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Financial Planning > UHNW Client Services > Family Office News

SCHIP Veto Override Vote Fails

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The House on Oct. 18 failed to override President Bush’s veto of legislation substantively expanding the State Children’s Health Insurance Plan. The effort to override failed, 273-156, meaning that the Senate will not vote on the override.

The decision likely sets up continued negotiations between the two sides on the issue. The current program expires Nov. 16.

In a last-minute but futile plea to persuade reluctant Republicans to abandon President Bush, House Speaker Nancy Pelosi, D-Cal., said, “The President is isolated in this, don’t join him in his isolation.”

Closing the two-hour debate for Republicans, Minority Leader John Boehner, R-Ohio, said, President Bush vetoed this bill “because we [Congress] didn’t put poor children first.”

He argued that Republicans voted “no” because they “haven’t been afforded the opportunity to sit down together” to prepare a compromise bill. “I hope that the opportunity to sit down and work together comes today after this vote,” he said.

The legislation the president vetoed would have increased the program by $35 billion over 5 years, to $60 billion, and covered an estimated 10 million people. The program that expired Sept. 30 authorized $25 billion in spending over 5 years.

Democrats say the increased costs would be paid for by a 61-cent increase in the tax on tobacco products.

President Bush has proposed increasing the program by $1 billion a year for 5 years. Bush said on Oct. 17 that he vetoed the bill because it would “encourage people to move from private medicine to the public.”

But in a May report, the Congressional Budget Office said that in order to serve the same number of people currently enrolled in the program would cost $13.4 billion over 5 years, for total funding of $38.4 billion between 2008 to 2012.

Part of the reason is rising medical costs, the CBO said.

Authorization for the current program expired Sept. 30, at the end of the last fiscal year. But the current program has been extended until Nov. 16 to facilitate debate over a new bill.

Under the current bill, states could receive the full federal matching rate to cover children from families earning as much as three times the poverty level, or $61,950 for a family of four. States seeking to cover families with higher incomes would receive a less favorable federal matching rate. In either case, states would have to receive approval from the administration to raise their eligibility levels that high.

About 70% of those who gain or retain coverage under the bill would be from families earning less than 200% of the poverty level, according to an analysis by the Urban Institute, which includes an assumption that some states would raise eligibility levels.

Also on Oct. 17, New York Governor Eliot Spitzer said he was willing to accept new language in the SCHIP bill that would eliminate the state’s ability to cover children at 400% of the federal poverty level.

“Of course, we’re willing to compromise,” he said in a briefing with House Ways and Means Chairman Charles Rangel, D-N.Y.

Opponents of the bill have seized on New York’s request to cover children at 400% of poverty–or families of 4 with$83,000 annual incomes–as proof the bill liberalizes the program beyond insuring the poor.

Spitzer and Rangel said New York’s proposal would have required families at 400% of poverty to contribute $1,440 annually to obtain the health coverage.


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