SCHIP Fact Check on Senator Mitch McConnell

Senator Mitch McConnell (R) attacks the Democratic SCHIP proposal in the Courier Journal, and on his blog. A fact check — all quotes are from the oped:

Claim: “The nonpartisan Congressional Budget Office puts the true cost of their new proposal at $112 billion, $41 billion more than the claimed price tag.”

Fact: The CBO analysis of the Senate Bill concludes:

CBO estimates that enacting this legislation would increase federal direct spending by $35.2 billion over the 2008-2012 period and by $71.0 billion over the 2008-2017 period. CBO and JCT estimate that net revenues would increase under the bill by $36.1 billion over the next five years and $72.8 billion over the 10-year period. A portion of that increase would be in off-budget revenues: $0.8 billion for the 2008-2012 period and $1.1 billion over the 2008-2017 period. On balance, the spending and revenue changes would reduce federal on-budget deficits by $0.1 billion through 2012 and $0.8 billion for the 2008-2017 period.

Claim: “They also want to extend SCHIP to people it was never meant to cover. As the name implies, the State Children’s Health Insurance Program was intended to cover children, not adults. While Kentucky operates a responsible program, a number of other states have exploited loopholes to use their children’s health funds on adults. Rather than closing these loopholes, the new proposal protects states that raid their kids’ health funds.”

Fact: The SCHIP framework is flexible, allowing states to establish their own eligibility criteria. Senator McConnell’s criticism of SCHIP’s flexibility contradicts long-standing Republican support for state and local control of spending. The White House has recently highlighted the flexibility of the SCHIP framework as central to its success:

States’ years of experience with implementing home- and community-based waiver programs, waiver programs to extend Medicaid coverage to higher income and non-traditional populations, and the SCHIP program provide States with a wealth of knowledge and a multitude of strategies to design more efficient and effective programs. Further, in August 2001, the Administration introduced the Health Insurance Flexibility and Accountability (HIFA) demonstration initiative. Eight States currently have HIFA waivers. Approximately 175,000 people are currently covered under these waivers with another 585,000 people anticipated to be enrolled. These experiences give States knowledge of the flexibility they need to design tailored, innovative approaches to increase access to health insurance coverage for the uninsured. The Administration remains committed to enacting legislation, which will reform Medicaid and SCHIP to give States as much flexibility as possible with predictable financing.

The “loopholes” criticized by Senator McConnell are in fact waivers explicitly approved by President Bush’s Secretary of Health and Human Services. As the CBO explains:

A number of states have used waiver authority to expand coverage under SCHIP to adults. Covering parents may help to increase participation among children, because parents who are eligible may be more likely to enroll their children also. In particular, section 1115 of the Social Security Act gives the Secretary of Health and Human Services the authority to waive certain statutory and regulatory requirements of Medicaid and SCHIP. The Secretary has used that authority to allow states to expand eligibility for SCHIP to low-income parents, pregnant women, and adults without children. As a condition for those waivers, states are required to cover those populations with funds not used to cover children. Section 1115 waivers also provide states additional flexibility to use SCHIP funds to subsidize the purchase of private health insurance through premium assistance programs. Of the 18 states that have obtained section 1115 waivers, 13 have expanded coverage to parents, related caretakers, and legal guardians, as well as pregnant women. Adults without children are currently covered in four states; however, the Deficit Reduction Act of 2005 (P.L. 109-171) prohibits the approval of such waivers in the future.

The Democratic bill transitions childless adults out of SCHIP, prohibits future waivers for parents, and provides a lower Federal matching rate for currently enrolled parents. As Senator Baucus explained to Secretary Leavitt:

It is ironic of this administration to complain, as it has been this administration’s Department of Health and Human Services that has granted the overwhelming majority of the waivers that have expanded CHIP coverage to adults. You should be happy that our bill would prevent you from promulgating further waivers to expand coverage to adults.

Secretary Leavitt granted a waiver to Wisconsin on May 30, 2007, allowing the state to continue covering adults in its SCHIP program. Explained CMS official Dennis Smith: “It would have been disruptive to the states and those families to change without adequate notice.”

Claim: “They also propose allowing families in certain states, like New York, who make four times the federal poverty level to still qualify for SCHIP insurance. That means a family in New York City making $82,600 a year will be able to drop the private insurance they currently have for their kids and use the federal dime instead.”

