President Expected to Veto Measure That Would Provide Coverage to an Additional 3.3 Million Children
On July 19, by a vote of 17 to 4—including votes by six Republicans who voted along with all the Democrats—the U.S. Senate Finance Committee passed key legislation reauthorizing the State Children's Health Insurance Program (SCHIP), which is set to expire on September 30, 2007. While the Senate had originally approved a $50 billion package in a budget resolution adopted earlier this year, the package that the Committee will send to the Senate floor before the August recess is estimated to cost about $35 billion and is fully funded through a sizable increase to the Federal tobacco tax by 61 cents per pack.

Key Features: Key features of the Senate's bill include extending health insurance coverage to an additional 3.3 million uninsured children. Specifically, children living in families with incomes lower than 300% of the Federal poverty level (FPL) would now be eligible to enroll. Previously, enrollment was limited to those children in families at less than 200% of the FPL. States such as New York that have already passed laws expanding the program beyond 300% (up to 400% of the FPL in NYS) will be grandfathered in and will be able to continue their expansions as planned with the enhanced SCHIP Federal match rate.

Under the Senate's carefully crafted bipartisan proposal, states will have the option to cover pregnant women, and those states currently covering childless adults will be required to move those individuals to Medicaid. The funding formula has also been changed to allow states the option of receiving funding based on projected expenditures, which will keep New York from facing serious shortfalls that had been expected next year and every year going forward under the old formula. 

The White House has objected to the sizable expansion of the program and has threatened to veto the measure since it is significantly above the President's budgeted request of $5 billion. Conservative Republicans have similarly expressed their concerns, viewing the program's expansion as a harbinger of universal health coverage.

The six Republicans who voted for the bill included its co-sponsors—Senate Finance ranking member Charles Grassley (IA) and Senators Olympia Snow (ME), Orrin Hatch (UT), and Gordon Smith (OR)—along with Senators Pat Roberts (KS) and Mike Crapo (ID). The July 19 CongressDaily reported that Senate Finance Committee Chairman Max Baucus said that many Republicans who favor the program will "vote their own conscience."

House Activity: House of Representatives committees are expected to take up their SCHIP legislation this week, which will also contain key Medicare and Medicaid provisions, including an effort to prevent the 10% cut in Medicare payments that physicians are facing come January 1, 2008. Since the House package is expected to total nearly $100 billion, hospitals remain at risk for payment reductions to help offset the cost of the proposal due to Congress's "pay-go" rules. These rules require that any new spending must be paid for through cuts to entitlement programs or increases in tax revenue.

GNYHA's Response: GNYHA will continue to aggressively urge lawmakers to protect critical payments to hospitals, to address issues facing inpatient rehabilitation facilities (in the form of the "75% rule"), and to extend a wage index reclassification program created under the Medicare Modernization Act known as Section 508. GNYHA has also been advocating for a one-year extension of the Medicaid moratorium that protects public and teaching hospitals from devastating regulations already issued by the Administration.