House Democrats To Unveil SCHIP Draft Legislation That Includes Changes To Medicare

Main Category: Health Insurance / Medical Insurance
Also Included In: Pediatrics / Children's Health;  Medicare / Medicaid / SCHIP
Article Date: 25 Jul 2007 - 19:00 PST

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House Democrats on Sunday announced that they will unveil draft legislation within the next several days that would increase SCHIP funding by $50 billion over five years and make revisions to Medicare, the New York Times reports. The House legislation, called the Children's Health and Medicare Protection Act, would increase tobacco taxes and cut Medicare payments to private Medicare Advantage plans to reauthorize and expand SCHIP, according to the Times. The House bill also would reverse a scheduled cut in Medicare payments to physicians and provide a modest increase in fees for each of the next two years.

In addition, the legislation would:

• Simplify the Medicare application process and relax the current asset limits;
  
  
• Allow the HHS secretary to expand Medicare coverage of preventive screenings;
  
  
• Pay primary care physicians to coordinate the care of some traditional Medicare beneficiaries;
  
  
• Abolish a provision of the 2003 Medicare law that mandates the president propose changes in Medicare to limit the program's reliance on general revenue;
  
  
• Give state insurance commissioners more power to regulate the marketing of private MA plans by agents and brokers; and
  
  
• Reduce payments to private MA plans, which are estimated to be 12% higher than payments for the traditional program for equivalent benefits (Pear, New York Times, 7/23).
  

However, House Democrats from rural states and urban areas "have expressed concern that cuts to [MA] plans could hurt members in their districts," according to CQ HealthBeat. In addition, other conservative Democrats are opposing a tobacco tax increase at a similar level as legislation approved by the Senate Finance Committee last week (Carey, CQ HealthBeat, 7/20).

The Senate bill would increase five-year funding for SCHIP by $35 billion to $60 billion by raising the federal cigarette tax from 39 cents to $1 per pack. President Bush has proposed a $5 billion increase over five years for SCHIP, which would increase the program's total five-year funding to $30 billion. Bush has said that he would veto the Senate bill (Kaiser Daily Health Policy Report, 7/20).

The House bill "promises to intensify the battle with the White House over health care," although House Democrats say that by including changes to Medicare, "they have built a strong intergenerational coalition that could help them overcome a presidential veto," the Times reports. House Democrats said they expect to consider the bill next week (New York Times, 7/23).

NGA
In related news, the National Governors Association on Sunday passed a resolution urging Congress to reauthorize SCHIP before it expires on Sept. 30, the Detroit Free Press reports (Gray, Detroit Free Press, 7/22). In a letter sent to congressional leaders and Bush, the governors called for the reauthorization of the program with a guarantee that states be allowed flexibility in designing the program. However, the governors did not endorse a specific funding level for the reauthorization or "explicitly endorse" raising the cigarette tax to fund SCHIP, according to the Washington Post.

The governors wrote that "the authorization for this critical safety net program will soon expire, and urgent action is needed to ensure its continued success for the next five years." The governors added, "For many reasons, defaulting to a series of temporary extensions of the program would be untenable for states and the millions of children who rely upon the program." In addition, the governors wrote, "We are encouraged by the Senate Finance Committee efforts to move a bipartisan reauthorization bill that provides increased funding and reflects the general philosophy that state flexibility and options and incentives for the states are preferable to mandates."

The letter, which was drafted and approved at the association's annual summer meeting, was signed by Govs. Janet Napolitano (D-Ariz.), chair of NGA; Jon Corzine (D-N.J.), chair of the association's Health and Human Services Committee; Tim Pawlenty (R-Minn.), vice chair of NGA; and Jim Douglas (R-Vt.), vice chair of the committee (Broder, Washington Post, 7/23). Gov. Jim Douglas (R-Vt.) said, "It's important for [governors] to speak with one voice," adding that the association does not "have a consensus on the tobacco tax. We're just interested in adequate funding and flexibility for the states" (Detroit Free Press, 7/22).

The letter is available online.

Ad Campaign
Meanwhile, AARP and the American Medical Association on Monday will launch a $1.3 million advertising campaign to lobby for the passage of the House and Senate versions of SCHIP reauthorization and expansion legislation, CongressDaily reports. The ads will air in the national media as well as targeted districts for about two weeks and will feature direct mail and meetings with lawmakers in their districts.

According to the ads, the House bill "preserves access for Medicare patients and limits seniors' out-of-pocket costs," and "strengthens Medicare and ensures funds are used wisely, and extends health care for millions of uninsured children." The ad campaign also criticizes tobacco and health insurance companies that oppose the bills. The ads states, "Powerful special interests are making misleading claims about critical health care reform facing America" (Leonatti, CongressDaily, 7/20).

Veto Override
Bush "could face a first in his presidency": a veto override, if he vetoes SCHIP reauthorization legislation, the Los Angeles Times reports. According to the Times, there is a "good chance" that Republicans would join Democrats to override a veto, in part because Democrats could use Bush's veto to "tar GOP incumbents in next year's elections" (Alonso-Zaldivar, Los Angeles Times, 7/22). Rep. Fred Upton (R-Mich.) said that Bush's veto "will really force the two sides to get together."

Sen. Gordon Smith (R-Ore.) said that many Republicans are "very nervous," adding, "On the one hand, you've got the veto threat. On the other hand is the political importance of expanding health care for children. This is public policy broadly supported by the American people" (Johnson, CongressDaily, 7/23). Sen. Orrin Hatch (R-Utah) said that SCHIP legislation "accomplishes what we have set out to do -- to take care of the children" despite its costs (Struglinski, Salt Lake City Deseret Morning News, 7/20).

NPR's "All Things Considered" on Saturday reported on the debate over SCHIP reauthorization. The segment includes comments from Sen. Trent Lott (R-Miss.), Senate Finance Committee Chair Max Baucus (D-Mont.), Sen. Chuck Grassley (R-Iowa) and a cigar store owner (Rovner, "All Things Considered," NPR, 7/21). Audio of the segment is available online.

Opinion Piece, Editorial

• Sen. John Kerry (D-Mass.), Boston Herald: The Senate proposal of $35 billion over five years does "far too little" to provide health insurance to children but is a "good start," Kerry writes in a Herald opinion piece. Kerry writes that $50 billion over five years would be a "better option." He continues, "America stands behind our children, and Democrats in Congress should not bend to pressure from the White House, Republicans or special interests" (Kerry, Boston Herald, 7/23).
  
  
• New York Times: Bush has threatened to veto SCHIP "on the bizarre theory that expanding it would be the 'beginning salvo' in establishing a government-run health care system," according to a Times editorial. If more revenue is needed to fund SCHIP, the House "should consider a new tax on alcohol, which would also have health benefits, or a reduction in the large subsidies paid to private health plans to participate in Medicare," the editorial continues. It concludes, "The important thing is to cover as many uninsured children as politically feasible and hang the ideological warfare" (New York Times, 7/22).
  

"Reprinted with permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation . © 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.