Children’s Insurance Will Need Bridge Funding, Democrats Say

Democrats have acknowledged that a stopgap funding bill for the State Children's Health Insurance Program will be needed before the end of the month to continue funding for the program, but they want the extension to result from a presidential veto, rather than a stalled conference committee, according to Democratic aides, CongressDaily reports.

Under the assumption that Bush will veto any significant expansion of SCHIP, House leaders "will have little choice but to play ball with" Baucus and Senate Majority Leader Harry Reid (D-Nev.) "to compromise on the more ambitious House bill," according to CongressDaily. House Democrats "are clearly limited by the reality of the Senate," which lacks support for cuts to Medicare Advantage plans as well as the House's higher funding level, CongressDaily reports.

According to a senior House Democratic aide, "We are not going to allow Bush to go after us for not getting something in time, but there is a discussion about how to overcome the differences in the House and Senate bills." The aide added, "Some people feel we need to fight for the House bill, and there are some whose view is that no matter what, it is going to get vetoed, so let's send him the smartest political product rather than the best product" (Johnson/Bourge, CongressDaily, 9/13).

House legislation (HR 3162) would reauthorize and increase funding for SCHIP by about $50 billion over five years. The expansion would be financed through reduced payments to Medicare Advantage plans and an increase in the federal cigarette tax by 45 cents per pack.

The Senate version (S 1893) would reauthorize SCHIP and increase the federal cigarette tax by 61 cents per pack to boost funding for the program by $35 billion over five years (California Healthline, 9/12).

President Bush has threatened to veto any bill that expands eligibility for the program (Modesto Bee, 9/13).

Gov. Arnold Schwarzenegger (R) has written a letter to Bush criticizing new federal rules that would limit eligibility and restrict states' efforts, including California's, to expand the program to more uninsured children (California Healthline, 9/4).

Meanwhile, House Energy and Commerce Health Subcommittee Chair Frank Pallone (D-N.J.) on Wednesday said that separating Medicare revisions from House SCHIP legislation, as requested by the Senate, remains a possibility, CongressDaily reports. Pallone said, "Obviously, we want to get [an SCHIP] bill passed by the end of the month, and we want to avoid a presidential veto. So we'll do what we have to do to get there."

Pallone said that separating the House SCHIP bill into two separate bills is unwise because the legislation, as written, would halt a scheduled 10% cut in Medicare physician reimbursement rates -- an issue almost all members of Congress believe is important, according to CongressDaily.

"Undoubtedly, Congress will want to deal with this doctors' payment issue. It certainly would be more efficient to combine these all in one bill," Pallone said during a conference call sponsored by Families USA.

Separately, Acting CMS Administrator Kerry Weems reaffirmed Bush's veto threat for the House and Senate SCHIP bills. Weems said, "From what I see inside the administration, there's no rethinking of the veto threat" (Johnson, CongressDaily, 9/13).

Rep. Jerry McNerney (D-Calif.) on Wednesday held a rally at San Joaquin General Hospital in French Camp to urge an expansion of the State Children's Health Insurance Program, the Stockton Record reports (Johnson/Shaw, Stockton Record, 9/13).

The program, known in California as Healthy Families, is set to expire Sept. 30.

McNerney said, "Health care costs are increasing so rapidly that we need to make sure all kids in the country have coverage." He added, "We are leaders of the industrialized world. There is no reason all children should not have health coverage" (Miller, Modesto Bee, 9/13).

McClatchy/Charlotte Observer on Friday examined "the obscure but inevitable phenomenon known as 'crowd-out,'" which "has emerged as the strongest criticism of expanding SCHIP." According to Congressional Budget Office estimates, for every 100 children who enroll in SCHIP, 25 to 50 previously had private health coverage.

CBO estimates that under SCHIP expansion proposals being considered in the House and Senate, by 2012, one in three children will have been previously covered by private insurance and more than two million children would be the product of crowd-out, McClatchy/Observer reports. According to McClatchy/Observer, the estimates "have bolstered the Bush administration's claims that [SCHIP] bills are an ill-advised detour from SCHIP's original intent: serving low-income children."

However, some experts say the CBO estimates might be overstated, McClatchy/Observer reports (Pugh, McClatchy/Charlotte Observer, 9/14).

It was "tactical overreach to combine" Medicare revisions with SCHIP legislation because the Medicare provisions "are clouding the debate" over the program, according to a Boston Globe editorial. The editorial continues, "No doubt Congress will keep this popular program limping along with temporary extensions at the current level," but "now is the time to pass a significant expansion of the program."

It concludes, "The House leadership has a choice: It can stick with the House bill, and blame the Republicans for blocking it, or move toward the Senate version and try to achieve a consensus on expansion this fall that will prevail over Bush's veto. More than three million children would thank the House Democrats if they sought a compromise" (Boston Globe, 9/14).