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THE STATE OF PLAY ON S-CHIP. My column today is on the ideological subtext of the fight over reauthorizing and expanding the State Children's Health Insurance Program (S-CHIP), and how the White House has turned it into a proxy war over universal health care. Read it and be enlightened. But before the showdown gets much further, the various bills actually have to pass Congress, which, for the first time in Nancy Pelosi's leadership, appears tough.
The hang-up is, essentially, tobacco. The House bill reauthorizing and expanding S-CHIP pays for itself in a couple ways, the primary one being a 41 cent increase in the tobacco tax. This has left Democrats from tobacco states deeply skittish about the legislation. Add in the usual intransigence of Blue Dog and business friendly types, both of whom are grumbling about the increase in spending and the levying of a new fee, and the House bill is expected to actually spark a fight inside the caucus.
The House bill also has another element, which the Senate bill completely foregoes: Reform of the Medicare Advantage plans. For a longer explanation of this issue, Bob Berenson wrote a piece on it back in December. But the quick lay of the land is this: Back in 1982, Congress tried to unleash the magic of the free market by letting private insurers offer Medicare plans for seniors who wanted them. The insurers would be paid at the same rates as Medicare and, if they were indeed more efficient, could then offer more expansive benefits and out-compete the public program.
They were not more efficient. But they've been very good at lobbying Republican Congresses. And so now, the government is paying these private plans about 120 percent of what Medicare gets per patient. In other words, the government is overpaying these plans in order to help them out-compete the public plan -- which they're still not doing. It's an almost hilariously absurd state of affairs, were it not actually costing us all a lot of money.
So the House bill equalizes those payments back to 100 percent of what Medicare gets. If the private insurers can compete on a level playing ground -- and it should be noted here that they get to pay the same rates to providers that Medicare has negotiated, so it is a level playing field -- then so be it. If they can't, they can't. But industry groups are predictably unhappy to see this gravy train ending and so they've launched a massive advertising and lobbying campaign to block the bill. So there are a lot of groups potentially pressing against passage. On the other hand, it is health care for kids...
--Ezra Klein
COMMENTS (4)
With all the commentary I read about S-CHIP, I'm stunned Hillary Clinton is never refered to. She was the first to call fo a major expansion of S-CHIP. Her amendment is far more expansive that what will likely pass. Her proposal relies on ending the subsidies in Medicare rather than a tabacco tax. I just find it suprising that she is never mentioned with all the talk about S-CHIP.
Posted by: Melanie | July 26, 2007 12:48 PM
I saw a hilrious ad on TV in the DC area sponsored by AARP and the American Medical Association about how Congress is going to take away funds from Medicare.
I turned to the person I was watching TV with and said "Yeah the AARP doesn't care if sick children die as long as rich seniors keep getting all the money."
Putting ads on TV must show they are desperate to stop this. That's usually the biggest gun they will pull in lobbying.
Posted by: NewsCat | July 26, 2007 12:56 PM
NewsCat: AARP and AMA have actually been vocal supporters of the bill, and this is the ad I've seen of theirs.
This is how popular this program is. Even the groups that shouldn't be supporting it (based on strict self-interest) support it. What the heck kind of base is the GOP trying to mobilize here, again? Ebenezer Scrooge?
Posted by: dbeth | July 26, 2007 5:07 PM
The Ad Newscat references was actually the ad paid for by the insurance industry.
The seniors in their ads are those who've signed up for private MA plans...and been told they will be "kicked out of Medicare". Which of course is not what this bill does.
If you have any doubts about who's on which side consider those supporting MA overpayment cuts: AMA, Families United, The National Committee to Preserve Social Security and Medicare, the Medicare Rights Center,AARP and virtually every other major seniors and health advocacy group.
The "advocacy group" fighting to keep paying private insurers billions in subsidies...the non-profit front group created by AHIP.
Posted by: wrightk | July 30, 2007 8:25 AM