Expanding Health Care

Monday, July 30, 2007

THE HOUSE health-care bill unveiled last week has two noteworthy innovations. It would focus additional federal health-care spending on ensuring that poor children eligible for coverage actually receive it. And it would end expensive and unnecessary subsidies for managed-care programs for seniors while making new efforts to help the poorest seniors -- an approach that will be the subject of a separate editorial. The measure faces a daunting political path, both because of its high price tag and because of the financing mechanism, a combination of higher tobacco taxes and lower payments to managed-care plans. But the priorities it reflects are those that lawmakers -- and the Bush administration -- should keep in mind as the debate progresses.

The launching point for the House effort is the need to reauthorize the State Children's Health Insurance Program (SCHIP), a joint federal-state program that provides coverage to children in low-income families that earn too much to qualify for Medicaid. The 10-year-old program expires in September. The House would spend an additional $50 billion over five years, while a bipartisan Senate measure mandates $35 billion. President Bush has threatened to veto even the smaller Senate measure. Instead, he has proposed just $4.8 billion in extra spending above the $25 billion that straight reauthorization would cost -- an amount that would fail even to retain the number of children already covered.

Whatever the precisely right amount of spending may be, the Senate measure, and, in an even more focused way, the House version, concentrate on something that Mr. Bush has said he supports: enrolling children who are already eligible for Medicaid or SCHIP but who are not yet covered. This eligible but unenrolled population represents about 6 million of the 9 million children without health insurance at some point during the year.

The House bill would set aside nearly $11 billion for incentive payments to states that do a good job boosting these enrollments; it focuses on getting states to sign up the poorest, Medicaid-eligible kids. The Congressional Budget Office estimates that, under the House bill, in 2012, about 5 million children who would not otherwise have insurance would be covered; of those, 3 million would be on Medicaid. This would represent an impressive reduction in the more than 4 million children currently eligible for Medicaid but not enrolled. The controversy over renewing SCHIP has largely centered on authorizing or expanding coverage for children higher up the income scale, above 200 percent of the poverty level. The administration argues that providing coverage above this level -- $34,340 for a family of three -- would simply shift children from private coverage onto the government dole. Certainly, this is a risk, but so is the threat of children without insurance because of rising premiums and dropped coverage. The poverty level is set nationwide, so that a family at 200 percent of poverty in a high-cost state could easily be unable to afford insurance.

House Republicans say they, too, want to concentrate on enrolling poor children. But they fail to provide enough money to do so effectively. Republicans have a competing proposal to extend the program, but it wouldn't provide enough to keep it going at current levels. Do House Republicans really want to be arguing for taking away health insurance from children who now have it?


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