By Crystal Swann
August 13, 2007

Before leaving for the August Congressional recess, both the House and Senate passed separate bills reauthorizing and expanding the Children’s Health Insurance Program (CHIP), representing the largest increase of any health care program since Medicare. CHIP is a successful program that provides health coverage to low-income, uninsured children whose parents do not qualify for Medicaid, but cannot afford private health insurance.

The House bill, “Children’s Health and Medicare Program Act,” passed by a vote of 225 to 204, would expand the children’s health program by $47 billion over five years and provide coverage to an additional five million children. The bill, which would be paid for by raising the cigarette tax to 45 cents per pack while phasing out Medicare Advantage overpayments, contains many Conference priorities including dental and mental health parity. In a Conference of Mayors press release on the passage of the bill, Palmer stated, “We applaud Speaker [Pelosi] for her leadership and commend the House of Representatives for standing strong for children by voting for a strong children’s health bill.”

Key provisions of the House bill include no limits on income eligibility, new options for states to extend Medicaid and CHIP coverage through age 25, and coverage of pregnant women without a waiver. The bill eliminates coverage for childless adults but allows states currently serving adults to continue under existing waivers. It also allows states to provide coverage to the children of legal immigrants and pregnant women who have been in the US less than five years, as well as the use of means tested programs like Food Stamps to find and enroll children.

The Senate bill, the “CHIP Reauthorization Act of 2007,” a $35 billion, five-year, less expansive proposal, was passed by a vote of 68-31. The Senate bill would add approximately 3.2 million uninsured children in working families to the program over the next five years. Some key elements of the legislation are that it provides $100 million in funding for outreach and enrollment of eligible children, and provides $35 billion above the baseline of $25 billion in funding over five years. Further, states opting to provide coverage to families making up to 300 percent of federal poverty level would receive regular Medicaid match rates. States would in addition have the option to cover pregnant women. The Senate bill also provides a state grants program for dental coverage, while requiring that if a state opts to provide mental health coverage it must have parity with surgical and medical benefits. As in the House bill, under the Senate version states would no longer be allowed to provide coverage to childless adults. Those adults still remaining on the state rolls would, over time, be phased out of the program.

Rather than allow states to broadly use means-tested programs to enroll children in CHIP, the Senate bill creates a demonstration project that will allow up to ten states to use information from means tested programs like Food Stamps to find and enroll eligible children. The Senate bill is paid for with a 61-cent increase in tobacco taxes.

The White House has said that it will “veto” either the House or Senate bill because both proposals expand the program too broadly and would increase federal involvement in health care. With the looming “veto” threat, the House and Senate conferees will face the daunting task of reconciling both pieces of legislation. At the center of the debate is roughly a $12 billion price tag difference between the two bills ($47 billion in the House versus $35 billion in the Senate); the difference in the proposed increase to tobacco taxes (45 cents in the House versus 61 cents in the Senate); and, perhaps most visibly, cuts to Medicare Advantage, a popular program in which private managed care plans provide benefits to seniors instead of the government. The House version of the bill includes a provision to cut the Medicare Advantage program to offset the costs of CHIP – the Senate version does not. The current CHIP law expires September 30.

In January 2007, the leadership of the Conference of Mayors, led by Conference President Trenton Mayor Douglas H. Palmer, targeted the reauthorization and expansion of the CHIP as a top priority for their work with the new Democratic Congress.

At the June 75th Annual Meeting of the Conference of Mayors in Los Angeles, the Mayors passed a policy resolution urging Congress to:

• reauthorize and expand the program;

• strengthen the current Medicaid and CHIP programs;

• provide streamlined mechanisms for program enrollment;

• provide coverage for pregnant women; and

• provide a national benefits package that includes mental and dental coverage.