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Saving SCHIP

The Senate's plan to fund health insurance for poor kids is modest but might stand up to a Bush veto.

September 07, 2007

In a perfect world, Congress would pass the House's reauthorization of the State Children's Health Insurance Program by an overwhelming majority. Unfortunately, seeing as the 6.6 million children in the program have to deal with reality -- particularly the threat of losing enrollment if SCHIP isn't renewed by Sept. 30 -- it's clear that any bill that reaches the president's desk would have to garner sufficient bipartisan support to stand up to Bush's threatened veto. The more modest Senate version could.

Authorized in 1997, the state-administered SCHIP provides coverage for children whose families don't qualify for Medicaid but can't afford private insurance. It's been highly successful -- since the program started, the number of uninsured children has dropped by nearly a fourth. Now it's up for renewal, and the Congressional Budget Office estimates that the $25-billion program needs $14 billion more over the next five years just to keep covering current enrollees, let alone reach more of the nation's nearly 9 million uninsured children. Bush is willing to pony up $5 billion. That's tantamount to a cut.

Luckily, unlike Bush, many Republican members of Congress are up for reelection. Senate Republicans have set the increase ceiling at $35 billion -- that's as far as the Finance Committee could stretch a tobacco tax increase, the only source of funding both sides could agree upon. But limited though it is, the Senate bill has one big plus: Enough Republicans backed it that it passed 68 to 31, enough to override a veto.

The House bill would rely less on tobacco taxes and make up the difference by reducing funds for private healthcare under Medicare Advantage. Its bottom line hits almost $90 billion, as it addresses a shopping list of healthcare programs besides SCHIP. One costly item saves Medicare physicians' fees from a scheduled 10% cut. This double whammy -- cutting private programs and protecting public ones -- had Republicans crying "socialized medicine." That's absurd but effective: The bill passed by a largely party-line vote of 225 to 204, hardly an ironclad majority.

Now Republicans are blocking Senate nominations to a conference committee, and Democrats are suggesting a temporary extension of the program. Both are losing perspective.

Note to Democrats: Stop trying to use the SCHIP bill to save Medicare fees. It's SCHIP that needs the attention. Use the Senate's higher tobacco tax, and only that tax, to fund the program. If those of you in the House still want to give Medicare Advantage's private plans a haircut, fine, but do it in another bill, and make it a modest trim. Also, keep those funds in-house -- use them to buffer the effects of the Medicare fee cuts. Such a plan may still bother some Republicans, but it would be cheaper and less politically explosive.

A smaller, more realistic SCHIP bill is better than a late bill, or no bill at all.

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