American College of Physicians: Internal Medicine — Doctors for Adults ®


SCHIP debate gives preview to ’08 presidential campaign

From the September ACP Observer, copyright 2007 by the American College of Physicians.

Many have wondered when the United States will again have a national discussion on how to provide health insurance coverage to all.

The answer is that this discussion has already started, in the context of the debate in Washington over re-authorization of the State Children’s Health Insurance Program (SCHIP). In staking out positions on SCHIP, Democratic and Republican lawmakers are previewing the broader issues that will be debated in the 2008 congressional and presidential elections. The SCHIP debate suggests that the philosophical disagreements over the role of government, private insurance and taxes remain as contentious as they were a decade ago, when those differences led to defeat of the Clinton health care plan.

The stakes for internists are higher than the immediate issues of whether a consensus can be reached on SCHIP reauthorization. In the House of Representatives, legislation to halt Medicare physician payment cuts has been coupled with the SCHIP reauthorization, meaning that the fate of the SCHIP bill may determine whether or not physicians get a reprieve from a 10% Medicare fee cut on Jan. 1.

Competing bills

In August, the House of Representatives voted on the Childrens’ Health and Medicare Protection Act (CHAMP) of 2007. The bill would increase funding for the SCHIP program by $50 billion over five years, an increase of $25 billion over current SCHIP funding levels. It would allow states to cover all children who are currently eligible for the program but not enrolled and allow more children from lower-income families (but above the federal poverty level) to join it.

The bill would also replace expected Medicare payment cuts of 10% in 2008, and a 5% cut in 2009, with positive increases of at least 0.5% each year. The higher updates will cost the federal government $20 billion over the next five years compared with current Medicare expenditure levels. The House package would be paid for by raising taxes on tobacco by 45 cents a pack, and by eliminating subsidies that pay Medicare Advantage plans an average of 12% more than fee-for-service physicians are paid for treating the same patient.

ACP supports the CHAMP bill because it is the best vehicle for addressing the Medicare physician payment cuts, and the changes in SCHIP are consistent with College policy on expanding health insurance coverage. The College also supports increasing tobacco taxes as a matter of good health care and budget policy, as well as leveling the playing field in payments to Medicare Advantage plans and fee-for-service physicians.

The Senate approved a bipartisan bill to increase SCHIP funding by $35 billion over five years, bringing the total to $60 billion. Its sponsors estimate that the bill would cover 3.3 million currently uninsured children, including: 900,000 uninsured SCHIP eligible kids, 1.8 million Medicaid-eligible kids, and 600,000 more children who are currently not eligible. It would also protect 1.9 million kids who would lose coverage under current funding levels and restore Medicaid to 200,000 children who lost it because of strict citizen documentation requirements imposed by a previous Congress.

The bill pays for the expanded SCHIP coverage by raising the tobacco tax by 61 cents, raising the total federal tax on a pack of cigarettes to $1. The Senate bill does not include any provisions or money to block the Medicare physician payment cut or reductions in overpayments to Medicare Advantage plans.

Competing visions

From a philosophical and practical perspective, the CHAMP bill goes much farther than the Senate in bringing more children into SCHIP, including millions of children from working families with incomes that are above the Federal Poverty Level but who have trouble affording good coverage through the private insurance market. The Senate bill is a more cautious and incremental approach that would liberalize coverage but focus principally on poorer children.

Both bills, however, are worlds apart from President Bush’s vision of the role of government in providing access to health care. The President proposes to increase funding for SCHIP by $12 billion over five years. The non-partisan Congressional Budget Office estimates that under the President’s budget, enrollment would increase from its current 7.4 million people to 8.3 million people in 2007 and then fall to 6.7 million enrollees by 2012.

President Bush’s disagreement with the Senate and House bills is more about philosophy than money, however. He has said that both the Senate and House bills would spend too much, raise taxes, and lead to government-run health care, promising to veto them if they pass Congress.

Instead, the President proposed tax subsidies to help people buy private insurance coverage. The President also expressed opposition to what he called a “massive tax increase” on the American people, apparently referring to the tobacco tax increase, even though that increase applies only to those who continue to smoke.

There we go again

So there you have it, echoes of the same philosophical and ideological divides that led to the defeat of the Clinton health care plan. Arguments about rationing, big government, big insurance, big tobacco, no new taxes, consumer choice and waiting lines are issues that have been debated for decades now and yet seem no closer to resolution.

The 2008 elections may determine whether the electorate is able to select from the different visions for health care reform and give a mandate for comprehensive reform to a new President and Congress. In the meantime, though, this Congress and this President will have to find a way to reauthorize the SCHIP program before it expires, and to avert imminent Medicare cuts that will be devastating to seniors.


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