On July 19, the Senate Finance Committee approved, 17-4, a bill (as-yet-unnumbered) to renew and expand the State Children’s Health Insurance Program (SCHIP). SCHIP was created by the Balanced Budget Act of 1997 (P.L. 105-33) and provides health insurance to low-income children who are ineligible for Medicaid but unable to obtain private health insurance coverage. SCHIP’s current authorization expires on September 30, 2007.
Chair Max Baucus (D-MT) said, “Children with health coverage are more likely to get the care that they need, when they need it. Because of CHIP, millions of children get checkups. They see doctors when they are sick. They get the prescription medicines that they need. Uninsured children suffer…When care is delayed, small problems can become big problems…CHIP helps more than six million children whose parents work but cannot afford insurance on their own. These low-income working families are not poor enough for Medicaid. And they are not rich enough to afford private health insurance. Ninety-one percent of children covered by CHIP live in families making less than twice the poverty level.” He continued, “Today, we will consider legislation to keep coverage for all children currently in the program. And today, we will start to reach more than three million additional uninsured, low-income kids. We keep CHIP focused on kids… And we pay for what we do. When Congress created CHIP in 1997, we paid for it with a cigarette tax. We continue that funding source. We increase the federal tax on cigarettes by 61 cents…Increasing the cigarette tax will discourage smoking, particularly among teens. And that will be good for kids, too… Now it’s time for us to act. For the benefit of children and infants, let us provide strength. For the benefit of children, let us extend health care coverage. For the benefit of children, let us pass this CHIP bill.”
“Too many children in America don’t have health care coverage,” said Ranking Member Charles Grassley (R-IA). He continued, “This bill will reduce those numbers by 2.7 million. It does so in a way that’s cost-effective and uses appropriate targeted policies…Our bipartisan package makes some very important improvements to bring SCHIP back in line with its core mission. First, the package focuses SCHIP dollars back on children…Adding adults to SCHIP should have never been allowed. It was wrong when the Clinton Administration started it…Second, we’ve fixed the funding formula. We’ve figured out a way to make sure there won’t be shortfalls in the future. Our proposal gives states the resources they need to cover kids, and then it creates incentives aimed at encouraging states to cover the poorest of kids. Third, we’ve compromised on the total funding for this program.” Sen. Grassley concluded, “The $35 billion we are investing in children’s health coverage over the next five years is a drop in the bucket. It’s one quarter of one percent of the $14 trillion that…will be spent on health care in the United States between now and 2012. This bill doesn’t include everything on everyone’s wish list. I worked hard for a responsible bipartisan agreement because I want to see a bill pass, and I think we’ve done a good job.”
The draft measure would authorize $9.125 billion in FY2008, $10.675 billion in FY2009, $11.85 billion in FY2010, $13.75 billion in FY2011, and $3.5 billion in FY2012. A one-time appropriation of $12.5 billion would be available to the Secretary of Health and Human Services for FY2012.
The bill would prohibit new waivers to cover non-pregnant childless adults. States that already have a waiver in place to cover childless adults would be permitted to continue coverage through FY2009, after which time they would be required to submit a continuation request to the Centers for Medicare and Medicaid. Similarly, the bill would prohibit new waivers to cover the parents of eligible children. However, states with existing waivers would be permitted to continue to cover the parents of eligible children for FY2010-2012 under certain conditions.
States would be allowed to provide optional coverage to pregnant women with incomes of at least 185 percent of the federal poverty level. Pregnancy-related assistance available under SCHIP would include all medical assistance available to a pregnant woman under Medicaid and would provide coverage during a 60-day postpartum period. The bill would presume that any child born to an eligible woman is eligible for SCHIP or Medicaid and would provide health care coverage until the child’s first birthday; thereafter, the woman would have to apply for Medicaid or SCHIP for the child.
The bill would establish a new grant program for state, local, and tribal governments, community or public health organizations, faith-based organizations, and elementary and secondary schools to finance outreach and enrollment efforts to target underserved populations, including Native American children, children who reside in rural areas, racial and ethnic minorities, and those with cultural and linguistic barriers to enrollment. The grant program would be authorized at $100 million per year for FY2008-2012.
The increase in SCHIP spending would be offset by increasing the federal tax on cigarettes by 61 cents to one dollar per pack. The increase would take effect December 31, 2007.
