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Children's Advocates Voice Anxiety About SCHIP Renewal

By Alex Wayne, CQ Staff

June 13, 2007 -- Congress is not proceeding on a renewal of children's health insurance as quickly as some advocates would like, causing worries that the program might expire.

Democrats and child advocates have made renewing the State Children's Health Insurance Program (SCHIP) a top priority this year. Created in 1997, it covers about 6 million children and more than 600,000 adults, at a cost of about $4 billion per year. Without congressional action, it will expire Sept. 30, though Congress would likely pass a temporary extension if it cannot agree on a permanent renewal.

Democratic congressional leaders have been discussing a $50 billion expansion of SCHIP, and several leading Democrats have introduced bills that would make the program a permanent and growing fixture of the government (S 1224, S 895, S 1364 HR 1535, HR 2147). But none of the bills has yet been considered by any committee, and Congress has a crowded calendar ahead, including annual spending bills and continued debate over the Iraq War.

Senate Finance Chairman Max Baucus, D-Mont., who will control an SCHIP renewal in his chamber, said Tuesday that he planned for his committee to vote on a bill before Congress breaks for its July Fourth recess. But he was not more specific.

"There had been a hope that there would be a markup a little bit earlier in June," said Jocelyn Guyer, deputy director of the Center for Children and Families at Georgetown University, during a conference call with reporters. The nonpartisan center advocates for SCHIP's expansion.

Support for an SCHIP expansion is widespread; Congress included $50 billion extra for the program, over five years, in its budget resolution (S Con Res 21). The bigger problem is how to pay for it. Under Democratic pay-as-you-go rules, new spending has to be offset with spending reductions or tax increases. Baucus said he has not decided how to offset an SCHIP expansion.

"We'll find a good way," he said.

The most commonly discussed proposals are either an increase in the federal cigarette tax or a reduction of payments to insurers who offer private health plans to Medicare-eligible seniors, known as Medicare Advantage plans. Republican Finance Committee members Gordon H. Smith of Oregon and Orrin G. Hatch of Utah have both endorsed a cigarette tax to pay for SCHIP, while the independent Congressional Budget Office and Medicare Payment Advisory Commission have both said that Medicare Advantage plans are paid about 12 percent more per beneficiary, on average, than traditional Medicare costs.

Georgetown's Center for Children and Families, meanwhile, released two reports Wednesday intended to influence the SCHIP debate.

The first warned that President Bush's proposal to limit enrollment in SCHIP to children from families earning no more than twice the federal poverty level could lead to as many as two-thirds of states scaling back coverage and "hundreds of thousands" of children losing their insurance.

Under current law, states have considerable flexibility to set eligibility for SCHIP, and can gain even more by seeking a waiver from the federal government. Some states allow families earning greater than triple the poverty level to enroll their children in the program. Bush's proposal, which he has not detailed, would appear to restrict that flexibility.

However, Bush's proposal is almost certain never to become law, as Democratic proposals to renew SCHIP all preserve or increase states' power to set eligibility.

The second report concludes that Congress should focus in an SCHIP renewal on expanding efforts to enroll children already eligible for the program, or for Medicaid.

About 9 million children in the country are estimated to be without health insurance, and two-thirds of them are thought to be eligible for SCHIP or Medicaid but unenrolled.

"If Congress wants to use an SCHIP reauthorization to cover more of America's children, the most important thing it can do is strengthen efforts to cover children already eligible for Medicaid or SCHIP," Guyer said.

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