Money Matters: Major Moves in CA & US on Health

Friday, July 20th, 2007

• Bipartisan 17-4 Vote to Expand Children’s Coverage, including CA’s Healthy Families
• House Expected to Consider Broader Proposal; Bush Threatens Veto

• CA Budget Considered in Full Assembly; Heads to CA Senate

Click Here for What’s New on the Health Access WeBlog: More on SCHIP Mark-Up; Will Bush Veto?; Study on Tax Credits and High Deductibles; Grocery Worker Strike Averted; Sicko; Germany’s Health System; Language Access Comments Due at Department of Insurance

CA ASSEMBLY PASSES BUDGET: Starting almost at midnight last night and going well into this morning, the California Assembly stayed into the night to consider and pass a proposed deal on the state budget.

In presenting the budget, Budget Conference Committee Chair John Laird stated that “There’s a lot to like about this budget,” pointing out the many areas that are fully funded. However, he did mention significant reductions, particularly to public transit, and mentioned that “health and human services do suffer cuts.” He stated that the goal of the last week of negotiation was to get “a budget that appeals to both sides of the aisle,” and as such, mentioned there were “no new social programs.”

With the Assembly passing the measure, the hope is that the Senate will consider the measure today, Friday, although the outcome is unclear at this writing. The budget is for the 2007-8 fiscal year that has already started, on July 1, 2007.

Health Access will review the new budget documents, including the health and human services budget trailer bill, and post any health related news on the Health Access WeBlog over the next few days.

US SENATE SCHIP DEAL MOVES AHEAD: Yesterday, in Washington, DC, the U.S. Senate Finance Committee marked up and passed a major bill to reauthorize and expand the State Child Health Insurance Program (SCHIP). This action is an important step for California, which is depending on these deliberations to fund coverage for the over 800,000 children on our state’s Healthy Families program, and to help reach the goal of covering all children.

The bill mark-up, which provides for $35 billion in additional funding for SCHIP, was approved by a vote of 17-4. All of the Democrats and 6 Republicans (Grassley, Hatch, Snowe, Smith, Crapo, and Roberts) voted for passage. Lott, Kyl, Ensign, and Bunning were the 4 no votes. It now heads to the Senate floor.

As proposed last week, the bill raises these funds with a 61 cent increase in the national tobacco tax, bringing that tax to a flat $1.00. After the mark-up, the bill now also includes an Express Lane state demonstraton program, mental health parity, and dental health grants. Families USA has a more detailed update, including the full mark-up documents, at their Medicaid Action Center on their website at:

Amendments were suggested to weaken the bill, but they failed, including policies such as allowing premium assistance to be used to purchase high-deductible plans and restricting CHIP eligibility to 300% of poverty. Amendments that would have strengthened the bill (like increasing the funding to $50 billion and adding ICHIA) were withdrawn before a vote, largely because they were unlikely to pass at this time.

In a teleconference call with a California convening, a Democratic staffer for Majority Leader Reid noted that the proposal was not all that Democrats has wanted–including the $50 billion amount that health and children’s advocates had pushed–but they needed to get bipartisan support, given that, under Senate rules, any bill needs 60 votes to pass, which means getting all Democratic votes and 10 Republican votes.

HOUSE PLANS: At that same teleconference convening, a staff for Speaker Nancy Pelosi stated that the House hope to pass a broader health care package, also in July, to allow for negotiations over the Congress’ August recess to reconcile the measure with the Senate. The desire is to negotiate a final deal for passage in September.

The $100 billion health package is expected to include elements on provider reimbursement, low-income senior assistance, and $50 billion for children’s coverage reauthorization and expansion. It would also be funded by a tobacco tax, as well as a readjustment of subsidies to Medicare HMOs.

BUSH’S VETO THREAT: While the Congress is debating how much to expand children’s coverage, and how to fund it, President Bush has indicated that he would veto the children’s coverage bill passed in the Senate Committee.

Despite his 2004 campaign convention speech promising to enroll more children in SCHIP programs, the President’s original budget included only a $5 billion increase, which would force many states, including California, to dump children from the program or have children placed on waiting lists. Bush has repeatedly denounced the bill as a step toward “government-run health care for every American,” describing it as a “massive expansion of the federal role” in health care, financed by “a huge tax increase.”

While SCHIP has traditionally been a program with broad bipartisan support, having originally passed in a Congress headed by former Speaker Newt Gingrich, several Republican Senators used similar talking points in the debate today.

The Center for Budget and Policy Priorities, on their website, has new papers that provide facts disputing these assertions, including addressing the issue of “crowd-out,” where an expansion of a public program replaces existing private coverage. These papers are available now, at:

ACTION NEEDED: Contact Senators Boxer and Feinstein, and more urgently, your U.S. Representative, and urge them to support full funding for SCHIP and children’s coverage. Families USA is hosting a toll-free line to make this call at 1-800-828-0498, and a website to faciliate E-mails at:

Health Access California promotes quality, affordable health care for all Californians.
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