Congress reauthorizes SCHIP, expands program's eligibility

Washington -- The House on Feb. 4 voted 290-135 to adopt a $32.8 billion, 4½-year reauthorization and expansion of the State Children's Health Insurance Program that the Senate had approved on Jan. 29. The vote paved the way for President Obama to sign the bill later that day.

The measure reauthorizes SCHIP through Sept. 30, 2013, and covers nearly 11 million children, up from about 7 million in the existing program. By some counts, more than 8 million children in the U.S. are uninsured. The expansion will be funded almost entirely with a 62-cent increase in the federal tobacco tax.

American Medical Association President Nancy H. Nielsen, MD, PhD, praised the passage, which she said came at a time when the economic downturn has added more children to the ranks of the uninsured.

"Years of hard work and commitment to reauthorize SCHIP with proper funding and expanded eligibility have finally paid off," she said. "Now millions more American children will be able to get the health care they need to have the best chance to learn, develop and succeed in life."

David T. Tayloe Jr., MD, president of the American Academy of Pediatrics, said the measure is a first step toward comprehensive health system reform.

The approval wraps up nearly two years of work on reauthorizing SCHIP. It also opens the door for Democrats in Congress to begin work on universal coverage legislation with Obama, said Rep. John Dingell (D, Mich.).

The House backed away from the original version of the bill it adopted on Jan. 14. That measure contained language that would have banned new physician-owned hospitals and prevented nearly all existing physician-owned hospitals from expanding their facilities or increasing their level of doctor ownership.

The AMA opposed the physician-owned hospital ban, said Joseph M. Heyman, MD, chair of the AMA Board of Trustees.

The SCHIP reauthorization correctly focused on "providing care to children in need and not limiting access or choice for Medicare beneficiaries through provisions that place restrictions on physician ownership of hospitals," he said.

Lost GOP support

The Senate approved the SCHIP reauthorization by a 66-32 vote, with nine Republicans supporting the bill and no Democrats opposing it. Some Republicans criticized the bill for offering SCHIP coverage to legal immigrants without a waiting period, for potentially encouraging parents to switch privately insured children to SCHIP and for not targeting coverage to low-income children.

Because of some of the new policy changes in this year's legislation, the Senate measure lost the support of two leading Republicans -- Sen. Orrin Hatch (R, Utah) and Sen. Charles Grassley (R, Iowa) -- who worked with Democrats on SCHIP reauthorization bills in 2007. President Bush twice vetoed those measures.

Hatch said he voted against the current bill in part because, unlike the 2007 versions, it would end a five-year waiting period for covering legal immigrant children under SCHIP.

Although Democratic leaders let Republicans propose several amendments, the Senate approved no significant Republican-backed changes.

One amendment by Sen. Tom Coburn, MD (R, Okla.), would have subsidized private health insurance premiums for children in families earning between 200% and 300% of the poverty level if they are eligible for SCHIP in their state.

Dr. Coburn said senators should "ask whether parents should have the right to make choices about health care for their kids or whether those choices should be made for them by career politicians and government bureaucrats."

Sen. Pat Roberts (R, Kan.) proposed an amendment that would have capped SCHIP eligibility at the lesser of a state's median income or $65,000 for a family of four -- equal to about 300% of the federal poverty level. New Jersey, for example, covers children in families at up to 350% of poverty.

"Low-income children should be our priority," he said. "That is what the authors of the program had in mind when it was first passed in 1997." The amendment also would have ended states' ability to disregard certain income when calculating SCHIP eligibility.

An amendment by Sen. John Kyl (R, Ariz.) would have called for the Health and Human Services secretary to commission a study on how to avoid "crowd out," in which privately insured children switch to public insurance programs such as SCHIP.

Kyl said as many as 2.5 million privately insured kids would enroll in SCHIP under the new bills, according to his take on earlier Congressional Budget Office calculations.

Hatch said he didn't understand why Democrats would drop the crowd-out provision, among others negotiated in the 2007 SCHIP bills. "We could have had a responsible bill with bipartisan support -- one that would have really helped the kids who need it most," he said.