SCHIP Reauthorization, Other Health Bills Likely This Year


WASHINGTON — The 110th Congress is fertile ground for health care legislation, from expanding coverage to fixing physician pay, according to Capitol Hill insiders and observers speaking at a conference sponsored by AcademyHealth.

“You can feel it in the air, not just in Washington but all across the country. The season is changing,” said Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee. “The season is for real debate on health care reform. And it is long overdue.”

In the last election, Democrats won new seats in the House and Senate without losing any of their own by pointing to Republicans' lack of accomplishment, said Norman J. Ornstein, Ph.D., a resident scholar at the American Enterprise Institute, a conservative think tank in Washington.

“Having run vigorously against a do-nothing Congress, Democrats … now have to show that they are the do-something Congress,” said Dr. Ornstein.

There is also a sense that America's employers are ready to support health care reform, said Sen. Ron Wyden (D-Ore.).

“In 1994, the business community said, 'We can't afford health care reform.' In 2007, the business community is saying, 'We can't afford not to fix American health care,'” he said.

Meanwhile, democrats' first focus is on covering the uninsured, said Sen. Wyden.

“You cannot fix American health care unless you get everybody covered,” he said, drawing a round of applause. “And the reason that's so important is not only is it morally the right thing to do, which it clearly is, but if you don't get everybody covered, what we all know is the costs of people who don't have coverage get passed on to people who do.”

However, a Democratic congressional staffer pointed out that the tight federal budget means compromises and choices will have to be made.

“What we have done is target our efforts on children. And trying to make sure that we improve on the coverage that is there today and certainly try to find those children who would qualify for the public programs that we have and who yet aren't enrolled,” she said.

Approximately 25% of children in the United States have health coverage through either Medicaid or the State Children's Health Insurance Program (SCHIP).

However, 9 million children currently have no health insurance, and two-thirds of those are actually eligible for public coverage.

States have been increasing their outreach efforts, but have been stymied by shortfalls in federal matching funds for the program.

This year, 14 states are expected to run out of federal funds by May.

The federal government currently is spending $5 billion a year on SCHIP.

To keep the program running at current levels of enrollment, Congress will need to add $13 billion to $15 billion in funding to the program over the next 5 years, according to an estimate by the Congressional Budget Office.

It will cost even more if lawmakers want to enable states to expand coverage to those children who are not currently enrolled and a lot more for those not currently eligible.

As Congress considers SCHIP reauthorization this year—its mandate expires Sept. 30—some Democrats have suggested it's time to make the program an entitlement.

SCHIP currently is funded on a pay-as-you-go basis, meaning that any increased funding must be offset by a cut somewhere else in the federal budget.

With reauthorization also comes the chance to make other changes. Republicans have suggested that states may need more flexibility in how they spend their SCHIP funds to make them go as far as possible.


Both parties are interested in finding a solution to decreasing physician pay under the sustainable growth rate formula, but no one has yet to come up with a remedy that fits into the current budget outlook.

“In order to get the physicians back to zero, we're talking costs of probably approximately $22 billion. And that isn't addressing the longer-term problem that Medicare's current payment formula is going to call for cuts for an additional 5 years beyond that,” a Republican congressional staffer said.

Recent proposals to fix the SGR have ranged in cost from $4 billion in the short-term to $250 billion in the long term.

Refining Medicare Part D

Democrats speaking at the conference said they hope to make refinements to the Medicare Part D drug benefit, such as improvements in the low-income subsidies and a reassessment of the higher payments that Medicare Advantage plans currently receive. Several proposals have already been introduced to allow the government to negotiate drug prices.


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