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Life Health > Health Insurance > Life Insurance Strategies

Panel Sends CHIP Bill To Senate Floor

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Members of the Senate Finance Committee today voted 17-4 to approve a bill that would reauthorize funding of the Children’s Health Insurance Program for 5 more years.

The bill is a new version, or “chairman’s mark,” of S. 1224, a CHIP reauthorization bill introduced in April by Sens. Edward Kennedy, D-Mass., and Olympia Snowe, R-Maine.

The bill would use an increase in tobacco taxes to increase funding for CHIP to an average of about $12 billion per year for the next 5 years, from the current level of $5 billion per year.

The Bush administration has asked Congress to increase CHIP funding to about $6 billion per year.

The bill approved today would prevent states from making new efforts to use CHIP money to cover childless adults, but it would permit states to continue to cover parents through existing programs at a lower federal match.

Senate Finance Committee members added only one amendment to the CHIP bill during the markup. The amendment, proposed by Sen. Ken Salazar, D-Colo., would improve reimbursement for community health centers.

The current CHIP authorization is set to expire Sept. 30th.

President Bush says he would veto the bill if it reaches his desk in its current form.

“I’m not going to surrender a good and important idea before the debate really gets started,” Bush told the Washington Post, according to an article that appeared in the Post Wednesday. “And I think it’s going to be very important for our allies on Capitol Hill to hear a strong, clear message from me that expansion of government in lieu of making the necessary changes to encourage a consumer-based system is not acceptable.”

The Bush administration has objected to CHIP provisions that permit states to use program funds to cover any childless adults, or to use CHIP funds to cover children from families with relatively high incomes.

The Bush administration also has argued that Congress also should adopt his proposal to cap the group health insurance deduction and provide an equivalent deduction for individuals who buy their own coverage.

Sen. Max Baucus, chairman of the Senate Finance Committee, has said in the past that fewer than 10% of the children covered by CHIP plans live in families earning more than the federal poverty level.

Most of the states that cover children in families with incomes greater than 3 times the federal poverty level are states where the cost of living is particularly high, Baucus says.

Moreover, expanding CHIP should not hurt private insurers, because most states rely on private insurers to run their CHIP plans, Baucus says.

“There are more kids without health insurance than there are kids in the first and second grades,” Baucus said today during a discussion of the bill. “Americans overwhelmingly support getting kids covered.”

Sen. Charles Grassley, R-Iowa, the most senior Republican on the Senate Finance Committee, has written in the past that Bush administration officials have to be realistic about how much they can expect to change the CHIP bill.

“I hope they understand it takes 60 votes to get anything done in the United States Senate,” Grassley said today. “I think we should have ended coverage of all adults…. But we have a compromise proposal, and it’s something I’ve accepted in negotiation.”

The National Association of Health Underwriters, Arlington, Va., has praised the CHIP bill.

The version approved today by the Senate Finance Committee “addresses many of the provisions contained in the original legislation that hindered states from adequately implementing the full range of private health insurance market options available to them,” NAHU Chief Executive Janet Trautwein says in a statement.

“We feel the proposed Senate reauthorization legislation contains many innovative ideas for how we can maximize [CHIP] dollars and enhance beneficiary care and access through better integration with existing private-sector health insurance coverage,” Trautwein says.

“In particular, NAHU appreciates the effort to improve [CHIP]‘s existing public-private partnership structure by removing some current restrictions that have hindered premium-subsidy efforts of employer-sponsored coverage,” Trautwein says.


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