SCHIP Reauthorization Behind Schedule

The State Children's Health Insurance Program (SCHIP) was passed by Congress in 1997 as Title XXI of the Social Security Act. The program provides health coverage to millions of children living in families with incomes are too high to qualify for Medicaid but not high enough to purchase other forms of health insurance. SCHIP is jointly financed by the States and Federal Government, but is operated by the States. The program has been very successful.

According to a Families USA report written by Jennifer Sullivan, and Rachel Klein,

SCHIP, together with Medicaid, has served an extremely important role for children: Between 1998 and 2005, the number of uninsured children dropped by more than 2.7 million This decrease is remarkable in light of the growth in child poverty and a significant decline in the number of children whose families had job-based health insurance during that time. Experts agree that expanded coverage for children through SCHIP and Medicaid is responsible for this good news. SCHIP is vital to improving children’s health care. Children enrolled in SCHIP or Medicaid are three times more likely to have a usual source of care than uninsured children. And children enrolled in SCHIP or Medicaid are one-and-a-half times more likely than uninsured children to receive well-child care, see a doctor during the year, and get dental care. SCHIP reduces the percent of children with an unmet health care need.4 Clearly, SCHIP and Medicaid are critical programs that allow otherwise uninsured children to get the health services they need.

Despite these steps forward, there are still 9 million uninsured children in this country. More than 6 million of them are eligible for SCHIP or Medicaid but are not enrolled. Although states around the nation are poised to build on the success of SCHIP and Medicaid and cover more uninsured children, many states are stuck with too little SCHIP funding to continue the progress they have made. In 2007 alone, 14 states are experiencing federal SCHIP funding “shortfalls,” and the problem is only expected to get worse with each passing year. Current law assumes that the federal government will provide $25 billion for SCHIP over the next five years. This represents a flat funding rate that does not even provide for any increases to account for inflation or population growth. Without additional funding, more than 1.5 million children could lose SCHIP coverage.

Missouri, my home state, covers children with family incomes up to 300 percent of poverty. In 2007 that means it provides coverage for children in a family of three whose income is less than $51,510. In 2006, the program covered 106,577 Missouri children. Sadly in my state 121,442 children remain uninsured. Most of the uninsured are eligible but their parents don't know how or are unwilling to apply.

SCHIP is a program even conservative governors are proud to crow about. Recently Missouri's Matt Blunt issued a press release describing the budget bill for the remainder of 2007. An increase in SCHIP funding was near the top of his list of accomplishments.

Originally a ten year program, SCHIP is up for renewal. If a bill isn't passed by September 30, millions of kids across the country will lose health coverage. You would think that renewing it would be a no brainer. So did Jay Rockefeller and the other sponsors of S.1224. Unfortunately, S.1224, which was supposed to have been debated and passed by now, has run into a couple of road blocks.

First, in the Alice and Wonderland world of conservative thought SCHIP is considered a gateway to "Socialized Medicine." Late last month Robert Novak wrote a column entitled The end game is socialized medicine for all the 'kids.' Novak begins

There is no need to wait until a new president is elected next year for the great national health care debate. It is under way right now, disguised as a routine extension of an immensely popular, noncontroversial 10-year-old program of providing coverage to poor children. In fact, this proposal is the thin edge of the wedge to achieve the longtime goal of government-supplied universal health insurance and the suffocation of the private system.

Conservative governors, living is the real world, may love the program, but conservative "thinkers," divorced from reality, only see the "slippery slope."

The second roadblock, and probably more of a problem, is H.Res.6 better known as PAYGO. Because the cost of health care is rising rapidly and fewer employers provide health insurance for their low income employers, the government anticipates a significant increase in the cost of the SCHIP program over the next several years. Donny Shaw of Open Congress Blog reports that since

the new Congress established PAYGO budgeting rules for entitlement programs such as SCHIP, they are required to offest the cost of any spending increases for the program. In March, the Senate approved a theoretical plan to increase taxes on cigarette sales for the sole purpose of increasing SCHIP funding. The plan was only theoretical because it was attached as an amendment to the 2008 budget resolution, a bill that sets fiscal goals without any weight of law. . . .

Not surprisingly, the tobacco industry is lobbying hard against the plan. Since they are not the most popular industry, they are publicly taking the position that the tax will hurt the states.

A desire to avoid being seen supporting any tax increase has lead some conservatives to talk about reducing coverage to kids whose family income is 200% of poverty. For a whole lot of children that would be a disaster.

SCHIP is an extremely important program and without doubt it will be reauthorized, but the reauthorization process might be loud and painful.