Budget Request To Increase Spending For SCHIP

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StateChildren's Health Insurance Program

President Bush on Mondaywill release a $3 trillion fiscal year 2009 budget request that wouldsignificantly reduce or eliminate spending for dozens of health and otherprograms but would significantly increase spending for SCHIP, the New York Times reports. HHSSecretary Mike Leavitt on Friday said that the budget request will include a$19.7 billion increase in federal funds for states for SCHIP over the next fiveyears. Under the budget request, spending for SCHIP would increase to $45.1billion in FY 2013.

Leavitt said that the increase would allow SCHIP to provide health insurancefor children in families with annual incomes as much as 200% of the federalpoverty level, the "original intent" of the program. The increasewould divide the difference between the $5 billion increase that Bush requestedlast year and the $35 billion increase that Congress sought. "It is notclear when the White House concluded that $19.7 billion was needed, a questionthat lawmakers are sure to pursue in hearings," the Timesreports (Pear, New York Times, 2/1).

Reaction to ProposedReduction in Medicare, Medicaid Spending

Lawmakers and lobbyistslikely "will spend the bulk of the week reacting" to a $200 billionreduction in spending for Medicare and Medicaid over five years included in thebudget request, CongressDaily reports (Cohn/Strohm, CongressDaily,2/4). According to CQ Today, hospitals will "bear the bruntof the Medicare cuts," but Bush likely "won't propose cuts to privatehealth plans in the Medicare Advantage program."

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Lawmakers and lobbyists predict that "Congress will ignore PresidentBush's call for significant cuts in Medicare and Medicaid," according to CQToday (Reichard, CQ Today, 2/1). Congress rejected asmaller reduction last year, and "there's no reason to think they wouldrise to the challenge in an election year," the AP/Contra Costa Times reports (Taylor, AP/Contra Costa Times,2/2).

Prospects for BudgetRequest

Bush "wants todramatically slow the growth of big federal health programs" in his budgetrequest, but lawmakers and their aides "say Bush has little leverage leftto force his proposals on a recalcitrant Congress," the Washington Post reports (Abramowitz/Weisman, WashingtonPost, 2/3). According to the AP/Times, "Congress isultimately likely to reject" reductions in spending for HHS included inthe budget request, and the "gulf" between Bush and lawmakers"could mean gridlock that would tie up the agency's budget until Bush'ssuccessor takes office" (AP/Contra Costa Times, 2/2).

Bush "had success last year using his veto to trim back spendingbills," but "this year Democrats are better positioned to simply waitfor the next president," which could "mean less ferocity than usualin the budget battle as both sides wait to see the results of November'selection," according to the Post (Washington Post,2/3).

Editorial

The budget request includes"significant cuts to the Medicare and Medicaid programs" that"would not apply to the federal payments that private insurersreceive" for MA plans, which "have been rife with overpayments,"according to a Las Vegas Sun editorial. The editorial states,"A splendid plan, Mr. President. Slash the services that allow people to liveat home longer and avoid expensive nursing home care, then cut reimbursementsto nursing homes so that they have room for fewer patients." Democraticlawmakers have said the budget request "hasn't a chance of survival, andwe hope that's true," the editorial states, adding, "Bush's proposalwould be a terrible, cruel way to treat our nation's sick" (Las VegasSun, 2/4).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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