Senate Panel Approves Huge Tobacco Tax To Fund Child Healthcare

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Main Category: Health Insurance / Medical Insurance
Also Included In: Pediatrics / Children's Health;  Smoking / Quit Smoking
Article Date: 20 Jul 2007 - 0:00 PST

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In an overwhelming majority of 17 to 4, and in defiance of a threatened veto by President Bush, the US Senate Finance Committee approved a bill to expand child healthcare using a large increase in tobacco tax. Most of the Republicans on the Committee joined the Democrats to vote in favour of the bill.

The current legislation for the State Children's Health Insurance Program, SCHIP, is due to expire at the end of September.

If passed by Congress, the new bill would entitle another 3.2 million children in low income families to receive state funded health insurance. These families can't afford medical insurance but don't qualify for Medicaid because their earnings are just above the cut off point.

If passed, the bill would bring the overall number of state insured children to around 10 million.

President Bush has said a number of times he is against the bill because it expands the government's role in healthcare and is financed by a huge tax increase. He favours a system of tax breaks to encourage uninsured people to take up private insurance.

The Senate panel voted to provide an additional 35 billion dollars to finance the expanded program, bringing the total spend to 60 billion over the next five years. President Bush's proposal is for a 5 billion increase to continue the program without expansion, with a total spend of 30 billion over five years.

The committee approved bill calls for a considerable rise in tobacco tax to pay for it. The tax would go up from the current 39 cents to 1.00 dollar on a pack of cigarettes. Cigars would attract an ever greater increase, with premium cigars that are currently taxed at 5 cents being taxed at 10 dollars each.

Senators in favour of the bill said the tobacco tax would also discourage smoking, particularly among teenagers, while those against said the tax was ridiculous.

According to a report by Reuters, Senate Majority Leader, Harry Reid, a Nevada Democrat, said the Senate would approve the bill later this month in defiance of Bush's threat to veto it. He said they were going to fight for it, "This is important", he said.

A New York Times report said that Republican Senator Charles E Grassley of Iowa, co-author of the bill called Bush's plan "unrealistic" and he couldn't see how only a 5 billion dollar increase in SCHIP funding would enable it to continue doing what it did now.

The report quotes another bill co-author Democrat Senator John D. Rockefeller IV of West Virginia as saying that Mr Bush and his health secretary Michael Leavitt were being "pretty belligerent" in their criticism of the bill.

Another proposal in the bill would remove the waivers brought in by the Bush government that allow some states to use money from SCHIP to cover adults who don't have kids.

Republican Senator Pat Roberts of Kansas said the new bill would allow states to help low income families buy private insurance. He said he was "proud" to support the bill.

A new 1.2 million dollar television campaign has been launched by healthcare workers to lobbying support for the legislation in the House. They want Congress to push for higher tobacco taxes as a way to reduce smoking as well as increase health cover for uninsured children.

Getting the bill through the Senate may not be as straightforward as some might imagine. The original proposal in the Senate Committee by the Democrats was for a 50 billion increase, the 35 billion was a compromise. However, the Democrats are adamant about pursuing the original 50 billion, and some are saying that if they try to do this in the Senate it could make the situation very fragile because many Republican Senators will be very nervous about approving a spend that is significantly above what the Finance Committee approved.

"I hope they understand it takes 60 votes to get anything done in the United States Senate," said Sen. Grassley to the Associated Press.

Click here for the full press release from the Senate Finance Committee (PDF reader required).

Written by: Catharine Paddock
Writer: Medical News Today
Copyright: Medical News Today
Not to be reproduced without permission of Medical News Today