Senate Committee Passes SCHIP Reauthorization Bill

The Senate Finance Committee has approved a $35 billion expansion of the State Children's Health Insurance Program, or SCHIP, as part of a five-year reauthorization bill that would bring an estimated 3.3 million more recipients into the SCHIP program. But that $35 billion increase is less than the $50 billion expansion approved under the congressional budget resolution earlier this year.

The bipartisan Senate bill, S. Con. Res. 21, (at the Library of Congress' THOMAS Web site, type "S Con Res 21" in the search bar after selecting "Bill Number") would increase federal SCHIP funding from $25 billion to $60 billion by 2012, raising program eligibility standards from 200 percent to 300 percent of the federal poverty level and providing coverage to approximately 10 million children. It would, however, phase out coverage of childless adults during the next two years and reduce enhanced federal matching rates for states that exceed coverage limits of 300 percent of the poverty level. States exceeding SCHIP coverage limits would receive the same matching rate as Medicaid.

SCHIP, a joint federal and state program, currently provides health care coverage for about 6 million low-income children and 600,000 adults -- primarily the parents of SCHIP or Medicaid-enrolled children and pregnant women. SCHIP recipients are not poor enough to qualify for Medicaid, but they are unable to afford private insurance. The program is set to expire on Sept. 30 without congressional reauthorization.

The Senate bill, which was developed by Sens. Max Baucus, D-Mont.; Charles Grassley, R-Iowa; Jay Rockefeller, D-W.Va.; and Orrin Hatch, R-Utah, would finance SCHIP expansion through a 61-cent-per-pack increase in tobacco taxes, hiking the cigarette tax to $1 per pack.

Meanwhile, the House Energy and Commerce Committee and the House Ways and Means Committee are preparing to release a $50 billion SCHIP reauthorization bill that reportedly will use a combination of tobacco tax increases and reductions in federal funding for Medicare Advantage Plans to pay for the expansion.

President Bush has vowed to veto any legislation that would substantially expand SCHIP. Bush proposed a $5 billion increase for SCHIP reauthorization during the next five years in the administration's 2008 fiscal year budget, an amount the Congressional Budget Office and the Center on Budget and Policy Priorities both found insufficient to maintain current enrollment. In a July 17 letter to the Senate Finance Committee, HHS Secretary Michael Leavitt said that SCHIP "serves as a valuable safety net for children in families who don't have the means to purchase affordable health care." However, he added, "If this legislation were presented to the president as it is currently proposed, the president would veto it."