaid Directors, both of which represent state health officials, wrote to Leavitt saying, "The letter effectively changes the nature of the SCHIP program by seriously limiting the states' flexibility in designing programs, imposing mandatory cost sharing requirements, requiring additional reporting mandates and imposing burdensome waiting periods."

Many Republican Governors have defected from the President's position, signing a July 24 letter from the National Governors Association urging reauthorization of the program with increased funding and flexibility. But while the Senate passed the bill with enough votes to override a Bush veto, some Republicans have threatened to withdraw support if changes are made. The House version had few Republicans behind it, because of opposition to insuring more children and cutting the Medicare Advantage program. And on September 4, McConnell maneuvered to stall a conference committee.

According to CQ Healthbeat News for September 4, "Senate Majority Leader Harry Reid, D-Nev., tried Tuesday to appoint conferees on the bills by unanimous consent. But Minority Leader Mitch McConnell, R-Ky., objected, postponing the conference, for now. Senate Republicans say they want assurances ahead of a conference that the final bill will closely resemble the Senate-passed legislation in scope and spending, rather than the more ambitious and expensive House bill.

"McConnell said he was objecting because the House had not yet formally requested a conference on the bills."

As the House and Senate conference committee finally met to hammer out a compromise, President Bush held a press conference on September 20 criticizing Congress’ approach to children’s health coverage. The Center for Budget and Policy Priorities rebutted his arguments. After the conference version of SCHIP (summary), which closely resembled the Senate plan, was announced September 21, President Bush used his weekly radio broadcast the next day to again criticize the program and threaten a veto. Conservative Republican Senator Charles Grassley countered that the President was holding SCHIP hostage to his broader policy goals of using tax deductions to help people afford private health insurance coverage.

On September 25, the House voted 265-159 in support of the compromise worked out by negotiators, which would renew the program for five years, with a total of $60 billion, financing the $35 billion in additional spending by increasing the federal excise tax on cigarettes by 61 cents, to $1 a pack. The measure stripped privatized Medicare Advantage cuts in the House version, H.R. 3162, which drew Republican opposition.

Although another 41 Republicans joined the four who crossed party lines to vote for the broader House bill in July, this number fell short of the 290 needed to override a veto. Two of the eight Democrats voting no, Dennis Kucinich (OH) and Kathy Castor (FL) had voted for the larger House bill. The Senate voted 67-29 on the evening of September 27 in favor of SCHIP.

With the measure set to expire September 30, on September 26, the House passed a continuing budget resolution, HJ Res 52, on a vote of 404-14, which included the SCHIP program. The House had passed all twelve spending bills, while the Senate had approved four, but there had been no conference committees and Bush has threatened vetoes of all the bills. Acording to an article from AP’s Andrew Taylor, House Appropriations Chair David Obey (D-WI) complained, “The president would have the country believe that we ... are pouring money into the domestic budget. I would suggest that restoring $16 billion in presidential cuts is mighty small potatoes compared to the $200 billion he wants us to spend in Iraq.”

With weak prospects for further Republicans defecting from the President’s position in House to override the looming SCHIP veto, a continuing resolution merely moves the goalpost from September 30 to November 16. A May 2007 Congressional Budget Office report found that the President’s plan -- a $5 billion expansion over five years -- would underfund the program by $9 billion during that period. The analysis of the updated bill can be found here.

The Georgetown University Health Policy Institute’s Center for Children and Families analysis of the reauthorization approved by Congress on September 28, finds it would “set SCHIP on a solid path over the next 10 years….The legislation would allow states to continue their efforts to cover more children, particularly the lowest income children….Many states are now poised to make further progress, but their ability to do so will depend in large part on the strength of SCHIP reauthorization legislation. Without adequate and predictable SCHIP funding and new tools to encourage and support coverage efforts, the number of uninsured children is certain to continue to rise.”

It remains to be seen whether the coalition of SCHIP supporters convened by the Robert Woods Foundation will prevail or if partisan wrangling and criticism by the likes of the conservative Heritage Foundation, the Reason Foundation the U.S. Chamber of Congress and the tobacco industry will derail a majority in Congress who are attempting to use this legislation to insure more children.