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Children's med plan has healthy support

President Bush indicates where Congress' planned $35 million increase in the State Children's Health Insurance Program is headed if it reaches his desk. He promised a veto.

TEXT OF STORY

KAI RYSSDAL: The treasury secretary and the chairman of the Federal Reserve were on Capitol Hill this morning, talking about the mortgage industry. At the same time, President Bush was back at the White House tending to more political topics. Before taking questions from reporters, the president called on Congress to pass an extension of what's known as S-CHIP, the State Children's Health Insurance Program.

It's not that lawmakers don't want to renew S-CHIP before it expires at the end of the month. They do -- in fact, they want to make many *more kids eligible for government health coverage. Which is where the president has drawn a line.

He and other supporters of private insurance want more money for S-CHIP as well -- just far less than Congress. Our Washington bureau chief John Dimsdale reports a big expansion has significant support from the business community.


JOHN DIMSDALE: BThe White House is threatening a veto, but supporters of House and Senate passed bills to enlarge SCHIP think they have a good shot at either dissuading, or overriding, the President. After all, it's pretty tough to argue against health care for kids.

Democrats seem all too happy to champion a compassionate and popular cause. Which is why House Speaker Nancy Pelosi and several Democratic committee chairmen could be found in the basement of the Capitol the other day, singing with children who'd been brought to lobby for SCHIP by the AFL-CIO.

REP. NANCY PELOSI: When people ask what are the three most important issues facing Congress, I always say the same thing: our children, our children, our children.

Speaker Pelosi's cause is getting help from an unexpected source: Businesses see SCHIP as a way to offer their employees a more affordable package of health insurance. The program is designed for children of working parents who earn too much to qualify for Medicaid, but not enough to pay for family health insurance.

Businesses have decided government-run insurance for employees children is a pretty good idea. Maria Ghazal is the director of public policy for the Business Roundtable.

MARIA GHAZAL: We survey the membership every year, and for the fifth year in a row, health care costs have come back as the number-one cost pressure. Increasingly, fewer smaller employers are offering insurance. Really, at the end of the day, those who pay for it in the private marketplace are feeling the cost shift.

But the White House says the business endorsement of expanding SCHIP is short-sighted. Dennis Smith is the director of the Medicare/Medicaid program for the Bush administration.

DENNIS SMITH: In the long term, what you're doing is taking dollars and healthy lives out of the insurance pool of which the private sector relies on. The premiums and costs for those who remained in the pool, then they go up. Then those families decide they can't afford it and they drop out. There's a short-term attractiveness about that, but it catches up eventually over time.

The Bush administration says SCHIP is a successful and cost-effective program, and recommends 20 percent more money to meet demand from the target population -- that means working families below 200 percent of the poverty level, or a yearly income of $41,000 for a family of four.

Congress, with the backing of some states, is looking at doubling the eligibility income and even covering some young adults. That goes too far for those who want to maintain employer-sponsored health insurance.

Janet Trautwein with the National Association of Health Underwriters says allowing too many healthy young people to leave the private insurance rolls puts more pressure on companies still trying to offer coverage for their employees.

JANET TRAUTWEIN: Moving these kids out doesn't help in the long run at all -- all it does is increase your average age and ensure you're going to have more claims, not fewer claims, based on the total dollars that come in. The older someone is, the more likely they are to incur claims. That's just the way it is.

However, the Business Roundtable, which represents CEOs of major companies, approves of expanding SCHIP, without specifying how much. Even coverage for adults gets a nod from the Roundtable's Maria Ghazal.

GHAZAL: We do think policymakers should consider that option. I know there are some who think that isn't the way to go. We do have such a need in this country, and at this point different options should be on the table -- and that is definitely one of them that we're supportive of.

However, companies quickly distance themselves from the way Congress proposes to pay for expanding SCHIP. Both the House and Senate would raise cigarette taxes.

Congressional leaders are still trying to find common ground between two very different bills to extend SCHIP. Without a compromise that can attract enough votes to override a White House veto, Congress will have to pass a short-term extension by the end of next week.

In Washington, I'm John Dimsdale for Marketplace.

About the author

As head of Marketplace’s Washington, D.C. bureau, John Dimsdale provides insightful commentary on the intersection of government and money for the entire Marketplace portfolio.

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