Fact: States that have received waivers from President Bush to raise the income eligibility requirements are reimbursed by the federal government at a reduced rate. Federal SCHIP allocations are also capped, such that state eligibility determinations do not affect the overall program cost.

Claim: “That’s why I proposed an alternate bill, the Kids First Act, that focuses on SCHIP’s true goal: protecting low-income children. It would reauthorize SCHIP for five more years, ensure that children stay enrolled by adding $14 billion on top of the current SCHIP budget, and add 1.3 million new kids to the SCHIP program by 2012.”

Fact: Had the McConnell amendment passed, 100,000 fewer kids would have had health insurance in 2012 than have it today. In contrast, 3.2 million more children will have health insurance under the Democratic bill. The Center on Budget and Policy Priorities reports on preliminary CBO numbers:

Preliminary CBO estimates show, however, that under the Lott-McConnell proposal, only a net of 700,000 children who would otherwise be uninsured would be covered in 2012. In other words, the overall coverage gains under the Lott-McConnell proposal are less than the gains just from ensuring that states can maintain their current children’s enrollment in SCHIP (without making any progress in covering more uninsured children). The plan would fall short of that threshold by approximately 100,000 children.

Claim: “Not only does the Kids First Act cost significantly less than the liberals’ bill, but many states, including Kentucky, would have more SCHIP funds to spend covering kids next year under my proposal than under the more expensive alternative.”

Fact: There is no public data to verify or contradict these claims.

Claim: “The Kids First Act also improves upon current SCHIP law by providing funds to reach out to those low-income children who are eligible, but still not taking advantage of the program.”

Fact: The Democratic SCHIP bill includes significantly more resources for outreach to eligible children than McConnell’s alternative, including specifically allocating resources for outreach to rural communities. As the Center on Budget and Policy Priorities explains:

…the Senate bill includes a ten-state “Express Lane” demonstration project to allow SCHIP and Medicaid agencies to use income information collected by other benefit programs to streamline the enrollment process. (The House bill includes a similar option, which would be made available to all states.) Both the Senate Finance Committee bill and the House bill also provide financial incentives for states to increase enrollment among eligible low-income children, particularly poor uninsured children who are eligible for Medicaid. (The Senate Finance bill provides bonus payments to states that succeed in raising Medicaid enrollment above certain target levels.) These incentives are a primary reason that CBO estimates the Finance Committee bill would lead to 4 million uninsured children gaining coverage, 1.7 million of whom would be uninsured children who are eligible for Medicaid, many of whom live below the poverty line.

The Lott-McConnell proposal, by contrast, would not provide any new enrollment tools or financial incentives for states. The proposal would merely provide a modest amount of outreach funding — $400 million over five years — to states and other organizations to enroll children who are eligible for SCHIP but are uninsured.

Claim: “And it will help small businesses provide coverage for their employees by allowing them to band together for greater purchasing power, making health care more affordable.”

Fact: The McConnell legislation would preempt state laws limiting health-based premium hikes and establishing benefit floors, subjecting small businesses with sick employees to huge rate increases. Allowing the creation of Association Health Plans is more likely to undermine employer-based health care that strengthen it. As the National Governor’s Association put it:

Calling it a threat to consumers, the National Governors Association (NGA) today reiterated its opposition to the proposed Senate bill exempting Association Health Plans (AHPs) from state health care protections and regulations. The legislation would raise already skyrocketing health care premiums on our most vulnerable populations while watering down states’ existing financial oversight and consumer protection measures.

A risky and precedent-setting preemption of state law, the proposed Senate legislation (S. 545), and a similar House-passed measure (H.R. 660), would seriously undermine states’ ability to provide their citizens with access to affordable health insurance coverage by exempting AHPs from important state regulations. The Congressional Budget Office has projected that AHP legislation would result in higher premiums for four out of five small employers if enacted.

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3 Responses to “SCHIP Fact Check on Senator Mitch McConnell”

1. Terri Says:
   August 9th, 2007 at 9:20 am

   The L.A. times has a really good op-ed piece on Bush’s threatened veto of this bill: link.

2. truth machine Says:
   August 9th, 2007 at 3:17 pm

   How could anyone be so stupid as to think that Mitch McConnell gives a damn about poor children in the first place? And if they are, they won’t be swayed by fact checking. Nonetheless, good work.

3. Daniel Says:
   August 10th, 2007 at 5:19 am

   I couldn’t understand some parts of this article SCHIP Fact Check on Senator Mitch McConnell, but I guess I just need to check some more resources regarding this, because it sounds interesting.

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