Senate Democrats

Top 5 Myths About the Bipartisan Children’s Health Insurance Bill

With the vote to override President Bush’s veto fast approaching in the House of Representatives, the President and his allies in Congress continue to repeat myths about the program. But the facts are clear. The bipartisan compromise Children’s Health Insurance bill will provide coverage for 3.8 million more uninsured low-income children. The President has decided to use this heartless veto to make a political stand, rather than putting kids first.

White House Myth #1: Bipartisan Compromise CHIP Bill Does Not Focus on Poor Kids. “The problem is that the current program — and by the way, there’s about a half a million children who are eligible who aren’t signed up.  So I said, “Why don’t we focus on the poor children rather than expand the program beyond its initial intent?” [President Bush Speech to Lancaster, PA Chamber of Commerce, 10/3/07]

  • FACT:Research Shows 6 Million Children, Not 500,000, Are Eligible for Public Coverage But Are Not Enrolled. Much of the widely-accepted research on the number of uninsured children eligible for public coverage was conducted by the Health Policy Center of the Urban Institute.  These researchers have estimated that six million uninsured children are eligible for public coverage, with approximately two million eligible for CHIP and four million eligible for Medicaid. [Kenney and Cook, Coverage Patterns Among SCHIP-Eligible Children and Their Parents, Urban Institute, February 2007]   
  • FACT:The Bi-Partisan CHIP Bill Does Focus on Poor Children.  The measure ensures that states must cover their lowest-income kids first by phasing in a new requirement for coverage of low-income children as a condition of receiving CHIP funding for coverage of children above 300 percent of the poverty level. After October 1, 2010, federal matching payments are not permitted to States that cover children whose family incomes exceed 300 percent of poverty, if the State does not meet a target for the percentage of children at or below 200 percent of poverty enrolled in CHIP.  The target rate would be the average rate of insurance coverage (public and private) among the highest-ranking 10 States. In reality, CHIP focuses virtually all of its resources on children in the poorest working families, fewer than 1 in 10 kids covered under CHIP lives in a family of four earning more than $41,000 a year.  In addition, our bill further prioritizes children by phasing non-pregnant adults out of the program.  By vetoing the bipartisan bill, the President is continuing his policy of covering non-pregnant adults with CHIP money. [HR 976, 2007]
  • FACT: 70 Percent of Children Covered by the Senate CHIP Bill Would Be from Families Making Under 200 Percent of the Federal Poverty Level. According to a study by the Urban Institute of the Senate-passed bill which is very similar to the bipartisan compromise bill, 70% of kids covered by the bill would be under 200% FPL.  [Kenney, Cook and Pelletier, “SCHIP Reauthorization: How Will Low-Income Kids Benefit Under House and Senate Bills?” Urban Institute, September 2007]

White House Myth #2: Bipartisan Compromise CHIP Bill Would Cover Children From Families Earning Up to $83,000 Per Year. “It is estimated by — well, here’s the thing, just so you know, this program expands coverage — federal coverage — up to families earning $83,000 a year.  That doesn’t sound poor to me. The intent of the program was to focus on poorer children, not adults or families earning up to $83,000 a year.” [President Bush Speech to Lancaster, PA Chamber of Commerce, 10/3/07]

  • FACT: The Bipartisan CHIP Bill Does Not Raise the Eligibility Level To Encourage States to Cover Families up to $83,000. The legislation targets funding to low-income children.  There is nothing in the agreement that changes current rules on interpretation and approval of appropriate income levels for eligibility above 200 percent of the federal poverty level (or 50 percent above a state’s Medicaid income cap) – this decision remains one that the HHS Secretary makes, just as under the original CHIP law written by a Republican-led Congress. [HR 976, 2007]
  • FACT: The Bush Administration Has Issued Numerous Waivers to States to Allowing Them to Increase Income Eligibility Levels. The Bush Administration has issued numerous waivers allowing states to raise their income eligibility limits. The Administration allowed New Jersey to provide coverage to children from families with incomes that are 350 of the Federal Poverty Level (FPL); Georgia to provide coverage to kids from families earning 235 percent of FPL; Hawaii to provide coverage to kids from families earning 300 percent of FPL; Massachusetts to provide coverage to kids from families earning 300 percent of FPL; and Pennsylvania to provide coverage to kids from families earning 300 percent of FPL. [Office of the Governor of New Jersey, 9/10/07; HHS Press Release, 6/4/01; CMS Fact Sheet, 1/30/06; CMS Fact Sheet, April 11, 2007; Kaiser Daily Health Policy Report, February 26, 2007]   
  • FACT: Children from Families At Higher Income Eligibility Levels Pay Significant Premiums and Co-Pays Under Bipartisan CHIP Bill. Under the Bipartisan Children’s Health Insurance bill, children from families at higher income levels would pay significant premiums and co-pays. For instance, New Jersey’s FamilyCare program, which offers coverage to children from families up to 350 percent of the federal poverty level (FPL) due to waivers granted by the Bush Administration, requires families earning 350 percent of FPL to pay $125 in monthly premiums and co-pays of $5 to $35. These fees decrease down the income-eligibility scale. Children from families earning less than 200 percent of FPL pay no premiums and no co-pays. [HR 976, 2007; Office of the Governor of New Jersey, 9/10/07; NJ FamilyCare, What It Costs]

