Congress Delays Action on SCHIP and Medicare Reforms

Published March 1, 2008

In response to presidential vetoes, Congress has set aside action on the State Children’s Health Insurance Program (SCHIP) and Medicare until at least the middle of 2008.

SCHIP became a flashpoint for controversy when congressional leaders’ attempts to expand the program were met with repeated presidential vetoes. Unable to override the vetoes, Congress extended the program in its current form through March 31, 2009 by a 511-3 vote in both houses.

“The successful GOP effort to prevent Democrats from enacting the largest expansion of government-controlled health care in decades was a victory for American families, taxpayers, and over 2 million children who would have had their private insurance ripped away by government bureaucrats,” said Brad Dayspring, spokesman for the Republican Study Committee, a group of more than 110 House Republicans.

“The pro-family Republican effort was the latest in the debate over who will control health care in America. Will it be parents, families, and doctors? Or will it be Washington bureaucrats?” Dayspring added.

Action Delayed

House and Senate Democratic leaders had planned to expand SCHIP to 10 million more children, which would have required increasing the program’s budget by approximately $35 billion. The expansion was to be financed by an increase in the federal cigarette tax.

Congress twice passed bills and sent them to the president, who vetoed both, citing his opposition to massive tax increases and to increasing government’s role in health care.

Democrats had planned to use Bush’s vetoes, and Congressional Republicans’ votes to uphold the president’s acts, as a legislative and campaign issue in 2008. Instead, in passing the 16-month SCHIP extension on December 29, 2007, Congress effectively removed government-run children’s health care as an issue for 2008.

Medicare Reforms Put Off

Plans also faltered for a sweeping Medicare bill that would have raised physician payments under the government-funded health insurance program for the elderly.

The original plan would have raised doctor reimbursements for two years by up to 2 percent and was to be funded in part by tax increases, cuts to the Medicare Advantage reform program, and cost shifts to the private sector. This idea was scrapped when Congress failed to reach an agreement on those funding issues.

Congressional leaders had planned to include funding for electronic prescribing and other elements of health information technology in the bill, along with funding for an entity that would conduct research on the comparative effectiveness of drugs and medical procedures.

Some in Congress also had hoped to prohibit doctors working with Medicare patients to refer them to hospitals in which they have an ownership interest.

None of those changes made it through the legislative process. Instead, a temporary 0.5 percent increase in physician payments was tacked on to the SCHIP extension.

Continued Debate Likely

Because SCHIP will not expire until 2009 and comprehensive health reform has become a major issue in the 2008 presidential campaign, the next Medicare bill, to head off a 10 percent physician reimbursement cut scheduled to take effect on July 1, is expected to be the only major health-related legislation brought forward in the final year of the 110th Congress.

Members of Congress and interest groups alike may push to use Medicare legislation in 2008 as a vehicle for addressing a wide array of health issues besides those germane to the bill itself, including mental health mandates, waivers allowing states to tax businesses to fund health reforms, increased accessibility of data collected by the Centers for Medicare and Medicaid Services, genetic information protections, comprehensive health information technology legislation, and more.

Many in the health policy community believe 2008 will be a slow year for federal health legislation, perhaps in deference to presidential candidates who may want comprehensive health reform to be put on hold until they are in charge.

Nevertheless, there is clearly a large amount of unfinished business that will be hard-fought in the halls of Congress and the arena of public debate throughout the year.

James Gelfand ([email protected]) is a health policy expert in Washington, DC.

Fore more information …

The Medicare, Medicaid, and SCHIP Extension Act of 2007 (S.2499):