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SCHIP Compromise Bill Unlikely To Include Medicare Revisions

Armen Hareyan's picture

State Children's Health Insurance

Congressional negotiators have agreed not to include revisions toMedicare in compromise SCHIP legislation that would reauthorize andexpand the program, and lawmakers could vote on compromise legislationnext week, CongressDaily reports (Johnson, CongressDaily, 9/19).

Thedraft compromise bill, announced on Sunday, closely resembles theSenate version of SCHIP legislation, which would provide an additional$35 billion in funding over the next five years and bring totalspending on the program to $60 billion. The additional funding would bepaid for by an increase in the tobacco tax, which would be similar tothe 61-cent-per-pack tax proposed in the Senate version (Kaiser Daily Health Policy Report, 9/18).

Thecompromise bill does not include provisions of the House bill thatwould reduce payments to Medicare Advantage plans to help fund anexpansion of the program, leaving a cigarette tax increase as theprimary funding source for the legislation. However, a greatercigarette tax increase than was included in the House SCHIP legislationis "riling many members of Congress from tobacco-producing states,"according to the Washington Times.

Sen.Jim Bunning (R-Ky.) said that under the proposed tax increase, Kentuckywould pay $602 million more in tobacco taxes over five years than itwould receive in SCHIP funds. California would receive $2.5 billionmore in SCHIP funding than what it would spend on the tobacco tax,according to Bunning (Lengell, Washington Times, 9/19).

In addition, some House Democrats "have bristled" at being asked to separate the Medicare revisions, according to the Wall Street Journal. Senate Finance CommitteeChair Max Baucus (D-Mont.) said he will pursue several Medicare issuesat a later date, including cuts to MA plans and reversing a scheduledcut in physician reimbursement rates. Baucus said he is consideringcuts to MA plans that are "not as much" as those in the House SCHIPbill, but he noted that some cuts "will be significant."

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A"major motivation" for lawmakers to reconsider revisions to Medicare isthe scheduled physician reimbursement rate cut. Reducing payments to MAplans could help provide funds to delay the physician reimbursementcuts, according to the Journal (Lueck, Wall Street Journal, 9/19).


A "number of fine points" within the compromise bill still "need to bedetermined," according to a House Democratic aide (Wayne, CQ Today, 9/18). House Speaker Nancy Pelosi (D-Calif.) and House Energy and Commerce CommitteeChair John Dingell (D-Mich.) will ask Senate negotiators to acceptsmall changes in the bill on issues such as mental health, dental care,documented immigrant coverage and pregnant women, according to House Ways and Means Committee Chair Charles Rangel (D-N.Y.) (Johnson, CongressDaily, 9/18). House negotiators also are seeking mental health parity under SCHIP (CongressDaily, 9/19).

Sen.Orrin Hatch (R-Utah) said he is willing to hear Pelosi and Dingell'srequests but is not willing to sacrifice any votes that would causethem to lose a veto-proof margin in the Senate (CongressDaily,9/18). Rep. Deborah Pryce (R-Ohio) said that in the House, "[m]ost ofthe moderates will vote for SCHIP if the Medicare piece is taken out"(Weisman/Murray, Washington Post, 9/19).

Next Steps

Pelosi said that the House is expected to vote on SCHIP legislation on Tuesday, CongressDailyreports. If the House passes the measure unchanged, it will go directlyto President Bush to sign or veto. However, if the House makes changesto the bill, the Senate will need to hold another vote -- which couldgive "GOP leaders a chance to protest and cause delay," according to CongressDaily.Senate Republican leaders have not decided whether they will block anSCHIP bill if given the opportunity, according to a Senate leadershipaide (CongressDaily, 9/18).

Baucus on Tuesday saidit is likely that the Senate will need to re-vote on the legislation.If lawmakers are successful in passing legislation by Sept. 30, whenthe program is set to expire, Democrats will be able to blame the WhiteHouse for allowing the program to expire, House Majority Leader StenyHoyer (D-Md.) said (CongressDaily, 9/19).

Meanwhile, the administration has asked Congress to send the president a short-term extension of the program. An HHSofficial said, "The proposals being discussed currently are unsound,and it looks increasingly unlikely that this will get resolved by Sept.30. Congress needs to pass a clean extension now so low-income childrenwill not lose their coverage and we will have sufficient time tocontinue to work on this issue." Democrats have said they will pass anextension of the program after the president issues a veto (CongressDaily, 9/18).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.