Professional News
AMA Debates Coverage in SCHIP Legislation
Psychiatric News
Volume 42 Number 24 page 5-5

Legislation widely regarded as successful in extending health insurance to children has become captive in what appears to be an ideological tussle over" government controlled" health care.

At press time, a compromise version of a bill reauthorizing and expanding the State Children's Health Insurance Program (SCHIP)—drafted in the wake of President Bush's veto of an original bill in October—was still being negotiated. The compromise bill (HR 3963) was passed by both the Senate and House in early November but without enough votes to override another presidential veto (Psychiatric News, November 16).


And the White House has already promised to veto the bill.

"Today, the Senate passed another SCHIP bill with major flaws, especially its failure to cover poor children first," stated White House Press Secretary Dana Perino on the White House Web site on November 1." Congress has known for weeks that the president would veto this bill... .Like the previous bill, this bill also shifts children with private insurance onto the government rolls, uses taxpayers' dollars to subsidize middle-class families, and raises taxes. It does all this while costing even more over the next five years than the version the president previously vetoed.

"Whatever the administration's policy differences with Congress, the president strongly supports reauthorizing SCHIP. Congress should address the serious flaws in this bill and produce legislation that puts poor children first and does not raise taxes."

At issue specifically are upper-income eligibility limits for the program. Republicans want to limit eligibility to children with family incomes up to 300 percent of the federal poverty level; Democrats have balked at doing so. The president and Republican opponents have said expanding SCHIP coverage is liable to "crowd out" the private insurance market, causing children who have private insurance to be moved into the public program.

In fact, the compromise bill as written at press time does deny funding to states for new SCHIP coverage of children with effective family incomes that exceed 300 percent of the federal poverty level, though states that want to extend SCHIP coverage to families with incomes over 300 percent of the poverty level can submit a waiver application that must be approved by the federal government. A waiver application must include details of state efforts to ameliorate the problem of private insurance "crowd out." States can also cover targeted low-income pregnant women if certain conditions are met.

Moreover, the bill limits the federal matching rate for states that want to expand eligibility to children whose family incomes exceed 300 percent of the poverty level and establishes financial incentives for states to enroll children whose family incomes fall below 200 percent of the poverty level.


The original SCHIP legislation, passed in 1997 with a 10-year sunset provision, provided insurance for children with family incomes up to 200 percent of the federal poverty level. At press time, funding for SCHIP was scheduled to end on December 14.

The fight over expanding eligibility for a government-subsidized program that all sides agree has been successful appears to reflect the tensions produced by anything that looks or smells like "government-controlled health care."FIG1

Anchor for JumpAnchor for Jump

Child psychiatrist Louis Kraus, M.D., a member of the Section Council on Psychiatry, testifies in support of advocating for passage of the compromise SCHIP legislation. 

Credit: Mark Moran

It was an anxiety that made itself felt during last month's meeting of the AMA House of Delegates in Honolulu, a meeting largely devoted to issues related to health system reform (see Medicare Payment Reform Urgently Needed, AMA Says).

At the meeting, a resolution brought by physicians from Florida called on the AMA to support reauthorization of SCHIP for children only and to set eligibility at an upper family income limit of 200 percent of the federal poverty level. These children would then be transitioned to insurance coverage through a system of tax subsidies and vouchers, as envisioned in the AMA health system reform proposal.

The resolution claimed that in some states SCHIP has been used to insure more adults than children and that the bill for reauthorization" envisioned large, unsustainable tax increases on Americans to pay for the expanded entitlement."

In reference committee hearings, David McKalip, M.D., a delegate from Florida, said that the AMA should not support expanding the role of the government in paying for health care.

"This will drive children from good private insurance plans to government-sponsored plans that pay doctors less than the costs of the care they provide," he said. "Already there are access-to-care problems when doctors aren't paid for their services. The AMA should advocate that we reauthorize SCHIP as is and confine it to those who need it—poor children. The current bill will allow children above 200 percent of the [federal povery level] and adults to receive taxpayer funding for health care."

The resolution was defeated, but not without impassioned debate. In his opening address, AMA President Ron Davis, M.D., decried the fact that SCHIP was "stewing in the most partisan environment I've ever seen" and called for speedy passage of the compromise legislation.

Moreover, he refuted the notion that SCHIP is a step toward government-controlled health care.

"SCHIP is a public-private partnership with 77 percent of kids in the program getting their coverage through private health plans. Let me ask you this," Davis said to delegates, "if the SCHIP legislation is socialized medicine, why is Sen. Orrin Hatch supporting it?

"I don't know about you, but I can no longer stomach roller-coaster rides. So let's get SCHIP off Washington's roller coaster, so children from low-income families will have secure and reliable access to health care."

In reference committee hearings, child psychiatrist Louis Kraus, M.D., a member of the Section Council on Psychiatry and a delegate from the American Academy of Child and Adolescent Psychiatry, urged defeat of the Florida resolution. "Many children are in need of medical and mental health services, and a program such as SCHIP is an important starting place," he said.

Kraus is the Woman's Board Professor of Child and Adolescent Psychiatry and chief of the Department of Child and Adolescent Psychiatry at Rush University Medical Center in Chicago.

Anchor for JumpAnchor for Jump

Child psychiatrist Louis Kraus, M.D., a member of the Section Council on Psychiatry, testifies in support of advocating for passage of the compromise SCHIP legislation. 

Credit: Mark Moran

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