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