Senate Finance Committee leaders are urging colleagues in charge of drafting the chamber’s fiscal 2008 budget resolution to include funding for expansion of the State Children’s Health Insurance Program. The budget plan also should fund expanded efforts to enroll low-income Medicare beneficiaries in the program’s prescription drug benefit and to protect rural areas from underpayment by Medicare, committee chairman Max Baucus, D-Mont., and Charles E. Grassley, R-Iowa, said in a “views and estimates” letter sent Friday to the Senate Budget Committee.

Congressional committees are required to submit the letters annually to their chamber’s budget committee. Budget committee leaders use their own discretion on following the advice they receive. While the Finance Committee’s letter is signed both by its chairman and ranking minority member, committees often submit separate majority and minority views.

Grassley’s backing for SCHIP expansion is notable because considerable Republican support will be required to get legislation passed in the Senate. Other GOP senators, including Orrin G. Hatch of Utah and Gordon H. Smith of Oregon, also have called for expanding the program, which now has an enrollment of about 6 million. Analysts say 9 million children are uninsured, 6 million of whom are eligible for the SCHIP or Medicaid programs but haven’t been enrolled.

While the call for expanded coverage through reauthorization of SCHIP, which expires Sept. 30, strikes a tentative note, its call for funding to preserve existing levels of enrollment is emphatic.

Baucus and Grassley wrote “we hope to expand coverage to uninsured children,” adding that “to these ends, we hope that there would be sufficient flexibility in the budget to accommodate the need” to expand. Senate Budget Chairman Kent Conrad, D-N.D., has said he intends to propose that the resolution include funds to expand SCHIP, but hasn’t specified how much more he wants to spend.

The Finance leaders also note there will be shortfalls in funding at current levels of enrollment and are forceful in asking for funds to plug those gaps.

“Additional funding will be necessary to address the projected SCHIP shortfalls over the next five years,” they wrote. “By 2012, the Congressional Research Service projects that 35 states will lack sufficient federal SCHIP funds to meet their demands for coverage. Substantial resources will be needed in order to maintain current services for individuals now covered under SCHIP, including children, pregnant women, parents and other adults.”

The two rural-state lawmakers also expressed concern that despite sharp funding increases for rural hospitals in the Medicare overhaul law (PL 108-173), “aggregate rural hospital Medicare margins remain negative. The latest Medicare Payment Advisory Commission [data] shows that rural hospitals had an average Medicare margin of negative 4.6 percent in 2004,” they said.

Disparities between negative rural margins and positive margins in urban areas “require further examination, and changes may be needed to improve payment accuracy.”

The letter also notes that modifying the Medicare physician payment formula to “mollify” projected cuts next year “will have a substantial budget impact.” Extending an exceptions process for the Medicare cap on rehabilitation therapy services also will have a budgetary impact, they add.

Three-fourths of all Medicare beneficiaries still unenrolled in the program’s drug benefit qualify for the added coverage provided to those with low incomes, the letter notes. “For this reason, we should consider investing more in outreach programs” and eliminating or revising asset tests to enable more low-income beneficiaries to qualify for the extra help, the senators said.

They also noted that doctors and hospitals in rural areas might need more financial assistance “if a truly national health information network is to be achieved.”

Meanwhile, Democrats on the Veterans’ Affairs panels told the Budget committees that more funding is needed for veterans’ medical care, with the Senate seeking an increase twice that sought by the House. The administration requested $34.2 billion for Veterans Affairs medical care; the House panel suggests boosting that figure by $1.3 billion, while its Senate counterpart seeks $2.8 billion more.

Views and Estimates Letters:

• Senate Finance Committee (pdf)

• Veterans’ Affairs (pdf)