Bills: HR 3162, HR 976

Outlook: Both chambers have passed bills to expand the federal health insurance program for low-income children. President Bush has threatened a veto, though lawmakers might be able to write a final bill that would gain enough support to either dissuade or override him. Because differences between the House and Senate measures are so great, however, it is not clear whether a final bill will be sent to the president before the program expires on Sept. 30.

Synopsis: It seemed at the beginning of the year that if any legislation was likely to get bipartisan backing, children’s health insurance was a good candidate. The State Children’s Health Insurance Program (SCHIP), created 10 years ago as a joint federal-state insurance system for low-income children, covers about 6 million kids and a few hundred thousand adults and is widely credited with increasing insurance coverage for children. Without congressional action, the program will expire at the end of the fiscal year.

Both Republicans and Democrats said at the start of the session that renewing SCHIP would be a priority, and several lawmakers from each party joined together to offer legislation. But the comity did not last.

Democrats made room in their budget resolution (S Con Res 21) for a $50 billion expansion of SCHIP over five years, which would triple total spending to $75 billion. Bush said he would oppose an expansion of that scope, proposing in his budget to spend $30 billion over the next five years. The president subsequently issued veto threats against both a Senate bill that would expand SCHIP spending by $35 billion and a House bill that combined a nearly $50 billion expansion with cuts to Medicare Advantage, a Republican-favored program in which insurers, rather than the government, provide benefits to seniors.

The development of both bills was arduous. In the Senate, a small group of Finance Committee members met privately for months trying to determine how large an expansion they could agree on and how to pay for it. Finance Chairman Max Baucus, D-Mont., was finally able to produce a consensus bill, cosponsored by Republicans Charles E. Grassley of Iowa and Orrin G. Hatch of Utah, after limiting the expansion to $35 billion, capping eligibility at three times the federal poverty level and phasing out coverage of most adults — a practice increasingly allowed by the Bush administration but criticized by Grassley and other Republicans.

In the House, Democratic leaders wrote their own bill without Republican input. Energy and Commerce Chairman John D. Dingell, D-Mich., said he was not inclined to work with Republicans on the legislation after House GOP leaders said they would back a presidential veto.

Republicans responded to being shut out of negotiations by using parliamentary tactics to slow the legislation’s progress. Joe L. Barton of Texas, the ranking Republican on Energy and Commerce, was able to prevent the panel from debating or voting on the bill by demanding that the committee’s clerk read the 465-page measure aloud. Dingell ultimately gave up and had the bill discharged from his committee. The Ways and Means Committee approved the bill on a party-line vote in the early morning hours of July 27.

The House bill is far broader than the Senate measure. Along with an SCHIP expansion that exceeds the growth in the Senate bill, it would make many changes to Medicare, including the Medicare Advantage cuts. It also would reverse a scheduled cut in Medicare reimbursement rates for physicians, something for which doctors and their powerful trade association, the American Medical Association, annually lobby.

Both bills include increases to tobacco taxes to pay for SCHIP expansion. The Senate measure would raise the cigarette tax by 61 cents, to $1 per pack, while the House bill would raise it by 45 cents, to 84 cents per pack. The House bill would make up for its smaller tobacco tax increase with the Medicare Advantage cuts, which would provide more than $150 billion over the next 10 years, according to the Congressional Budget Office.

Legislative Action:

House passed HR 3162 (H Rept 110-284, Part 1), 225-204, on Aug. 1.

Senate passed HR 976, amended, 68-31, on Aug. 2.

Related Stories: House, Senate passage, CQ Weekly p. 2374; House panels stall, p. 2279; Senate committee action, p. 2201; background, p. 2178; SCHIP’s creation (PL 105-33), 1997 Almanac p. 2-47.