The Bush administration and Congress moved a step closer today toward a major confrontation this month over the future shape of the State Children’s Health Insurance Plan.
Adding intensity to the confrontation, the 5-year authorization of the program expires Sept. 30, the end of the current government fiscal year.
In the latest developments, members of the Senate Finance Committee said they had reached an agreement on a framework for expansion of SCHIP that calls for spending $35 billion on the program over the next five years. The bill will be marked up on July 17th, Sen. Max Baucus, D-Mont., chairman of the panel, said.
At the same time, President Bush again renewed his call in a speech for replacement of the program with tax proposals he has made in the past.
In a fact sheet released while he toured health facilities in Cleveland, the White House said that, “Instead of encouraging people to drop private coverage for government programs, the President believes we should work to make basic private health insurance affordable for all Americans.”
The fact sheet added, that, “The best way to do this is by reforming the tax code to level the playing field so those who buy health insurance on their own get the same tax advantage as those who get health insurance through their jobs.”
But his budget for this year also calls for a modest expansion of the program, which currently costs $5 billion annually, by adding $5 billion to $7 billion over 5 years.
Under the bipartisan agreement in the Senate, the expansion would cost $35 billion over five years. The expansion would be funded with a 61-cent increase in the 39-cent federal cigarette tax, to an even $1 per pack.
This is far short of the $50 billion increase sought by Democratic congressional leaders and included in the congressional budget resolution passed earlier this year.
Democratic leaders in the House plan to vote on legislation implementing their plan the week of July 24th.
Besides the increase in the tobacco tax, the Democratic House leadership proposed to pay for their major increase in the program by cutting the Medicare Advantage program offered by private insurers.