White House Myth #3: Bipartisan Compromise CHIP Bill Would Move Millions of Children With Private Health Insurance to Government Health Care. “The proposal would move millions of American children who now have private health insurance into government-run health care.” [President Bush Press Conference, 9/20/07]

  • Crowd Out Estimates Are Based on Numbers of Uninsured Families Who Might Have Access to Coverage Sometime In the Future. “CBO defines “crowd-out” to include all children who are uninsured when they enroll in SCHIP or Medicaid but whose families would — in the absence of SCHIP or Medicaid — have purchased private coverage for these children at some point in the future, possibly many months later.  Orszag has explained that these children account for a substantial share of those whom CBO estimates would otherwise have private coverage.” [Center for Budget and Policy Priorities, 9/27/07]
  • CBO Director Peter Orszag Said Bipartisan Compromise Bill Was “As Efficient As You Can Possibly Get” in Providing Coverage for the Uninsured. During a Senate Finance Committee hearing, CBO Director Peter Orszag explained that any effort to cover the uninsured would produce some “crowd out,” but that the Finance Committee’s approach, later adopted by both chambers, was as efficient as possible. “In the absence of a mandate, a mandatory system on employers, individuals, or states —  so in a voluntary system where you are trying to provide an incentive to reduce the number of uninsured children, I think this approach is pretty much as efficient as you can possibly get per new dollars spent to get a reduction of roughly 4 million uninsured children.” [Senate Finance Committee Hearing, 7/19/07]
  • Crowd Out Estimates of Bipartisan Compromise CHIP Bill Are Far Lower Than for Administration’s Own Health Tax Proposals. “For example, an analysis of the Administration’s health tax proposals from last year by the noted health economist Jonathan Gruber estimated that 77 percent of the benefits would go to people who already are insured… CBO estimates an overall crowd-out rate of about one-third under the bipartisan SCHIP legislation in part because of what CBO estimates would happen after some children who are uninsured enroll in SCHIP or Medicaid.” [Center for Budget and Policy Priorities, 9/27/07]
  • Studies Found that 72 Percent of Children Enrolled in CHIP Had Been Uninsured or Enrolled in Other Public Coverage in the Six Months Prior to Enrollment. A Congressionally-mandated study of CHIP and a recent peer-reviewed study in Health Affairs concluded that 72 percent of children enrolling in the program had either been uninsured or enrolled in other public coverage in the six months prior to enrollment.  The remaining 28 percent had private coverage prior to enrolment but half involuntarily lost it due to changes in family status or employment.  In addition, one-quarter of recent enrollees who were previously enrolled in private plans had coverage that their families found unaffordable. [Wooldridge and Kenney et al, Congressionally Mandated Evaluation of the State Children’s Health Insurance Program, Final Report To Congress, October 2005; Sommers and Zuckerman et al., Health Affairs, March/April 2007]

White House Myth #4: Bipartisan Compromise CHIP Bill Would Federalize Health Care. “And the policies of the government ought to be, help people find private insurance, not federal coverage. And that’s where the philosophical divide comes in. I happen to believe that what you’re seeing when you expand eligibility for federal programs is the desire by some in Washington, D.C. to federalize health care.” [President Bush Speech to Lancaster, PA Chamber of Commerce, 10/3/07]

  • FACT:The Bipartisan Compromise CHIP Combines the Best of Public and Private Approaches to Provide Health Coverage to Children.  The Children’s Health Insurance Program is not an entitlement program, rather, a capped block grant program for states.  The program affords states great flexibility to offer coverage as they choose. The great majority of CHIP programs are modeled after private insurance and use private plans to deliver benefits. CHIP’s structure in most states is similar to the Medicare prescription drug benefit, in which federal benchmarks and funds guide a program administered largely through private insurers. [HR 976, 2007; Center for Budget and Policy Priorities, 6/12/07]

White House Myth #5: Bipartisan CHIP Proposal Would Be Too Expensive and Raise Taxes. “The proposal congressional leaders are pushing would raise taxes on working Americans and would raise spending by $35 to $50 billion. Their proposal would result in taking a program meant to help poor children and turning it into one that covers children in some households with incomes of up to $83,000 a year.” [President’s Radio Address, 9/22/07]

  • FACT: The Bipartisan CHIP Bill Is Fully Paid For by a Tobacco Tax. As with the current Children’s Health Insurance Program, the bi-partisan measure calls for a moderate increase in the tax already imposed on tobacco products. Specifically, the measure creates new revenue from a 61-cent increase in the excise tax on cigarettes, as well as a proportional increase on all other tobacco products. [Senate Finance Committee Press Release, 9/21/07]
  • FACT: Americans Overwhelmingly Support Increasing Taxes on Tobacco to Fund Children’s Health Care. The bi-partisan CHIP proposal is paid for with a slight increase in the tax on tobacco products. According to a recent survey, two-thirds of Americans support a tobacco tax increase to fund children’s health care and most want to vote for a candidate who does as well. [American Medical Association Press Release, 6/19/07]