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Congress Reaches Compromise On SCHIP Children's Health Insurance

Armen Hareyan's picture

State Children's Health Insurance Program

Senate and House negotiators on Friday announced that they havereached an agreement on compromise legislation that would reauthorizeSCHIP and expand enrollment from 6.6 million children to about 10million children, CQ Today reports.

Thecompromise bill, which resembles the Senate version of SCHIPlegislation, would provide an additional $35 billion in funding overthe next five years and bring total spending on the program to $60billion. The additional funding would be paid for by a 61-cent-per-packincrease in the tobacco tax, as proposed in the Senate version (Wayne[1], CQ Today, 9/21). The compromise legislation does not include revisions to Medicare (Lengell, Washington Times, 9/22).

In addition, the bill would:

  • Change the name of the program from SCHIP to the Children's Health Insurance Program;
  • Requiredental benefits for all children enrolled in the program, as well as"mental health services on par with medical and surgical benefits"covered under SCHIP, according to a summary released by the Senate Finance Committee;
  • Reinforce coverage of early periodic screening diagnosis and treatment benefits;
  • Allow states to enroll pregnant women in SCHIP or cover them through other approaches;
  • Phaseout coverage of childless adults after one year. The government wouldprovide temporary Medicaid funding to cover those adults enrolled inSCHIP, and states would be able to ask the government for a waiver tocover the adults through Medicaid;
  • Revise CMS enrollment restrictionsannounced in August, including the provision that mandates states coverthe lowest-income children prior to enrolling children in families withannual incomes above 250% of the federal poverty level. The SCHIP bill"gives states time and assistance in developing and implementing bestpractices" to prevent substitution of private coverage for publicassistance, according to the Senate Finance Committee summary;
  • Provideenrollment incentives to states that include "additional up-frontfunding for states planning improvements to their" SCHIP programs;adjustment payments to states that "face a funding shortfall and meetenrollment goals" to ensure that "no child who is eligible for Medicaidor [S]CHIP is denied coverage or placed on a waiting list;" and provide$100 million in grants to states, local governments, schools, communityorganizations and others to enroll eligible children in the program,according to the summary;
  • Expand premium assistance programs; and
  • Set overall spending caps on the federal funding to ensure that program costs do not exceed the amounts authorized (Reichard, CQ HealthBeat, 9/21).

Final language is expected on Monday (Stout, New York Times,9/21). Sen. Jay Rockefeller (D-W.Va.) on Friday said that the delay inthe final language is due to concerns about the wording of theprovision that revises the CMS rule. Rockefeller said that the rulecould not be rescinded completely because supporters of the bill didnot want to "hand [President Bush] a reason to veto" the compromisebill.

While some House Democrats expressed concern over thesize of the cigarette tax increase, House leadership said that theyexpect the bill to be approved (Johnson/Bourge, CongressDaily, 9/21). The House is scheduled to vote on the measure on Tuesday (Chicago Tribune, 9/22). The Senate is expected to vote on the bill by Thursday (Lee, Washington Post, 9/22).


Senate Finance Committee ranking member Chuck Grassley (R-Iowa) said,"This legislation will get [SCHIP] back on track and reclaim preciousresources for low-income kids," adding, "It breaks the legislativeimpasse and should have strong support from both Democrats andRepublicans" (Swanson, The Hill,9/22). Sen. Orrin Hatch (R-Utah) said on Friday that the negotiatedbill is "an honest compromise that improves a program that works forAmerica's low-income children" (New York Times, 9/21).House Speaker Nancy Pelosi (D-Calif.) said, "We are hopeful that thepresident will reconsider his veto threat and sign this bill into lawon behalf of our nation's children" (Washington Post, 9/22).

Bush Radio Address

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Bush in his weekly radio address on Saturday called the compromise legislation "irresponsible," the AP/Washington Postreports. "Democrats in Congress have decided to pass a bill they knowwill be vetoed," Bush said, adding, "Members of Congress are riskinghealth coverage for poor children purely to make a political point." Hecontinued, "Our goal should be to move children who have no healthinsurance to private coverage -- not to move children who already haveprivate health insurance to government coverage" (Loven, AP/Washington Post, 9/23).

WhiteHouse spokesperson Dana Perino on Friday said, "Once the Democratsfinish their political posturing, the president looks forward toworking with Congress to pass SCHIP reauthorization he can sign" (Washington Post, 9/22). HHSSecretary Mike Leavitt said that the debate over SCHIP "is acrossroads" and Bush sees the SCHIP deadlock as the "moment" to have a"larger debate" about health care (Wolf, USA Today, 9/23).

Democratson Saturday responded to Bush's statements, saying that if Bush vetoesthe bill, 15 states will run out of funding by the end of September andthousands of children will lose coverage, according to the AP/Post.Pennsylvania Gov. Ed Rendell (D) said, "The administration has tried toturn this into a partisan issue and has threatened to veto. The healthof our children is far too important for partisan politics as usual."Rendell added, "If the administration is serious about solving ourhealth care crisis, it should be expanding, not cutting back, thisprogram, which has made private health insurance affordable formillions of children" (AP/Washington Post, 9/23).


