FACT SHEET | December 17, 2007

Improving Children’s Health Coverage is the Top Health Priority for a Bipartisan Majority in Congress. . .But President Bush Stands in the Way

The Children’s Health Insurance Program (CHIP) has played a crucial role in helping to reduce the number of uninsured low-income children over the past ten years. By every measure, CHIP is cost-effective, and has been shown to work well in meeting the basic health care needs of our nation’s children. Although President Bush’s arguments against the bi-partisan legislation to renew CHIP are unfounded, Democrats and Republicans worked together once again to produce a revised CHIP reauthorization bill that addressed the President’s claims. Congress overwhelmingly approved this updated CHIP legislation, which would still cover millions more low-income uninsured children who are eligible for CHIP and Medicaid, but whose families cannot afford private insurance. Despite widespread bipartisan support for this legislation, however, President Bush has vetoed it – for the second time denying millions of our nation’s most vulnerable children the doctor’s visits and medicines they need when they’re sick, and the checkups they need to stay well. 

Twice this year, Congress has passed CHIP reauthorization legislation that would invest $35 billion in new funding for CHIP, extending coverage to almost 4 million children at no cost to taxpayers. The most recent bipartisan CHIP bill would invest $35 billion over five years to strengthen CHIP’s financing, increase health insurance coverage for low-income children, and improve the quality of health care children receive. According to CBO estimates, the agreement would extend coverage to 3.9 million children who would otherwise be uninsured. The bill would also achieve the following: 

• Providing states with incentives to lower the rate of uninsured low income children;
• Improving CHIP benefits, providing dental coverage and ensuring mental health parity;
• Strengthening outreach tools to streamline enrollment of eligible children;
• Raising the quality of health care for low-income children by establishing an initiative to develop and implement quality measures and improve state reporting of quality data;
• Replacing the flawed approach in CMS’s August letter to the states with a more thoughtful and appropriate approach to address the issue of “crowd out”;
• Improving access to private coverage options by expanding upon current premium assistance options for states; and
• Prioritizing children’s coverage by transitioning childless adults off of CHIP, prohibiting any new federal waivers to cover non-pregnant parents, and requiring states with existing waivers to cover parents to transition them into a separate block grant with a reduced federal matching rate. 

The CHIP legislation’s approach is the most cost-effective and efficient mechanism to reduce the number of uninsured children.CBO director Peter Orszag told the Senate Finance Committee: 

“In the absence of a mandate, a mandatory system on employers, individuals, or states -- so in a voluntary system where you are trying to provide an incentive to reduce the number of uninsured children, I think this approach is pretty much as efficient as you can possibly get per new dollars spent to get a reduction of roughly 4 million uninsured children.”

President Bush’s approach to CHIP would do nothing to combat the increasing number of uninsured children and would, instead, cause over a million children to lose their existing coverage. The President would ratchet back CHIP coverage, limiting it to children in families earning no more than twice the federal poverty level. The President has also called for a reduction in the federal matching rate for children in families with incomes above 200 percent of the federal poverty line. If adopted, not only would the President’s proposals fail to make any headway towards covering the nation’s nine million uninsured children, but his approach would also effectively cut off health coverage for 1.4 million children and pregnant women._[1]

Under the tax proposals touted by the President in lieu of CHIP, the large majority of benefits would go to people who already have insurance. Professor Jonathan Gruber of MIT, widely regarded as one of the nation’s leading health economists and whose work has often been cited by the Administration, had this to say about the President’s approach: 

“I have undertaken a number of analyses to compare the public sector costs of public sector expansions such as [CHIP] to alternatives such as tax credits. I find that the public sector provides much more insurance coverage at a much lower cost under [CHIP] than these alternatives. Tax subsidies mostly operate to buy out the base of insured without providing much new coverage”

By blocking legislation to reauthorize CHIP, the President and his Republican allies are placing the health and well-being of millions of children at risk. Last year, the number of uninsured children grew by 710,000 to reach 9.4 million._[2] Without CHIP reauthorization, all of these children will continue to go without access to doctors, life-saving prescription drugs, immunizations, preventive screenings and the basic medical care they need. Even if CHIP is extended at its current funding levels, as some have now proposed, states would face funding shortfalls and hundreds of thousands of children would lose their existing coverage. According to a recent report by the Congressional Research Service, if the program were to be extended at its current funding levels, 21 states would face funding shortfalls this Fiscal Year, with eight states running out of CHIP funds as early as March of next year._[3] CBO estimates that 700,000 children stand to lose their existing coverage if CHIP were to continue at its current funding level._[4]

Democrats will continue to work to cover our nation’s uninsured children. While Democrats have worked with their Republican colleagues for months to reach consensus on CHIP legislation, the President has made misleading and inaccurate claims about the legislation and repeatedly changed his rationale for opposing it. In doing so, the President has made it abundantly clear that his goal is not to provide America’s uninsured children with the health care they need, but to stand in the way. Despite President Bush’s obstruction on the issue, 69 Senators, 43 governors, hundreds of organizations, and the vast majority of the American people continue to support the bipartisan CHIP legislation, which would give our nation’s uninsured children the promise of a healthy start in life.

 

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DPC