KWAME HOLMAN: One of the major provisions in the balanced budget bill President Clinton signed this month was a $24 billion program to provide health insurance to uninsured children.
PRESIDENT CLINTON: Because we have acted millions of children all across this country will be able to get medicine and have their sight and hearing tested and see dentists and doctors for the first time.
KWAME HOLMAN: The Census Bureau estimates 10 million children in the United States have no health insurance. The vast majority are in low to moderate income families, who earn just a little too much qualify for Medicaid. Nearly a third are children eligible for Medicaid but who have not been enrolled. According to health experts, uninsured children seldom get any medical care until they become sick enough to be brought to a hospital emergency room. The President first suggested a child health care plan in his State of the Union address in January. He asked Congress for $16 billion to cover children through a combination of private insurance and expanding the Medicaid program. Then Republican Sen. Orrin Hatch and Democrat Edward Kennedy introduced a bill that would give states block grants to insure children.
SEN. ORRIN HATCH, (R) Utah: Parents should not have to decide whether to buy health insurance for their children or put food on the table.
KWAME HOLMAN: But the Hatch-Kennedy bill also took the controversial step of funding children's health insurance through an increase in the federal cigarette tax from 24 to 43 cents per pack. President Clinton ultimately embraced that funding mechanism. And it was included in his budget agreement with congressional Republicans announced May 2nd. Meanwhile, taxing tobacco to fund children's health insurance drew support from a coalition of 250 groups, ranging from the Children's Defense Fund to the Girl Scouts of America. In nationwide radio and newspaper ads the groups called on members of Congress to choose between Joe Camel and four-year-old Joey.
AD SPOKESPERSON: I also heard about a plan by Republicans and Democrats that would mean coverage for all uninsured children. It's paid for by a 43 cent cigarette tax, so children get health care and fewer teenagers smoke.
KWAME HOLMAN: Several key Republican leaders in Congress initially were cool to tobacco taxes but gradually support for the idea grew. In June, the Senate passed a $24 billion child health insurance plan funded in part by a 20 cents a pack increase in the cigarette tax.
PRESIDENT CLINTON: Let me say that this 20-cent increase in the cigarette tax not only will provide necessary resources to protect and improve children's health. By raising the price of cigarettes it will discourage children from starting to smoke in the first place.
KWAME HOLMAN: When the final budget agreement was signed into law this month, it included the $24 billion over the next five years for children's health insurance funded in part by a 15 cent per pack increase in the cigarette tax. Under the new law states would be given the money in block grants and would design their own child health insurance programs. But states would be required to offer children enrollment in one of the following: the state Medicaid program, a plan equivalent to a major private insurer's or a government employee's health plan, or a direct service contract with doctors and hospitals.