Health program splits parties

Debate over the reauthorization of a federal-state program that provides health benefits to low-income children is dividing along party lines, and one small sector of the healthcare industry is watching the talks with acute interest.

Without congressional action, the State Children’s Health Insurance Program (SCHIP) will expire at the end of the fiscal year. Democrats have identified the reauthorization and expansion of the program as their No. 1 healthcare priority, but face opposition from Republican colleagues and a White House looking to limit federal spending on the program.

SCHIP does not attract intense lobbying as do Medicare and Medicaid — which provide billions of dollars to private-sector industries — leaving Democratic lawmakers with little outside pressure to help sway votes for their bill.

A successful lobbying campaign could be crucial to the passage of a SCHIP reauthorization bill, particularly if the legislation carries a high price tag. Supporters of the Democrats’ efforts have estimated costs at $12 billion to $50 billion over five years, depending on the bill’s scale. The White House, meanwhile, proposed allotting $4.8 billion to SCHIP in the budget released Monday.

Those with the greatest interest in the outcome of the SCHIP debate are relatively small, not-for-profit, local and regional health-insurance businesses. On behalf of state governments, these plans administer SCHIP benefits to children and Medicaid benefits to children and adults.

In 2005, SCHIP covered about 6 million children while Medicaid covered an additional 28 million children, according to the Kaiser Commission on Medicaid and the Uninsured.

Congress created SCHIP in 1997 to provide health benefits to children of families with incomes too high to qualify for Medicaid. Some states have expanded the program to include children from higher-income families and, in some cases, their parents. Congressional Democrats this year are considering expanding the program to cover all children who lack health benefits.

A seven-year-old trade group called the Association for Community Affiliated Plans (ACAP) represents the SCHIP health insurers in Washington. Community health centers, public hospitals or local communities typically own the plans, ACAP’s executive director, Margaret Murray, said.

Although ACAP’s member companies would be the most directly affected private-sector interest, the group lacks the clout to exert its agenda on its own. “ACAP doesn’t see itself as the driver. It sees itself as part of the train,” said Bob Thompson, the group’s vice chairman and the president and chief executive of the Monroe Plan for Medical Care in Rochester, N.Y.

ACAP seeks, at a minimum, to maintain the current level of coverage under SCHIP, but would prefer to see the program expanded to include not only children who are already eligible but not enrolled, but also children from higher-income families than SCHIP currently covers, Thompson said.

For their agenda to be successful, Thompson said, the SCHIP health plans must rely on the efforts of other lobbying organizations.

The health-insurance industry’s main lobbying organization, America’s Health Insurance Plans (AHIP), will be an important player in the debate, Thompson said, along with the National Association of Community Health Centers. About half of the group’s members are also AHIP members, according to Murray.

The liberal healthcare advocacy group Families USA, which is influential among congressional Democrats, is a vital part of the coalition lining up to push for the SCHIP bill, Thompson said.

The power of consumer advocacy groups should not be underestimated, either, said a professor at Georgetown University’s Health Policy Institute, Cindy Mann, who was a Medicaid and SCHIP official during the Clinton administration. The backing of these groups gives the effort “a little bit more clout than [it] would have had otherwise,” Mann said.

The country’s governors are sure to weigh in heavily as well. The federal government pays a larger share of the healthcare expenses for children enrolled in SCHIP than it does for Medicaid beneficiaries. The program is politically popular at the state level, Mann said.

Before Congress even began working on the reauthorization of the program, governors were pushing lawmakers to take up short-term legislation to address what they describe as “shortfalls” in SCHIP funding to as many as 12 states. Those states have claimed that without an influx of federal cash this year, children are at risk of losing their health benefits.

The National Governors Association will hold its annual winter meeting in Washington at the end of the month. Governors are expected to use their appearances in the capital to press for both the short-term SCHIP funding and the reauthorization of the program, which could provide a boost to the Democrats writing the bill.