Congress faces a daunting task in blending two radically different bills expanding the State Children’s Health Insurance Program, one of which is supported by the health insurance industry and the other strongly opposed.

Indeed, one analysts’ group is predicting the current program will be extended for a short period while talks continue on a bill even more modest than the $35 billion increase in SCHIP over 5 years contained in the Senate bill.

Congress will be up against a tight deadline in dealing with the issue because the current 10-year authorization of the program expires Sept. 30. Congress doesn’t return to work until Sept. 4 and has only a few legislative days in September.

The program now receives $5 billion in funding per year.

President Bush is supporting efforts to increase SCHIP spending to an average of $6 billion per year and has threatened to veto both the House and Senate SCHIP bills.

In any event, the more-expensive House bill, which includes a phase-out in the subsidy to the Medicare Advantage program over 4 years, is being strongly panned by health insurers and producers.

For example, the National Association of Health Underwriters voiced “extreme concern” over the House bill saying that funding for SCHIP expansion under the House version “would be on the backs of older Americans.”

In a statement, NAHU CEO Janet Trautwein explained that “seniors all across the country are selecting Medicare Advantage plans in record numbers.

“It is obvious that many of these Medicare beneficiaries prefer a comprehensive approach to insuring the cost of their health care as opposed to traditional fee-for-service Medicare,” she added.

Reducing Medicare Advantage plan funding will force some plans to exit the Medicare Advantage market, “which will limit health care options and be a great disservice to our nation’s senior,” she said.

The Senate bill, Trautwein said, does a much better job of dealing with the “very real and negative effects” of crowding out existing private health insurance.

She added that the Senate SCHIP bill takes a number of steps to improve the option of premium assistance partnerships.

The Senate bill, which passed on July 26, calls for a simple, $35 billion expansion of the current SCHIP program.

The day before, the House voted 225-204 to approve its legislation, H.R. 3162.

The Senate bill passed by a veto-proof 68-31 vote. The Senate SCHIP bill vote puts its sponsors in a strong position to trim the House’s broader bill, Senate Minority Whip Trent Lott, R-Miss., noted before he left Washington for the month’s summer recess.

He said Senate Republicans would block a conference committee until they have assurances that the final bill would be close to the Senate bill.

The House bill adds $50billion to SCHIP and includes Medicare provisions that Senate Finance Committee Chairman Max Baucus, D-Mont., wants to take up separately. “They’re going to have areal job just getting the House to take the Senate position,” Lott said.

Another controversial feature of the House bill is a provision creating a continuing study on the “comparative effectiveness” of health care. After the first 3 years, this program would be funded by a per-capita tax on every individual covered by health insurance.

A 45 cents increase in the federal tobacco tax is also being used to fund the House version of SCHIP expansion.

The House bill would also impose other cutbacks, toughen reporting mandates and add consumer protection provisions for those enrolled in Medicare Advantage.

The cuts to Medicare Advantage included in the House bill were recommended by the Medicare Payment Advisory Commission. But, Republican supporters of the Senate SCHIP bill saythey cannot support those provisions because they were created through the Medicare Modernization Act passed in 2003 that Republicans consider the signature achievement of the Bush administration.

America’s Health Insurance Plans lauded the Senate bill. “The Senate has acted to ensure the health security of millions of low-income children,” said Karen Ignagni, AHIP president and CEO.

AHIP also noted that the “Senate came together in a bipartisan fashion to reauthorize SCHIP without putting at risk the health security of the more than 8 million seniors who depend on Medicare Advantage.”

In a memo to investors on Aug. 7, Tim VandenBerg, Joe Lieber, and Leslie Alperstein of Washington Analysis said, “We doubt President Bush will sign a bill expanding SCHIP and addressing Medicare by the September 30th deadline.” Instead, they said, “We anticipate Congress will temporarily extend SCHIP and pass a further-modified bill during the 4th quarter.”