SCHIP battle proxy for government health care role
The battle between Congress and the Bush administration over SCHIP expansion is less about the technical aspects of the proposal and more about a fundamental difference on the role of government in organizing and overseeing the health care marketplace. So says George Washington University School of Public Health and Health Services Department of Health Policy chair Sara Rosenbaum writing in the New England Journal of Medicine.
Ms. Rosenbaum says the dispute over SCHIP reauthorization "offers a compelling example of Washington's current inability to address even seemingly uncontroversial matters such as improved health coverage for children."
After President Bush vetoed the initial reauthorization bill and the House failed to override the veto, Congressional leaders worked on a compromise intended to address the president's claim that the original bill moved the health care system in the wrong direction.
In a rewrite, Congress wanted to give states authority to extend SCHIP coverage to children in families earning up to 300% of the federal poverty level, while reducing states' flexibility in determining what income counts in eligibility assessments. The legislation also moved more aggressively to end SCHIP coverage of parents and other adults, imposed tougher citizen documentation requirements, and required states to try harder to avert health insurance crowd-out. But the president again vetoed the bill and the House again failed to override the veto.
"Why would the president veto bipartisan legislation that does precisely what he insisted onnamely, aggressively enroll the poorest children?" Ms. Rosenbaum asks. "One might blame the poisonous atmosphere that pervades Washington these days, but other important social policy reforms have managed to get through. One answer lies in a far larger dimension of SCHIP that is basic to any health insurance legislationnamely, the legislative architecture of the reform plan, its structural and operational approach."
Viewed from that vantage point, she says, the SCHIP battle turns out not to have been about family income assistance levels or the mechanism for financing coverage subsidies, but rather about government's role in health care reform.
What's the government's role?
"SCHIP," she points out, "uses the power of government to form insured groups, select qualified plans, oversee plan operations, and measure results. It is this architecture to which the president was referring when he said that the legislation would move the health care system in the wrong direction. In the end, the SCHIP battle became a proxy war over the duties that government should assume in national health care reform."
The administration was determined to block this type of SCHIP approach because of its implications for broader future reforms, according to Ms. Rosenbaum's analysis. And she says the effort to stop SCHIP was aided by the "toxic atmosphere in Washington and the administration's labeling of SCHIP as a middle-class boondoggle."
One Republican polling expert said such a charge was believable because some families receiving assistance in some states had incomes that, although modest by regional standards, far exceeded the national median. The pollster gave New Jersey as one example of where that happened. The veto "played well in the South," the pollster said, where the maximum annual income of eligible New Jersey families seemed absurdly high to focus groups in poorer (and Republican) parts of the country, with SCHIP programs that were far less generous.
While President Bush announced on July 18, 2007, he would veto any measure that followed a consensus proposal by Senate Finance Committee chairman Max Baucus (D-MT) and Ranking Member Chuck Grassley (R-IA) to extend coverage to 300% of the poverty level, the opening round of what Ms. Rosenbaum sees as a proxy war occurred earlier in the year when the White House released a fiscal year 2008 budget calling for reductions in federal SCHIP spending over five years.
Tax-break proposal
Bush coupled those reductions with a new system of individual tax breaks for people without employer-sponsored coverage and new limits on the aggregate value of tax benefits for people with access to such coverage. He refrained from making any recommendation that would suggest a government role in overseeing health insurance arrangements.
Ms. Rosenbaum says when the White House proposal didn't gain any political traction, the House and Senate both produced legislation building on the existing SCHIP program, which allows state governments the role of health care purchasers in identifying, selecting, and overseeing children's health insurance products that meet broad criteria. As of 2007, she says, nearly all state SCHIP programs used this purchasing approach, and continuation of that SCHIP architecture, and the implicit rejection of the president's proposal, coupled with funding expansions, set the stage for a legislative fight and two vetoes of an important children's health care measure.
As part of that ideological battle, the Centers for Medicare & Medi-caid Services issued its controversial Aug. 17, 2007, letter to "clarify" existing statutory and regulatory requirements related to extending SCHIP to children in families with income above 250% of the federal poverty level.
The Georgetown University Center for Children and Families reported in September 2007 that children in 18 states and the District of Columbia would be affected by the CMS ruling and, by the end of the year several states had said they were dropping plans to expand SCHIP to 300% of the poverty level.
Punish children to achieve goals
"In sum," Ms. Rosenbaum's analysis finds, "what the administration could not achieve through legislation it has sought to achieve by fiat, including administrative directives that appear to run afoul of other federal laws such as ERISA. So determined does the administration appear to be to halt the growth of a health architecture it opposesat least in the case of working families and children not covered through the Federal Employees Health Benefits Planthat it will flout the law and punish thousands of children in order to achieve its goals."
Ms. Rosenbaum also finds that President Bush's tax plan, which is not income related, underscores the reality that the issue with SCHIP was never the level of family income that would qualify children for a subsidy. She says the tax proposal also suggests that the real concern is not health insurance crowd-out, since estimates show the tax credit plan would have a far greater crowd-out effect than any proposed SCHIP expansion and would result in a net gain of only 3 million people.
"The administration's policy recommendations related to nonmeans-tested tax subsidies and its support for association health plans lead to the conclusion that the real issue is the role of government in a reformed health care system," she declares. "The war is over ideology, not money."
For more information, see: Rosenbaum S. The Proxy War SCHIP and the Government's Role in Health Care Reform. N Eng J Med 2008; 358:869-872, at http://content.nejm.org/cgi/content/full/358/9/869.
The battle between Congress and the Bush administration over SCHIP expansion is less about the technical aspects of the proposal and more about a fundamental difference on the role of government in organizing and overseeing the health care marketplace.You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
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