After Bush veto, SCHIP strategy shifts to courting override votes

President Bush wants more emphasis on low-income children. He is calling for a five-year, $5 billion funding increase.

By — Posted Oct. 15, 2007

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Supporters of a $35 billion State Children's Health Insurance Program expansion Congress adopted last month are working to get enough votes to override a presidential veto, but it will be an uphill battle.

Although the Senate passed the bill on Sept. 27 with a veto-proof majority, the House two days earlier fell 24 votes short of that mark. Bush vetoed the bill Oct. 3. The legislation "would move health care in this country in the wrong direction," he said.

Bill advocates, including the American Medical Association, are lobbying intensely. "The AMA strongly urges members of Congress from both political parties to stand on the side of America's parents and children by voting to override the veto," said Association Board of Trustees Chair Edward L. Langston, MD. "The nation's children, parents and physicians are counting on Congress to strengthen this successful program."

As part of the Americans for Children's Health coalition, the AMA is airing local ads to thank House and Senate members who supported the bill and to encourage those who opposed it to change their minds.

Meanwhile, the American Academy of Pediatrics on Oct. 1 visited the offices of 51 legislators who voted against the bill, said AAP President-elect Renee Jenkins, MD.

At press time, the overall effort had generated some success. Two House members, one Republican and one Democrat, said early this month they would now support the compromise bill, Dr. Jenkins said. Still, that means an override remains 22 votes away. "It's going to be pretty tough."

Amos Snead, a spokesman for Minority House Whip Roy Blunt (R, Mo.), agreed. Snead said there will be enough votes to sustain the veto "today or two weeks from today."

Funding 10 million children

The legislation more closely resembles the Senate SCHIP bill, which also called for a $35 billion, five-year funding increase, than the House bill. That measure called for an extra $50 billion. But the president has opposed anything beyond his proposal to add $5 billion to the program.

The compromise bill would provide enough funding to cover 10 million children, up from the 6 million enrolled now. That expansion would cover 3.1 million uninsured children and maintain coverage for 700,000 enrollees who would lose it under existing SCHIP funding, according to the Congressional Budget Office.

The legislation would bring five-year program funding to $60 billion. The increase would be paid for by boosting the national cigarette tax by 61 cents. States that provide coverage to children in families with incomes above 300% of the poverty level, about $62,000 for a family of four, more likely would receive federal matching funds at the Medicaid level, rather than the more generous SCHIP level for those children.

In vetoing the measure, Bush voiced concern that it would raise taxes and cover too many children from wealthier families or who already are enrolled in private plans. "Our goal should be to move children who have no health insurance to private coverage, not to move children who already have private health insurance to government coverage," he said.

Democrats seemed to relish the showdown with Bush. Rep. Charles Rangel (D, N.Y.) told House members voting against the bill that the president's concerns would not resonate with voters. "I don't care how you cut it ... when you go home, the question basically is going to be were you with the kids or were you not?"

Although SCHIP would have expired on Sept. 30, the president signed a bill late last month to keep the federal government, including SCHIP, funded through Nov. 16. If the two sides cannot agree and SCHIP funding were to lapse, 15 states have enough funding for fiscal 2008, a dozen would immediately run out of money, and 23 states might be able to access Medicaid funding to run their programs, concluded an Aug. 28 Congressional Research Service report.

Crowding out private plans?

One of the reasons Bush opposes the compromise SCHIP bill is that he fears it will lead people to drop private insurance in favor of public coverage and employers to stop offering insurance -- an effect known as "crowd-out." But a new analysis says crowd-out may not be dramatic.

The administration has cited a May Congressional Budget Office estimate that between 25% and 50% of existing SCHIP enrollees were previously in private plans. Crowd-out would be even more pronounced if SCHIP targeted children from families with incomes higher than today's eligibility levels, the report said.

The CBO also estimated last month that the compromise SCHIP bill would cover 3.8 million uninsured, plus 2 million who are enrolled in private health plans today.

But a look at Census Bureau data on the uninsured in 2006 drew a different picture. While employer-sponsored coverage declined at about twice the rate for children as it did for adults, the drop does not appear to be driven by Medicaid or SCHIP, said a September report by the Urban Institute, a policy research organization, for the Kaiser Family Foundation.

It found a decline in employer-sponsored coverage for adults, even though they're less likely to be eligible for public plans. Also, employer-sponsored coverage fell at all income levels, not just among the lower-income people more likely to be eligible for Medicaid or SCHIP.

"These findings suggest that the increase in public coverage helped to offset the decline in employer-sponsored insurance for low-income children, but did not cause it," the report said. The authors said premium increases may have been a factor.

Several provisions in the House bill that would have expanded coverage aren't in the compromise bill. One would have enabled states immediately to cover legal immigrants under SCHIP and Medicaid, instead of making them wait five years.

Instead, the bill specifies that no federal funding would be used to cover undocumented immigrants, and it would apply Medicaid citizenship documentation requirements to SCHIP. The measure would ease the administrative burden slightly by allowing states to verify identity using Social Security numbers, but states that have more than 3% of their identity checks come back as invalid could be punished.

Still, the National Hispanic Medical Assn. supports the bill, said Elena Rios, MD, MSPH, its president and CEO. "We believe that the SCHIP program is essential to increasing access to health care for poor children ... and providing the opportunity for better quality of life for more Americans."

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SCHIP compromise

The House and Senate both easily approved an expansion of the State Children's Health Insurance Program late last month. It would:

  • Cover an additional 3.8 million uninsured children, including 700,000 existing enrollees who otherwise would lose coverage under current SCHIP funding.
  • Increase funding by $35 billion over five years, to reach $60 billion.
  • Raise federal cigarette taxes by 61 cents, to $1 per pack.
  • Make it more difficult for states covering children above 300% of the federal poverty level to receive the more generous SCHIP federal matching rate for those children.
  • Impose citizenship documentation requirements on SCHIP, but allow states to verify identity with Social Security numbers.
  • Require dental coverage.
  • Require parity of physical and mental health benefits in SCHIP plans that offer mental health coverage.
  • Create SCHIP and Medicaid quality measures for children.
  • Allow states to subsidize employer-sponsored health coverage as an alternative to SCHIP.

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Who are the newly uninsured?

Children in middle-income families accounted for the largest share of the 710,000 newly uninsured children in 2006.

Greater than 400% of poverty150,00021.2%
200-399% of poverty340,00047.5%
Less than 200% of poverty220,00031.3%

Source: Urban Institute; Kaiser Commission on Medicaid and the Uninsured, September

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Uninsured but eligible for coverage

Of the 78.2 million children in the U.S. in 2006, 9.3 million -- or 11.9% -- were uninsured. Most of them were eligible for either Medicaid or the State Children's Health Insurance Program.

Medicaid eligible4.0 million43.1%
SCHIP eligible2.3 million25.1%
Ineligible for either3.0 million31.8%
9.3 million100.0%

Source: American Academy of Pediatrics, September

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