According to CQ Today, House Democrats are attempting to win Republican support through "both cajoling and outright pressure." The Democratic Congressional Campaign Committeeon Sept. 20 issued press releases to the media in the districts of 50House Republicans asking whether the lawmakers would "stand with ...children, or with President Bush?" However, "[w]hat distresses somesupporters is that there does not appear to be any plan for what to doafter" Bush vetoes the compromise bill.

Bruce Lesley,president of First Focus, said, "It's sort of like, 'Don't talk to usabout that, we're not there yet'" (Wayne [2], CQ Today,9/21). Hatch said that Congress would have difficulty overturning apresidential veto and most likely would need to pass a temporaryextension of the program, according to the Los Angeles Times (Alonso-Zaldivar, Los Angeles Times, 9/23).

Fiscal Conservative

Bush "is headed into a spending battle with Congressional Democrats"after threatening to veto SCHIP because of its "fiscalirresponsibility," the New York Times reports. According to the Times,Bush's shift toward being fiscally conservative "has undeniablepolitical benefits for a president struggling to reassert his authoritywhen his standing even within his own party is under attack." Democratssay that the administration is hypocritical in accusing them of beingfiscally irresponsible, the Times reports.

If Bush "was interested in fiscal discipline, he should have started $3 trillion ago," House Democratic CaucusChair Rahm Emanuel (D-Ill.) said. The White House defends the vetothreats, saying that Republicans when in the majority stayed withinfiscal limits, while Democrats have not (Gay Stolberg, New York Times, 9/22).


  • Richmond Times-Dispatch:"Congressional Democrats claim too many Americans can't afford to buyhealth insurance in the private market" as a reason for expanding SCHIPcoverage, according to a Times-Dispatch editorial. Theeditorial continues, "Americans certainly have a harder time of it whentaxes take more money out of their pockets than food, clothing orshelter. Expanding the current program to cover the upper middle classis a shameless example of trying to buy people's votes with their ownmoney." It concludes that Bush "should carry through on his vetothreat, and sink this SCHIP" (Richmond Times-Dispatch, 9/24).
  • Seattle Post-Intelligencer:Bush's "bring-'em-on determination to block expansion of American kids'access to health coverage is deeply troubling," according to a Post-Intelligencereditorial. The president's veto threat "is absurd, coming from the samepresident who earlier wouldn't wait for Senate Republicans to finishwork on an excellent expansion compromise before promising a veto," theeditorial writes, adding, "Bush is blatantly misrepresentingcompassionate expansion as a step toward government takeover of healthcare" (Seattle Post-Intelligencer, 9/21).
  • Wall Street Journal:The administration's SCHIP enrollment standard that limits enrollmentof children in families with annual incomes greater than 250% of thefederal poverty level "moves the most disadvantaged children to thehead of the line, before subsidizing those who need it less" and"checks SCHIP's mission creep," according to a Journaleditorial. It concludes, "With his veto pledge, ... Bush is trying tohold SCHIP to something close to its original intent. We hope enoughRepublicans appreciate the policy stakes to sustain it" (Wall Street Journal, 9/24).

Opinion Pieces

  • Jim Wooten, Atlanta Journal-Constitution:"As Democratic leaders have demonstrated repeatedly in grandstanding onIraq, offering pullout legislation they know has no chance ofsucceeding, the SCHIP bill that will hit the president's desk in thecoming weeks is entirely about politics," and Bush should veto it,Wooten, associate editor of the Journal-Constitution editorial page, writes (Wooten, Atlanta Journal-Constitution, 9/21).
  • Judith Graham, Chicago Tribune:"After years of being a third rail of American politics, health carereform is back on the national agenda, raising the issue's politicalprofile," which has turned the debate over SCHIP "into a much larger,more contentious argument," Graham, a health and medicine writer forthe Tribune, writes in an opinion piece. Graham writes,"Amid the political jockeying and the inflamed rhetoric, it can be easyto lose sight of the facts -- and the stakes -- of this debate"(Graham, Chicago Tribune, 9/23).
  • Newt Gingrich/David Merritt, The Politico:"Fundamental questions over which direction our country takes on healthcare are at the heart of the discussion over SCHIP," but lawmakers must"not lose sight of what is at stake in their rush to find a quick fixto a long-term problem: the health and well-being of children who arein danger of losing their insurance coverage," Gingrich, former Housespeaker and founder of the Center for Health Transformation, and Merritt, head of the Insure All Americans project at the center, write in a Politicoopinion piece. They write that Congress "can protect kids by passing aclean, temporary 18-month extension of the current program," whichwould "give members of Congress the time and opportunity to carefullyconsider the future of SCHIP and how it can play a role in extendinghealth insurance coverage to all Americans" (Gingrich/Merritt, The Politico, 9/22).
  • Rep. Jim McCrery (R-La.), Washington Times:Democrats have focused "attention on the authorized cost of [SCHIP]over the next five years, while ignoring the long-term shortfall -- aclassic bait and switch," House Ways and Means Committee ranking member McCrery writes in a Times opinion piece. "There is a better way" to reauthorize SCHIP, McCrery writes. A bill by House Energy and Commerce Committeeranking member Joe Barton (R-Texas) would "increase the programs'funding and keep the focus where it belongs, on helping low-incomekids, according to McCrery. "The Democrats' bill is a Trojan horse,cynically exploiting our desire to help needy children in a stealthyattempt to create a massively expensive government health system," heconcludes (McCrery, Washington Times, 9/24).

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.