CQ TODAY
June 1, 2007 – 5:52 p.m.
Democrats Aim to Spend Billions on Kids’ Health

No matter how Congress renews it, the State Children’s Health Insurance Program is about to become a major consumer of taxpayers’ dollars.

The 10-year-old program, set to expire in September, is a top priority for Democrats. As of May, five senior Democrats had introduced three proposals to ensure that SCHIP is not only renewed but expanded.

The bills vary in some key areas, most notably in the amount of money each would dedicate to the program and how to pay for it. But the proposals share a common theme: Each would set SCHIP on a steep growth curve, promising that the government will pay billions more to provide health insurance to children.

“After 10 years, and given SCHIP’s strong track record, there is an apparent decision that it makes sense to keep this program around permanently and to strengthen it,” said Jocelyn Guyer, deputy executive director at Georgetown University’s Center for Children and Families, a nonpartisan think tank that supports SCHIP’s expansion.

SCHIP is a joint state-federal effort, similar to the much larger Medicaid program. It covers about 6 million children and about 600,000 adults.

Like Medicaid, SCHIP is not subject to the annual appropriations process. But unlike Medicaid, SCHIP is not considered an entitlement program because its spending is not linked to the number of people enrolled.

When it was created in 1997, as part of a budget bill (PL 105-33), Congress allocated about $40 billion for SCHIP to be spent over 10 years, with a Sept. 30, 2007, expiration date.

But each of the measures that would renew the program would dispense with a sunset provision and allow SCHIP’s spending to grow with the cost of health care and the number of children in the country.

That pattern concerns some conservatives.

“I view that the Democrats really want to make this an entitlement,” said Joseph R. Antos, a health policy expert at the conservative American Enterprise Institute. “They want to make it permanent; they want to lock in the high rates of growth we’re going to see if we don’t do something about inefficiencies in the health system; and they’re not very much interested in looking at how that SCHIP money is being spent and whether there’s a better way that doesn’t require so much money.”

The same concerns are seldom voiced by congressional Republicans, however; they’re wary of being accused by their electoral rivals of opposing children’s health care.

Indeed, some Republicans support two of the proposals: one by Democratic Sen. John D. Rockefeller IV of West Virginia (S 1224) and one by Democratic Rep. Rahm Emanuel of Illinois (HR 2147).

Bipartisan Senate Bill

Rockefeller negotiated his bill with Olympia J. Snowe of Maine, a moderate Republican who is the chief cosponsor. Rockefeller believes that much of the language in his legislation will wind up in a measure that Senate Finance Chairman Max Baucus, D-Mont., plans to have his committee approve in June, said Steven Broderick, Rockefeller’s spokesman.

Under Rockefeller’s legislation, spending on SCHIP would grow to $15.4 billion per year by 2012 and then increase each subsequent year at a rate pegged to the growth of health care costs and the population of children.

Broderick said Rockefeller and Snowe believe that their legislation is the only proposal that would fit within the fiscal 2008 budget resolution (S Con Res 21), which carves out $50 billion over five years for an SCHIP expansion. By comparison, competing legislation introduced by House Energy and Commerce Chairman John D. Dingell, D-Mich., might cost “well over $50 billion,” Broderick said. (None of the bills have been analyzed by the Congressional Budget Office, which issues official cost “scores” for legislation.)

Dingell’s bill (HR 1535) is notable not only because his committee would approve any House SCHIP renewal but also because Hillary Rodham Clinton, D-N.Y., a leading presidential contender, has introduced an identical measure (S 895) in the Senate.

The Dingell-Clinton legislation essentially would provide states enough SCHIP money to cover as many children as they can enroll. It would allow states to expand eligibility to families earning 400 percent of the federal poverty level, or $82,600 for a family of four — a third higher than the limit in the Rockefeller-Snowe legislation.

Dingell and Clinton also included provisions absent in other legislation: States could subsidize children’s insurance provided by employers and allow families that aren’t eligible for SCHIP to buy into the program.

They have said their intent is to provide every child in the country with health insurance. About 9 million children are currently not covered, the Kaiser Family Foundation estimates.

An Entitlement for Children

Critics of the Dingell-Clinton legislation, including some Democrats, see it turning SCHIP into an open-ended entitlement, traditionally defined as a program in which anyone eligible is entitled to the benefit and spending is directly linked to the number of people enrolled. For that reason, Dingell’s measure is seen as unlikely to pass the Senate.

“I think of that bill as much more of a long-term vision bill,” said Georgetown’s Guyer. “I’m not sure it’s necessarily the road map for the next six weeks. In some respects, Rockefeller-Snowe was aimed at what can get through the Senate.”

A Dingell aide disputed the notion that the bill would turn SCHIP into an entitlement for children, although the aide noted that the program is already considered an entitlement to states.

Emanuel’s SCHIP proposal has been introduced in the Senate (S 1364) by his Democratic colleague Richard J. Durbin of Illinois, a state seen as a national leader for children’s health insurance. Illinois leaders have aggressively expanded enrollment in SCHIP, Guyer said.

Emanuel’s bill entails a smaller expansion of SCHIP than the other two proposals but would couple it with a tax credit for middle-class families earning up to 350 percent of the poverty level.

Unlike the other measures, Emanuel’s included a provision to pay for the expansion.

Brokers would be required to report to the government what their customers pay for stocks, bonds and other securities, to improve the collection of capital gains taxes. His aides estimate that the proposal would raise $17 billion extra per year.

Durbin’s version does not include the tax credit or capital gains provisions. Both bills would provide SCHIP $7.5 billion per year, plus increases linked to growth in health care spending and child population.

Source: CQ Today
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