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Senate Republican Leadership to Seek Reconsideration Of SCHIP Plan That Would Fail To Make Progress In Covering Uninsured Children |
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From Center on Budget and Policy Priorities: Senator Mitch McConnell, the Senate Minority Leader, plans to ask for reconsideration of the SCHIP legislation that he and Senate Minority Whip Trent Lott offered as an alternative during Senate floor debate on SCHIP on August 1. In contrast to the bipartisan SCHIP bill the Senate and House approved last month but the President vetoed, which the Congressional Budget Office estimates would cover 3.8 million children who otherwise would be uninsured, the plan that Senator McConnell intends to offer again would not make any progress in reducing the number of uninsured low-income children. The Congressional Budget Office estimates that if SCHIP funding remains frozen at the current level of $5 billion per year, states will face a federal funding shortfall of $13.4 billion over the next five years (fiscal years 2008-2012).[2] CBO estimates that by 2012, some 35 states would have insufficient federal funding to maintain their current programs, and the number of children and pregnant women enrolled in an average month would fall well below today's level. CBO also estimates that the bipartisan SCHIP legislation that the Senate and House approved would fully avert these shortfalls and thereby prevent 700,000 children from losing their SCHIP coverage and becoming uninsured by 2012. Because some of these funds would be inefficiently distributed among states, the plan would leave federal funding shortfalls in more than one-third of the states by 2012. Eleven additional states use their flexibility under SCHIP on how to measure income to disregard income used for certain purposes, such as child care costs, and as a result enable some children with gross incomes above 200 percent of the poverty line to qualify. The McConnell legislation would effectively prohibit all of these states from continuing to cover SCHIP-eligible children in families with gross incomes above 200 percent of the poverty line. Under the plan, "income disregards" would be eliminated. In addition, states would only be able to claim the lower federal Medicaid matching rate (which averages 57 percent, compared to the federal SCHIP matching rate, which averages 70 percent) for children in families with incomes above 200 percent of the poverty line who are already enrolled. In fact, the CBO estimates of the original Lott-McConnell proposal indicate that about 200,000 children who would otherwise be covered through SCHIP in 2012 would instead be uninsured, due to these restrictions. The plan also would effectively prohibit the relatively small number of states now using SCHIP funds to provide health insurance to some low-income parents of children enrolled in Medicaid or SCHIP from continuing to do so. In response to a question posed during the Senate Finance Committee's consideration of SCHIP legislation on July 19, Congressional Budget Office director Peter Orszag explained that "restricting eligibility to parents does have an effect on take up among children.... Both the bipartisan children's health legislation approved by the Senate and House include new tools to help states find and enroll more of these eligible, uninsured low-income children. For example, the bipartisan bill includes an "Express Lane" state option to allow SCHIP and Medicaid agencies to use income information collected by other benefit programs to streamline the enrollment process. 2152) are identical to those in the Lott-McConnell amendment (S. The new version omits several non-SCHIP provisions that would preempt state health insurance laws and expand Health Savings Accounts. See Congressional Budget Office, "Fact Sheet for CBO's March 2007 Baseline: State Children's Health Insurance Program," February 23, 2007 and Edwin Park, "CBO Estimates That States Will Face Federal SCHIP Shortfalls of $13.4 Billion Over Next Five Years," Center on Budget and Policy Priorities, February 26, 2007. Because of substantially higher SCHIP spending projections reported by states in the most recent SCHIP expenditure data from August 2007, the total federal funding shortfall would likely be significantly larger than what CBO previously estimated in March 2007. Congressional Budget Office, "Preliminary CBO Estimate of Changes in SCHIP and Medicaid Enrollment under the Kids First Act of 2007," August 1, 2007. Since August, CBO has reduced its estimate of the number of uninsured children who gain coverage when states are provided sufficient funding to maintain their current programs from 800,000 to 700,000. When it originally estimated the enrollment effects of the Lott-McConnell plan in August, CBO estimated a coverage gain of 700,000 --- or 100,000 short of the 800,000 who would be covered if current state SCHIP programs are maintained. It is likely that CBO would now reestimate a coverage gain of 600,000 under the McConnell legislation, which would then continue to fall short by 100,000 children of the gains simply from maintaining current SCHIP programs. These estimates come from the Center on Budget and Policy Priorities' SCHIP expenditure model, which is based on the model developed by the actuaries at the Center for Medicare and Medicaid Services at the U.S. Department of Health and Human Services. The estimates measure how short states would fall of the funding they would need to maintain their current SCHIP programs, with current state participation rates and eligibility criteria. See also Leighton Ku, "Collateral Damage: Children Can Lose Coverage When Their Parents Lose Health Insurance," Center on Budget and Policy Priorities, September 17, 2007. The legislation approved by the Senate and the House would move the coverage of parents under existing SCHIP waivers outside of SCHIP in 2010, and lower the federal matching rate for covering such parents starting in 2011. It would set the reduced matching rate halfway between the SCHIP and Medicaid matching rates.
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