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Republicans take aim at children's health program

September 7, 2007 | Page 4

LEE SUSTAR explains the White House's latest effort to protect the profits of the health care bosses.

THE BUSH administration is trying to carry out a pre-emptive strike against health care reform--and if it succeeds, at least 4 million uninsured children will be the collateral damage.

George W. Bush's attack on the State Children's Health Insurance Program (S-CHIP) is a two-pronged assault.

First, the administration issued new rules August 20 that would make it virtually impossible for state governments to extend coverage to children in families with incomes above 250 percent of the federal poverty level--that is, $51,625 for a family of four.

Next, Bush vowed to veto legislation currently before Congress that would boost funding for S-CHIP and expand coverage to what the administration calls "middle-class" families.

S-CHIP was intended to provide coverage for children of parents whose income is too high to qualify for Medicaid, the insurance program that covers low-income people. In the eyes of the right wing, that's "socialized medicine."

"Democrats want to raise taxes by at least $54 billion to fund a massive expansion of government-controlled health care," said Rep. Jim McCrery (R-La.). "This is not just about helping low-income children. They are spending government funds to lure middle-class families to opt out of private health coverage."

Why would even a conservative Republican like McCrery make an alliance with the unpopular Bush to try to gut a popular program like S-CHIP?

Statistics show that S-CHIP is an indisputable success--it has reduced the percentage of children and youths under 19 without health insurance from 22.3 percent in 1997 to 14.9 percent today. By 2005, some 6 million children were covered by S-CHIP programs, in which the federal government provides matching funds for state programs, under a structure similar to Medicaid.

While the number of uninsured kids remains scandalous for the richest nation on earth, S-CHIP has at least been able to partially compensate for the 2 million children who lost coverage under employment-sponsored plans between 2000 and 2005.

But Bush and politicians like McCrery are focused on a different set of numbers.

According to the Campaign for America's Future, McCrery received $66,209 in campaign contributions from insurance companies in 2000 and another $109,368 in 2006. And while the main health insurance lobbying group, America's Health Insurance Plans, formally supports the expansion of S-CHIP, its mouthpieces in Congress, right-wing policy institutes and, of course, the White House are in full cry against a supposed government takeover of health care.

According to Health and Human Services Secretary Mike Leavitt, S-CHIP expansion will create "a Washington-run, government-owned plan, where government makes the choices, where government sets the prices, where government then taxes people to pay the bill." The proposal in Congress would create "a single-payer system with rationing and price controls," Leavitt said.

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THE REALITY is that S-CHIP, like Medicaid, relies overwhelmingly on private health care providers, who contract with individual states to provide services, as opposed to a single-payer system that excludes private insurers.

Moreover, states require families above the poverty line to share costs through premiums and/or co-pays. Far from "rationing" health care, S-CHIP provides insurance for children whose parents couldn't afford decent coverage.

What alarms the Bush administration and the health insurance industry is the fact that the proposed expansion of S-CHIP would displace private insurers for about 34 percent of the children covered. Some parents would drop their pricey high-premium, high-deductible private plans, and opt for cheaper and more comprehensive S-CHIP coverage for their kids instead.

In fact, Bush's own health care proposals would displace private insurers. Some 77 percent of the benefits of the White House plans to boost health care coverage through tax incentives would go to people who already have health insurance.

That's fine with health insurance CEOs, who under Bush's plan could continue to manipulate the "free" health insurance market through raising premiums, while cutting and denying coverage.

S-CHIP, however, represents a modest encroachment on the U.S. health care system, particularly because it has allowed states--with the federal government's permission--to extend coverage further above the poverty line than the current 200 percent level established in legislation.

In New Jersey, for example, income eligibility is now 350 percent of the federal poverty line, about $72,000 for a family of four. The state of New York wants permission to raise this level to 400 percent, or $82,600 for a family of four.

Bush's restrictive new rules governing S-CHIP prevent this. In order to expand coverage beyond 250 percent of the poverty line, the state must first prove that it has covered 95 percent of all children eligible for the existing program, a standard that almost no state can meet.

At the same time, the states must show that the number of privately insured children hasn't declined by more than 2 percent in the higher income bracket targeted for an S-CHIP expansion. This provision is explicitly aimed at protecting the markets of private insurers.

Finally, those at the higher incomes must wait at least one year to enroll their children, and must bear costs roughly equivalent to that of private plans' premiums, deductibles and co-pays.

Added to this is a veto threat of expanded funding for S-CHIP, which was capped at $40 billion in 1997 by the Democratic Clinton administration and the Republican Congress. While the Bush administration complains that the funding is aimed at middle-class families, 4.3 million of the 4.9 million children who would be covered under the House plan are in families with incomes below the states' eligibility limits, as the Center on Budget and Policy Priorities points out.

Another right-wing argument against S-CHIP is that it supposedly makes it easier for undocumented children to get medical coverage. In fact, the House bill aims to modify a requirement implemented in 2006 requiring extensive documentation of citizenship in order to receive Medicaid.

Since many states combine S-CHIP and Medicaid applications, "tens of thousands of children who are U.S. citizens have been shut out of the program because their parents lacked ready access to a birth certificate or passport, while virtually no undocumented immigrants have been identified," wrote Robert Greenstein of the Center on Budget and Policy Priorities.

While Democratic presidential candidates tout their various plans for health care reforms for 2009 and beyond, the Democratic Congress has the opportunity to tackle the issue now.

Whether or not they'll stand up to Bush and the health insurance companies or cave in a "compromise" at our children's expense depends on how much pressure they feel from below.

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