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The S-CHIP Debate
Sick child
October 19, 2007

In 1997, Congress authorized the State Children's Health Insurance Program, or S-CHIP, to supply health insurance to families with incomes too high to qualify for Medicaid but too low to purchase private insurance. At a cost of approximately $5 billion per year, the program currently provides about 6.6 million low-income children with subsidized health care. According to the Congressional Research Service, the current $5 billion budget will not be enough for 21 states to maintain present coverage over the next year.

The Children's Health Insurance Program Reauthorization Act of 2007, CHIPRA, was a bipartisan attempt to extend S-CHIP and increase its funding by $35 billion over the next five years. It was to be funded by a 61 cent increase in the federal tax on cigarettes. CHIPRA sailed through the Senate with a veto-proof 67-29 majority, but did not pass the House with enough support to override President Bush's veto on October 3rd.

"Congress's plan would transform a program for poor children into one that covers children in some households with incomes up to $83,000," President Bush said in a radio address. Additionally, White House secretary Dana Perino said the President wished to avoid "additional government-run health care, socialized-type medicine."

President Bush argued that CHIPRA would offer coverage to middle income families who could afford private insurance, violating the original intent of S-CHIP and crowding business out of the market. In CHIPRA's place, the President proposed a $5 billion increase to S-CHIP's current levels of funding over the next five years. Critics of the Bush plan charge that his proposed incrase is inadequate, pointing to a recent analysis from the Congressional Budget Office that the program requires at least $14 billion in additional funds over the next five years to maintain current levels of coverage.

According to Georgetown University's Center for Children and Families, over 90% of children enrolled in S-CHIP are from families with incomes below 200% of the federal poverty level. They also say that 84% of the nearly 4 million uninsured children that CHIPRA would cover are from low-income families already eligible for S-CHIP., other media watchdog groups, and the Kaiser Family Foundation have pointed out that, with the potential exception of New York state, no one making $83,000 a year would be eligible for SCHIP under the reauthorization proposals.

Additionally, CHIPRA sets in place regulations forbidding federal money from going towards children from families with incomes above 300% unless most low-income children are covered. Only two states, New Jersey and New York, have passed legislation raising the limit above 300%.

In addition to worries over the "socializing of medicine" some lawmakers argued against the tax hike that would fund the bill. Others object to a change in paperwork requirements they said would make the program vulnerable to fraud from illegal aliens. The debate remains heated: THE WEEKLY STANDARD called it "The S-CHIP of Fools," laying out a strategy for opponents: "First, you go negative and criticize the bill as 'welfare for the middle class,' which it is. Second, you go positive and offer an alternative. Third, you go big picture and show how an expanded S-CHIP program is inconsistent with the kind of health care system most Americans want."

Supporters of the bill fired back amidst a vigorous advertising effort to sway public opinion and potential swing votes in the House. "This bill is not socialized medicine," Republican Senator Charles Grassley said, "Screaming socialized medicine is like shouting 'fire' in a crowded theater. It is intended to cause hysteria that diverts people from reading the bill, looking at the facts."

Following a vote on October 18th that fell thirteen 'yea's short of overriding President Bush's veto, supporters of CHIPRA vowed to revive the bill, but with some revisions and "tweaks" to attract more political support. A week later, on October 25th, the House held another vote, this time on a revised version that supporters said addressed the opposing Republicans' objections.

"To be a great nation, we have to take care of the health of our children," Democratic Speaker of the House Nancy Pelosi said. "It should almost go without saying, but it doesn't. There is every compassionate, humanitarian, motherly, fatherly, and family reason to be for this legislation. It also makes good economic sense."

But many Republicans said that the revision process had been rushed and failed to substantively address their original concerns. "This new bill puts lipstick on a sow," said New York Republican representative Thomas Reynolds. "Today is raw politics - trotting out a vote just for the sake of a vote."

The bill again failed to reach a veto-proof two thirds majority. Twenty-six congressmen who had voted on the previous CHIPRA bill were not present for the vote, but this version gained no new Republicans actually lost one who voted for the previous bill.

In the face of another likely Bush veto, congressional Democrats suggested that they might extend the current S-CHIP budget until next summer and force another showdown shortly before the 2008 elections.

Published on November 2, 2007

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References and Reading:
U.S. Department of Health and Human Services' SCHIP web portal
The official government resource for information on the original SCHIP program.

The Kaiser Foundation's Resource on Medicaid & SCHIP
Includes various in-depth studies and analyses of SCHIP and the proposed CHIPRA legislation.

Georgetown University Health Policy Institute's Center for Children and Families
Includes more information about the text and logistics of SCHIP and CHIPRA.

"Children In The Balance", The Economist 10-4-07
"Mr Bush balked for several reasons. He said that expansion would mean shifting the programme's focus away from poor children. Better off parents might be tempted to drop their private coverage in lieu of the government option, nudging the country down the dangerous road to nationalised care."

"State Children's Health Insurance Program News"
THE NEW YORK TIMES' continuously updated newswire on the latest news regarding SCHIP.

"S-Chip of Fools,"Fred Barnes, THE WEEKLY STANDARD, Fred Barnes
A conservative critique of the proposed CHIPRA expansion of SCHIP.

"Beating Back S-Chip," THE NATIONAL REVIEW ONLINE, October 18, 2007
Another conservative critique of CHIPRA.

"Gunfight at the S-Chip Corral,"THE NEW YORK TIMES, September 25, 2007
Commentary in favor of CHIPRA opposing President Bush's veto.

"The Nation: White House, Lobbyists Team Up Against Child Health Insurance Program "
Commentary from The Nation in favor of SCHIP.

" Bush's False Claims About Children's Health Insurance "
The Annenberg Political Fact Check's take on how political rhetoric regarding SCHIP might not reflect the issues at hand.
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