ScienceWeek

New England Journal of Medicine

Published at www.nejm.org October 18, 2007 (10.1056/NEJMp0706881)

ScienceWeek http://scienceweek.com/2007/071028i.htm

The Fate of SCHIP - Surrogate Marker for Health Care Ideology?

John K. Iglehart

To appreciate the power of the U.S. presidency - even when its current occupant's approval rating is only 31% - one need look no further than the political brawl over the State Children's Health Insurance Program (SCHIP). On October 3, 2007, President George W. Bush vetoed legislation that would have reauthorized SCHIP for 5 years, asserting that it was too expensive and would lead down a path to socialized medicine. On October 18, despite pleas by Democrats and some senior Republican legislators, the House failed to garner the necessary two-thirds vote to override Bush's veto; the vote count was 273 to 156. In addition to many legislators, a large majority of the public, major private stakeholders, and 43 governors strongly support expansion of the program. By contrast, in an effort to appeal to the conservative base of their party, the leading Republican presidential candidates agreed with Bush's veto - despite the fact that the program, though signed into law by a Democratic president, originated in a bipartisan compromise and was enacted by a Republican-controlled Congress.

A few months ago, reauthorization of SCHIP seemed like a routine matter. Then Bush decided to single it out as a target of the administration's newfound fiscal discipline. The program was created in 1997 to provide coverage to "targeted low-income children" who are uninsured and not eligible for Medicaid - typically, families with incomes up to 200% of the federal poverty level, or about $41,300 for a family of four in 2007. As the cost of private insurance has increased and the number of employers offering it has decreased, the ranks of the uninsured have grown - by 2.2 million in 2006, including 710,000 children, half of them with a family income between 200 and 399% of the poverty level (see bar graph)1 - and government has tried to fill the gap. While 24 states still use SCHIP to cover children with family incomes up to 200% of the poverty level and 8 states set their income thresholds below 200%, the other 18 states have extended their thresholds above 200% - 16 of them to 250% or above. Through waivers approved by the Bush administration, 5 states cover pregnant women under SCHIP, 11 cover parents of enrolled children, and 14 cover other adults. Yet 90% of children enrolled in SCHIP in 2005 still had family incomes at or below 200% of the poverty level (see pie charts).

In his veto message, Bush said, "This bill would shift SCHIP away from its original purpose and turn it into a program that would cover children from some families of four earning almost $83,000 a year. In addition . . . government coverage would displace private health insurance for many children. . . . The bill also does not fully fund all of its new spending, obscuring the true cost of the bill's expansion of SCHIP, and it raises taxes on working Americans." Tellingly, 2 weeks earlier, Bush had described "a philosophical divide . . . over the best approach for health care," noting that "Democratic leaders in Congress want to put more power in the hands of government by expanding federal health care programs. Their SCHIP is an incremental step toward the goal of government-run health care for every American." He contrasted this alleged aim with his proposal for creating tax incentives that encourage Americans to purchase private insurance.2

The measure that Bush vetoed was a compromise based largely on legislation drafted by four senior members of the Senate Finance Committee: Democrats Max Baucus of Montana (chairman) and Jay Rockefeller of West Virginia and Republicans Chuck Grassley of Iowa (ranking minority member) and Orrin Hatch of Utah. Senate Majority Leader Harry Reid (D-NV) persuaded House Speaker Nancy Pelosi (D-CA) that her party caucus should acquiesce to the less expansive Senate version because it had passed by a veto-proof majority. What incensed senators about Bush's veto was the administration's failure to work toward a compromise that would reauthorize SCHIP but combine it with some form of Bush's tax credit - an idea promoted largely by Grassley. When the senators cobbled together a bipartisan compromise, the administration offered no realistic alternative, instead attacking the proposal with ideological arguments and dubious interpretations. In mid-August, the administration further antagonized some legislators and many governors when the Centers for Medicare and Medicaid Services (CMS) released a directive placing new restrictions on states that wanted to continue covering children with family incomes above 250% of the poverty level. The directive was issued late on a Friday (August 17, 2007) without any warning to either Congress, which was in recess, or governors.3,4 On September 10, a group of 44 senators wrote a letter to Bush asserting that the directive represented "a dramatic change in administration policy" and urging him to withdraw it, which he declined to do...

How prominently SCHIP and the health care needs of uninsured children will figure in election-year debates is anybody's guess, but one thing is certain: However the SCHIP saga ends, it will not lay to rest the larger issue of what level of public support uninsured people deserve as our employer-based insurance system continues to erode.

health care
conservative politics
children's health insurance
medicine and politics