Democrats Close to Deal on Compromise Kids’ Health Insurance Bill

House Democrats on Thursday could announce a compromise with the Senate on legislation that would reauthorize and expand the State Children's Health Insurance Program, according to aides, CQ Today reports (Wayne, CQ Today, 9/19).

A draft compromise bill, announced on Sunday, reportedly closely resembles the Senate version of SCHIP legislation, which would provide an additional $35 billion in funding over the next five years and bring total spending on the program to $60 billion. The additional funding would be paid for by an increase in the tobacco tax, which would be similar to the 61-cent-per-pack tax proposed in the Senate version. The compromise bill does not include revisions to Medicare (California Healthline, 9/19).

House Energy and Commerce Subcommittee on Health Chair Frank Pallone (D-N.J.), Senate Finance Committee ranking member Chuck Grassley (R-Iowa) and Sen. Orrin Hatch (R-Utah) on Wednesday said that negotiators were close to reaching a deal. "We're just about there," Grassley said, adding, "There still are a couple things outstanding" (CQ Today, 9/19).

Grassley on Wednesday said that the final compromise bill will include $300 million for dental coverage and will adopt the formulas for state funding included in the House SCHIP bill. Grassley said that Senate Finance Committee Chair Max Baucus (D-Mont.) found a way to add the dental coverage provision while ensuring the bill follows pay/go rules. Senate negotiators adopted the House formulas for state funding in return for a guarantee that the final bill will provide only an additional $35 billion over five years. According to CongressDaily, House Democrats "consider inclusion of dental benefits a victory, and they hope the addition will help them collect votes" (Johnson, CongressDaily, 9/19).

Meanwhile, House Republicans on Wednesday "began to splinter on the issue" of SCHIP, according to CQ Today. Seventeen House Republicans told Democratic leaders that they support the compromise bill. If the 17 lawmakers vote for the compromise bill, along with the five Republicans who voted for the House SCHIP measure, the legislation would receive about 250 votes -- "still far short of the number Democrats would need to override a veto," CQ Today reports (CQ Today, 9/19).

Rep. Ray LaHood (R-Ill.), who is working with Democratic Caucus Chair Rahm Emanuel (D-Ill.) to whip up Republican support, estimated that as many as 30 Republicans would vote for the compromise bill.

However, House Energy and Commerce Committee ranking member Joe Barton (R-Texas) said he is sure House Republicans will be able to sustain a presidential veto (Johnson, CongressDaily, 9/19). Republican leaders urged Democratic leaders to pass an extension of the program rather than try to pass reauthorization legislation (CQ Today, 9/19).

The absence of revisions to Medicare in the compromise SCHIP bill "changes the stakes for many" interest groups, who were "ready to put some muscle behind passing" SCHIP legislation, The Hill reports.

Lobbying groups "with a stake in the Medicare provisions will be looking past SCHIP to restaging those fights," according to The Hill.

Supporters of the compromise SCHIP bill will have the "enthusiastic and active support of a number of groups," including Families USA, which next week will launch a lobbying campaign; the American Cancer Society and other members of the anti-tobacco lobby; and America's Health Insurance Plans, which strongly opposed the cuts to Medicare Advantage plans present in the House bill. Other groups are undecided on whether to lobby in support of the bill, according to The Hill.

AARP spokesperson Drew Nannis said, "I don't know where we're going to focus our money and our efforts. We still need to see what (the) final legislation is going to look like" (Young, The Hill, 9/20).

In related news, Baucus on Wednesday criticized HHS for making revisions to a government-contracted report by Mathematica Policy Research that examined whether an expansion of SCHIP would cause crowd-out, the phenomenon of public coverage substituting for private insurance.

CQ Today reports that in the draft executive summary, the research firm wrote, "The evidence suggests that substitution of private coverage for SCHIP was not an issue." HHS, which released the report on Wednesday, deleted that sentence while adding that "the evidence suggests that substitution of SCHIP for private coverage does occur," according to CQ Today.

The report found that between 10% and 56% of families enrolled in SCHIP dropped or declined private health insurance coverage, depending on how crowd-out was calculated. The higher figure assumes that any reduction in private coverage found among children in lower-income families eligible for SCHIP is caused by crowd-out -- a methodology the firm said has "limitations."

Timothy Love, director of the Office of Research, Development and Information at CMS, in a letter said that HHS asked Mathematica to reword the sentence because "some peer reviewers felt (the sentence) was not completely supported by MPR's own discussion -- in short, it appeared to be overly speculative." Baucus said, "I'm troubled by the fact that this is not the first time we've seen skewed information coming from" HHS regarding SCHIP (CQ Today, 9/19).

NPR's "Morning Edition" on Thursday reported on the SCHIP legislation. The segment includes comments from Emanuel, HHS Secretary Mike Leavitt, Rep. Nathan Deal (R-Ga.) and Rep. Ray LaHood (R-Ill.) (Rovner, "Morning Edition," NPR, 9/20). Audio of the segment is available online.