September 23, 2007

President Threatens to Veto SCHIP

According to Politico, despite a clear veto threat from President Bush, Democratic and Republican negotiators on Friday announced a breakthrough deal on the children’s health insurance program, agreeing to expand the initiative by $35 billion in an attempt to provide health care to million more uninsured children. The compromise will closely mirror the bipartisan Senate bill, which passed this summer 68-31, with enough support to override an eventual veto (Source).
Created in 1997, SCHIP is a national federal/state health insurance program for low-income children whose families’ incomes are too high to qualify for Medicaid but too low to afford private health insurance, and whose parents count among the nation’s working uninsured. Due in large part to this program, the percentage of low-income children in the United States without health coverage has fallen by one-third, despite the erosion of private health coverage over this period. More than 4 million low-income children, most of whom would otherwise be uninsured, are enrolled in SCHIP.
This remarkable success, however, is now threatened. Unlike Medicaid, an entitlement program whose federal funding increases automatically to compensate for increases in health-care costs (as well as increases in caseloads), SCHIP is a block grant with a fixed annual funding level. Consequently, the federal SCHIP funding that states receive has not been keeping pace with the rising cost of health care or population growth. (Source).
Included in the House version of the legislation is a provision that would allow states—without having to go through a cumbersome waiver process—to expand Medicaid coverage for contraception up to the level of Medicaid coverage for pregnancy-related care. The Congressional Budget Office estimated that the state option to expand family planning likely would produce savings to the federal government of $200 million over five years and $400 million over 10 years (Source). This provision was not included in the original Senate version.
If President Bush vetoes the bill, Congress will extend it temporarily while negotiations continue with the White House.
Want to know more about this issue, read the Kaiser Family Foundation’s SCHIP Reauthorization: Key Questions in the Debate or the opinion in the NY Times.