Despite a new veto threat from the White House, Democrats in the House pushed through legislation on August 1 that calls for a $50 billion expansion of the State Children's Health Insurance Plan.
The legislation also calls for increases in doctors' payments under Medicare and other expansions of the Medicare program. The vote was 225-204 after a bitter debate over several days that included raised voices and efforts by Republicans to use parliamentary maneuvers to delay a vote.
The bill is H.R. 3162, the Children's Health and Medicare Protection Act (CHAMP).
Among its most controversial features is the use of a phaseout over 4 years of the 12% differential given to providers in the private Medicare Advantage program to help pay for the program.
Another controversial feature of the House bill is a provision creating a continuing study on the "comparative effectiveness" of health care. After the first 3 years, this program would be funded by a per-capita tax on every individual covered by health insurance (see story below).
A 45 cent increase in the federal tobacco tax is also being used to fund the House version of SCHIP expansion.
Democrats would also impose other cutbacks, toughen reporting mandates and add consumer protection provisions for those enrolled in the Medicare Advantage program under the bill.
John Greene, a lobbyist for the National Association of Health Insurers, Arlington, Va., called these provisions "overkill" because NAHU and other health insurance groups are already working with the National Association of Insurance Commissioners to develop programs and practices designed to root out unscrupulous marketing practices.
The bill will now have to be reconciled with similar, but more modest, legislation that was expected to be finalized in the Senate before its scheduled departure for a month-long recess on Aug. 3.
The Senate bill calls for a $35 billion increase in the program, and doesn't touch the Medicare Advantage program. The Senate bill would be financed by a larger 61 cent increase in the federal tobacco tax.
The MA program was crafted as part of the 2003 Medicare Modernization Act. The major part of that bill was creating a prescription drug benefit under Medicare.
That sets the stage for a bitter debate in September over reconciliation of the two bills because the SCHIP authorization legislation expires Sept. 30, the end of the current fiscal year.
As the bill was nearing passage, the Bush administration weighed in with a new veto threat, saying the legislation "clearly favors government-run health care over private health insurance" and spends far too much money.
Overhanging the administration position and that of Republicans in both the House and Senate is a concern that the SCHIP expansion is another step in crowding out private health insurance.
In the debate on the House floor, Rep. Jim McCrery, R-La., ranking minority member of the House Ways and Means Committee, noted, "This is not just about helping low-income children."
"This bill today seems to be spending government funds to lure middle class, upper middle class, even wealthy, perhaps, families, to opt out of private health coverage and go to government health coverage," he said.
Regarding the higher cost of the Medicare Advantage program provided by private insurers, Rep. John D. Dingell, D-Mich., chairman of the Energy and Commerce Committee, called the overpayments "a great injustice" and said Democrats were determined to "stop that evil practice."
