The Senate Finance Committee approved a proposal on June 19 to reauthorize the State Children’s Health Insurance Program (SCHIP) – a joint federal-state program established in 1997 to provide health insurance to children whose families have low incomes but earn too much to qualify for Medicaid.  The proposal, which was approved 17-4, will provide $35 billion over five years in increased funding to be paid for by a 61-cent tobacco tax increase.  The new funds will keep 800,000 children from becoming uninsured and will extend coverage to 3.2 million more children.  Currently, 6.6 million children are enrolled in SCHIP.
The vote demonstrated a bipartisan commitment to SCHIP. Six Republicans joined the eleven Democrats on the committee in endorsing the proposal. The four Senators voting in the negative were: Trent Lott (R-MS), Jon L. Kyl (R-AZ), John Ensign (R-NV) and Jim Bunning (R-KY).

The proposal, which was crafted by Chairman Max Baucus (D-MT) and Ranking Member Charles E. Grassley (R-IA) in collaboration with Senators John D. Rockefeller (D-WV) and Orrin G. Hatch (R-UT), includes a number of positive features. For starters, it increases the SCHIP funding available to states over the next five years from $25 billion to $61.4 billion, provides $100 million for a new outreach program with an emphasis in enrolling underserved populations and racial and ethnic minorities, and includes new incentive bonuses for states to lower the rates of uninsured children. The bill also creates an option to cover pregnant women and improves access to mental and dental health services.  Other initiatives contained in the bill include:

• An Express Lane demonstration project which will allow 10 states to use financial information collected from WIC, school lunch, and other means-tested programs to identify and enroll children eligible for SCHIP or Medicaid;
• A premium assistance program that will allow employers with fewer than 250 employees to buy into a purchasing pool that offers SCHIP-benchmark products;
• An initiative within the Department of Health and Human Services charged with establishing and collecting data on core pediatric measures and identifying promising ways to improve the quality of children’s health; and
• The option for states to verify applicants’ citizenship status via their social security number.

Additionally, changes were made to SCHIP’s financing structure.  Now, states will have a period of two years, instead of three, to use their SCHIP allotment. This change is intended to help ensure that funds are channeled to states with the greatest need.  A contingency fund is also established to assist states with funding shortfalls arising from economic downturns or emergencies.

At the same time, the bill falls short in some areas. Most notably the bill does not make use of the full $50 billion set aside in the budget resolution and neglects to extend coverage to legally residing immigrant children and pregnant women. Other setbacks are in the area of adult coverage. The proposal prohibits any new waivers to cover parents with SCHIP funds and will eventually transition parents out of SCHIP and into a separate block grant program. Childless adults will also be moved out of SCHIP and will be placed in Medicaid.

Though the mark-up illustrated the vast bipartisan support for the bill, it also provided a preview of some of the challenges ahead. Some harmful amendments were offered during mark-up that are sure to come up again.  They include proposals to impose a shorter and harsher transition of adults off SCHIP, to limit coverage of children to below 200 % of the federal poverty level and to offer tax credits for the purchase of family coverage.

Despite spending less, covering fewer children and limiting coverage of parents to secure bipartisan support, the Bush Administration has repeatedly stated its intention to veto the Senate bill.  The President’s SCHIP proposal would only have increased funding by $5 billion over five years – not enough to cover the number of children now enrolled. Children’s advocates were stunned last week when the President downplayed the importance of health insurance for children: “I mean, people have access to health care in America. After all, you just go to an emergency room.” — President George W. Bush (Cleveland, 7/10/07).

What’s Next: The bill could come to the Senate floor as early as this week.  The House Energy and Commerce and Ways and Means Committees may also mark-up SCHIP this week.  SCHIP is set to expire on September 30.

Subscribe: