Known nationally as the State Children's Health Insurance Program -- in California as Healthy Families -- the plan started as an attempt to salvage something positive from the rancorous collapse of the 1990s national healthcare reform debate. States got generous federal matching funds and flexibility to design their own coverage.
At first, the program was aimed at uninsured children whose parents earned too much to qualify for coverage under Medicaid but too little to afford private coverage. The goal was to reach families earning up to twice the federal poverty level, now about $41,000 for a family of four. The vast majority of children covered by the program are still in that category.
However, as healthcare costs soared, states began to grapple with knowing that many families -- especially in urban areas where the cost of living is higher than average -- had trouble paying for private insurance even though they earned more than twice the poverty level.
Fourteen states now have higher eligibility cutoffs. The pending bill would allow states to go to three times the poverty level, about $60,000 for a family of four.
Conservative Sen. Orrin G. Hatch (R-Utah), one of the creators of the original program, said that was well short of providing what the White House said it feared: government-financed healthcare for the middle class.
He joined forces with liberal senators such as Edward M. Kennedy (D-Mass.) and John D. "Jay" Rockefeller (D-W.Va.) to push the compromise.
"The administration [is] making it clear they do not want it to be morphed into one-size-fits-all government healthcare, but to be honest with you, this bill doesn't do that," Hatch said. "I believe the president has had bad advice on this, but I understand the president's desire to keep spending under control."
Health economist Len Nichols of the nonpartisan New America Foundation said he thought a lot of Republicans were "perplexed by the White House stand on this issue."
Funding for the program has cost about $5 billion a year. Bush wants to increase it by an average of $1 billion a year over the next five years. Independent analysts say that's not enough to sustain the current caseload.
Congress wants to add $35 billion over five years by raising tobacco taxes. That would sustain the current caseload and cover 3 million to 4 million more children. About 9 million are currently uninsured nationwide.
