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Supporters of Child Insurance Bill Fear Deadlock, Back Less Ambitious Plan

By Alex Wayne, CQ Staff

November 30, 2007 -- States and child advocates are pressing Congress to abandon its troubled efforts to reauthorize children's health insurance and instead focus on a short-term extension, out of concern money is running short.

For most of this year, lawmakers have been debating an expansion of the State Children's Health Insurance Program, or SCHIP, which covers about 6 million children whose families are low income but not poor enough to qualify for Medicaid.

Democrats want to expand the program by $35 billion over five years, to $60 billion—enough, they say, to cover 10 million children. But they have been opposed by President Bush, who has vetoed one bill (HR 976), and House Republicans, who have backed Bush and sustained his veto.

Democrats negotiated with House Republicans for two weeks before the Thanksgiving recess, trying to reach agreement on changes to a second bill (HR 3963) that would satisfy enough in the minority to override another Bush veto.

However, the talks broke down after Republicans proposed including federal eligibility limits on Medicaid, an idea Democrats strongly oppose.

States and child advocates are increasingly worried about running out of money. A continuing resolution (PL 110-116) that has kept money flowing into SCHIP at fiscal 2007 levels expires Dec. 14.

"We've been working on the broader bill all year long," said Lisa Shapiro, vice president for health policy at First Focus, a child advocacy group. "Basically, we think they've run out of time."

Pressure Builds
Officially, congressional leaders say they intend to continue work on a renewal and expansion of SCHIP, and that there are no plans for an extension of current law. "We are still working on a reauthorization," said Stacey Bernards, a spokeswoman for House Majority Leader Steny H. Hoyer, D-Md.

But lawmakers are under pressure.

The Congressional Research Service (CRS) reported Oct. 25 that 21 states face combined shortages of $1.6 billion in their children's health insurance programs this year.

The first of those states will run out of money in March, and they—along with child advocates—want an SCHIP extension that runs at least a year and provides enough money to cover the shortfalls.

On Nov. 27, 25 senators representing 16 of those states sent a letter to Senate leaders asking them to pass a "fully funded" long-term extension if a reauthorization agreement is not reached by Dec. 14. "Otherwise, health care coverage for children across the nation will be at serious risk," the senators wrote.

Without extra money to cover their shortages, states will strip coverage from about 1.6 million children, CRS estimated.

Some House Democrats have proposed extending SCHIP until the end of fiscal 2008—Sept. 30—just in time to raise the issue again before the November elections. Shapiro said a two-year extension is also under discussion in the Senate.

But Congress might have as much difficulty with an extension as it has had with a full reauthorization. The sticking points in this year's debate have been less over money and more over policy changes advocated by Republicans.

For example, under current law several states have won permission from the federal government to cover adults under SCHIP. Many Republicans want those adults kicked out of the program, and no more enrolled.

Republicans also want tighter restrictions on immigrants enrolling in the program, and caps on eligibility, so middle-income families cannot drop private insurance and enroll their children in SCHIP instead.

Those issues could arise during debate on an extension.

Democrats, meanwhile, want to negate a policy implemented by the president on Aug. 17 for states to meet new requirements before expanding SCHIP to families making more than twice the poverty level, or about $41,000 for a family of four.

Chiefly, under the new rule, states must assure the government they are covering 95 percent of their children under that level before opening SCHIP to families earning more. State officials have complained about the rule, saying it is impossible to meet the requirements.

But if Democrats seek to negate the policy in an extension, Bush would likely use his veto power, just as he has with the full reauthorization.

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