Bush Veto Likely if Congress OKs Kids’ Health Insurance Bill

Senate Finance Committee members on Friday finalized a bipartisan agreement on the State Children's Health Insurance Program reauthorization that would increase five-year funding for the program from $25 billion to $60 billion, the New York Times reports. SCHIP expires on Sept. 30.

The plan -- negotiated by committee Chair Max Baucus (D-Mont.), ranking member Chuck Grassley (R-Iowa) and committee members Orrin Hatch (R-Utah) and Jay Rockefeller (D-W.Va.) -- would increase the federal cigarette tax from 39 cents to $1 to fund an expansion of SCHIP (Pear, New York Times, 7/14).

However, White House spokesperson Tony Fratto on Saturday said that President Bush's senior advisers "will certainly recommend a veto of this proposal. And there is no question that the president would veto it" (Pear, New York Times, 7/15).

Under the bipartisan plan, children in families with incomes up to 300% of the federal poverty level would be eligible for the program. The group of senators said that the 6.6 million children currently enrolled in SCHIP would continue to receive benefits under the plan, and an additional 3.3 million uninsured children 3.3 million children could be enrolled in the program. States that provide SCHIP to children in families with incomes higher than 300% of the poverty level would receive lower Medicaid matching payments for those children.

The plan also would prevent HHS from approving additional waivers that allow states to enroll adults in SCHIP (Reichard/Carey, CQ HealthBeat, 7/13).

The committee is expected to begin mark up of the legislation on Tuesday (CongressDaily, 7/16).

According to a statement by the senators, additional provisions of the plan would:

• Change the state funding formula to "reflect actual projected spending";
• Provide funding for outreach and enrollment efforts;
• Provide assistance for premium payments, as well as a "contingency fund to address unforeseen emergencies";
• Allow states to use information from food stamp programs and other programs to identify and enroll eligible children;
• Allow states to enroll pregnant women in SCHIP for prenatal care;
• Improve quality measures for pediatric care in SCHIP and Medicaid;
• Move childless adults currently enrolled in SCHIP into Medicaid;
• Transition "funds for existing coverage of low-income parents ... into separate small block grants at a lower federal matching rate"; and
• Streamline the Medicaid enrollment process for children in families with annual incomes below the poverty level.

Baucus in a statement said, "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."

Rockefeller said that the bipartisan group of senators achieved its "singular priority" of maintaining coverage "for the six million children that already rely on (SCHIP) for health insurance, while also working to provide coverage for the millions more that are uninsured." Grassley said that the plan "refocuses SCHIP on low-income children cost effectively, using appropriate targeting policies."

In addition, Grassley said that the plan "straightens out the mess created by all the waivers that have spent program resources on adults and higher-income kids" (CQ HealthBeat, 7/13).

Hatch in a statement said, "This proposal may not be perfect, but it's a true compromise that maintains the integrity of the CHIP program and ensures that it will continue to help the millions of children who desperately need it" (Salt Lake Tribune, 7/16).

Bush has proposed a $5 billion increase over five years for SCHIP, which would increase the program's total five-year funding to $30 billion. Fratto said, "It's important that Congress understands the serious consequences of delaying this or sending the president legislation that he clearly cannot sign" (Lee, Washington Post, 7/15).

Fratto said, "The proposal would dramatically expand [SCHIP], adding nonpoor children to the program and more than doubling the level of spending," adding, "This will have the effect of encouraging many to drop private coverage to go on the government-subsidized program" (New York Times, 7/15). In addition, Fratto said, "Tax increases are neither necessary nor advisable to fund SCHIP appropriately." Fratto said the Senate Finance Committee instead should consider Bush's recommendation to tax employees on health insurance premiums paid by their employers and provide workers with a tax deduction or credit (Freking, AP/San Francisco Chronicle, 7/16).

SCHIP "traditionally has [been] characterized" by bipartisanship at the state and federal levels, Bruce Goldberg, commissioner of the Oregon Department of Human Services, writes in a Times letter to the editor.

Goldberg adds, "If we are to continue to cover our most vulnerable children, Congress must act quickly. We urge all stakeholders to refrain from inserting partisanship into an arena where, to date, it hasn't been" (Goldberg, New York Times, 7/16).