Just the Facts: Top Five Reasons the Democrats' "New" Schip Bill Is Actually More of the Same

For Immediate Release
Office of the Press Secretary, the White House
October 25, 2007

Just the Facts: Top Five Reasons the Democrats' "New" Schip Bill Is Actually More of the Same
Legislation Still Fails To Cover Poor Children First

"The Administration strongly supports reauthorization of the State Children's Health Insurance Program (SCHIP) in a way that puts poor children first. ... Because H.R. 3963 has not addressed in a meaningful way the objections that caused the President to veto H.R. 976, the President will veto this legislation if it is presented to him without significant changes."

– Statement of Administration Policy, 10/25/07

1. The Democrats' new legislation continues to allow States to avoid covering poor children first. The bill repeals the requirement that 95 percent of children below 200 percent of the Federal poverty level be covered before coverage is extended to children from higher income families. The Democrats' new legislation also permits States to keep adults on the program through 2012.

2. The Democrats' new legislation continues to cover children in families earning more than $62,000 per year (300 percent of the Federal poverty level). Proponents claim the Democrats' new legislation caps income eligibility at 300 percent of the Federal poverty level, but the legislation would not completely close the income disregard loophole. Under this loophole, States could still enroll children in families with incomes higher than $62,000 a year by ignoring part of the family's income. In addition, the legislation continues to grandfather New Jersey at $73,000 per year (350 percent of the Federal poverty level).

3. The Democrats' new legislation continues to raise taxes to move 2 million children covered by private health insurance onto government-run programs with fewer choices and longer lines. Federal revenues are at an all-time high, and no tax increase of any kind is needed to finance SCHIP reauthorization. The President's Budget offsets not only the new SCHIP spending but also proposes an additional $92 billion in mandatory savings over five years. These proposals represent more than enough to offset any additional spending in the context of the Democrats' new bill. The new legislation also continues to fund SCHIP with a budget gimmick that would not provide stable funding and actually costs more than the earlier bill, notwithstanding supposed improvements in policy.

4. The Democrats' new legislation continues to allow SCHIP to cover ineligible individuals. The legislation imposes no sanction if a person fraudulently attests to being a U.S. citizen. During the period of time that the State is conducting an investigation (if Social Security finds an inconsistency with the stated Social Security number), it must continue medical assistance to the applicant.

5. The Democrats' new legislation shifts more responsibility to the Federal government. SCHIP has always been a Federal-State partnership (thus the reason for "S" in the title). The Democrats' bill has the effect of reducing States' financial responsibility by providing performance bonuses that can be used to lower the State match requirement. The fiscal responsibility of providing children's health care should be shared. These bonus payments only serve to increase fraud and abuse by emphasizing enrollment at any cost as opposed to enrollment of eligible children.