Congress wants to enlarge SCHIP; Bush seeks limits

Washington -- Strong support exists in Congress for reauthorization of the State Children's Health Insurance Program, but divisions remain on funding and eligibility.

Last month, the House and Senate both narrowly passed budget resolutions -- roadmaps for federal spending -- creating a pathway for a five-year, $75 billion reauthorization of SCHIP. Both resolutions add $50 billion over five years to the existing $25 billion in SCHIP funding. But during the actual appropriations process, both chambers must offset the new spending with new revenues or cuts to meet budget rules, said staff members for the Senate Finance Committee and the chair of the House Budget Committee.

When it comes to specific plans, some Democrats are supporting five-year reauthorizations with eligibility as high as 400% of the poverty level and as much as $85 million in funding.

But President Bush -- in an attempt to refocus SCHIP on low-income children -- proposed a $30 billion, five-year reauthorization. This would fund coverage for children in families with incomes up to 200% of the federal poverty level.

SCHIP, a decade-old state-federal program expiring Sept. 30, provides health coverage to about 6 million children and about 600,000 adults who don't qualify for other public health programs. But between 7.5 million and 10 million children remain uninsured. Of those, approximately 2 million are eligible for SCHIP, according to various estimates.

There's a significant difference between the president's proposal and the others, said Jeremy A. Lazarus, MD, vice speaker of the American Medical Association House of Delegates and a psychiatrist from Denver.

"Clearly, the more kids we have covered, the more kids are going to be coming in and getting their health needs met. That's an investment in the future," Dr. Lazarus said.

The AMA, as a member of the Health Coverage Coalition for the Uninsured, supports full funding of SCHIP to cover all eligible children and refundable, advanceable tax credits for buying health insurance.

Rep. Rahm Emanuel (D, Ill.) in mid-February introduced a bipartisan $60 million SCHIP expansion proposal to be funded with improved collection of capital gains taxes.

In mid-March, Sen. Hillary Rodham Clinton (D, N.Y.) and Rep. John Dingell (D, Mich.) introduced the Children's Health First Act -- the first formal SCHIP bill. It would fund coverage for enrollees in families earning up to 400% of the poverty level. The House version has 28 Democratic co-sponsors; the identical Senate version has none.

The health coalition and the AMA haven't formally endorsed an SCHIP bill or proposal, but the AMA individually supports efforts to enroll all eligible children in SCHIP.

The American Academy of Pediatrics is also in favor of covering all SCHIP-eligible children, said AAP President Jay Berkelhamer, MD. "This is a vehicle [that], if appropriately funded, would cover the majority of uninsured children," he said, adding that $60 billion seems like reasonable SCHIP funding.

To expand SCHIP or not?

Health care organizations offered a lukewarm response to Bush's SCHIP proposal, which attempts to cover only the 6 million existing enrollees. Dr. Berkelhamer, for one, wondered why Bush wasn't bolder.

"I don't know what the president is thinking other than he needs to save the money for other purposes," he said.

The administration opposes SCHIP eligibility above 200% of the poverty level because the program was intended for lower-income children, according to testimony from Health and Human Services Secretary Mike Leavitt during February congressional budget hearings.

The administration and certain Republican congressional leaders also oppose using SCHIP to cover adults. Sen. Charles Grassley (R, Iowa) summed up his argument at a Feb. 1 Senate Finance Committee hearing: "The SCHIP program is for kids. The 'C' stands for children. There is no 'A' in SCHIP."

Sen. Orrin Hatch (R, Utah) agrees that SCHIP is for kids. But Hatch, in contrast to the Bush administration, supports increasing funding to cover the 2 million children eligible but not enrolled in the program.

There is some bipartisan support for SCHIP eligibility above 200% of the poverty level. The Senate on March 22 rejected a budget resolution amendment by 59-38 that would have restricted eligibility to 200% for most children.

Caught in the veto

While the reauthorization debate is just beginning, 14 states expect to run out of 2007 SCHIP money before year's end if Congress isn't able to pass a supplemental Iraq spending bill the president is willing to sign.

The House and Senate Iraq bills both include at least $735 million to cover states' SCHIP shortfalls, which total about the same amount. But Bush has promised to veto any measure including a withdrawal timetable from Iraq. The compromise war spending bill in the works is expected to have one.

Although there's bipartisan support for approving additional 2007 SCHIP funding, it's unclear how long that will take in light of the veto threat. This leaves those 14 states, particularly Georgia, in limbo. Georgia froze enrollment for its SCHIP, PeachCare, on March 11 due to a $113 million shortfall.

Gov. Sonny Perdue and the Legislature have promised to use other state funds to run PeachCare while Congress works on funding, said Dena Brummer, spokeswoman for the Georgia Dept. of Community Health.