Health Care

Summary

Within all candidate and representative profiles is a tab expressing that person's views on health care. This includes their views on broader topics such as how much federal and state involvement there should be in health care, and how much government should regulate the health insurance industry. It also includes that candidate's or representative's views on numerous specific topics. These topics include:

  • Medicare
  • Medicaid
  • SCHIP - State Children's Health Insurance Program
  • 2009-2010 Health Care Reform - Obamacare
  • The Public Option
  • Single Payer Insurance
  • Tort Reform
  • Employment Based Insurance vs Purchasing
  • Pre-existing Conditions
  • Purchasing Insurance Across State Lines

 

Legislation

 

Medicare Part D Bill Summary Bill Text
Children's Health Insurance Program Reauthorization Act of 2009 Bill Summary Bill Text
 Affordable Health Care for America Act Bill Summary  Bill Text 
Patient Protection and Affordable Care Act Bill Summary Bill Text
Health Care and Education Reconciliation Act of 2010 Bill Summary Bill Text
Family Smoking Prevention and Tobacco Control Act Bill Summary Bill Text

 

Summary

Medicare is a social insurance program administered by the United States government, providing health insurance coverage to people who are aged 65 and over; to those who are under 65 and are permanently physically disabled or who have a congenital physical disability; or to those who meet other special criteria. Before Medicare, only 51% of people aged 65 and older had health care coverage, and nearly 30% lived below the federal poverty level. "Original Medicare" plans (when Medicare Advantage has not been elected) cover 80% of the Medicare-approved amount of any given medical cost; the remaining 20% of cost must be paid by either a Medicare Supplement plan, which is a "supplemental insurance" from a private health insurance company (normally requiring a monthly insurance premium paid to that company by the holder), or out-of-pocket via the patient's own personal funds (check, money order, cash, etc.). Medicare Advantage plans are not Medicare Supplements, but take the place of "Original Medicare". In return for a premium, these plans share costs and cap out of pocket expenses.

 

Taxes imposed to finance Medicare

Medicare is financed by payroll taxes imposed by the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act of 1954. In the case of employees, the tax is equal to 2.9% (1.45% withheld from the worker and a matching 1.45% paid by the employer) of the wages, salaries and other compensation in connection with employment. Until December 31, 1993, the law provided a maximum amount of compensation on which the Medicare tax could be imposed each year. Beginning January 1, 1994, the compensation limit was removed. A self-employed individual must pay the entire 2.9% tax on self employed net earnings, but may deduct half of the tax from the income in calculating income tax.[citation needed] Beginning in 2013, the 2.9% hospital insurance tax will continue to apply to the first US$200,000 of income for individuals or $250,000 for couples filing jointly and will rise to 3.8% on income in excess of those amounts.

 

Eligibility

In general, all persons 65 years of age or older who have been legal residents of the United States for at least 5 years are eligible for Medicare. People with disabilities under 65 may also be eligible if they receive Social Security Disability Insurance (SSDI) benefits. Specific medical conditions may also help people become eligible to enroll in Medicare.

People qualify for Medicare coverage, and Medicare Part A premiums are entirely waived, if the following circumstances apply:

  • They are 65 years or older and U.S. citizens or have been permanent legal residents for 5 continuous years, and they or their spouse has paid Medicare taxes for at least 10 years.
  • They are under 65, disabled, and have been receiving either Social Security SSDI benefits or Railroad Retirement Board disability benefits; they must receive one of these benefits for at least 24 months from date of entitlement (first disability payment) before becoming eligible to enroll in Medicare.
  • They get continuing dialysis for end stage renal disease or need a kidney transplant.
  • They are eligible for Social Security Disability Insurance and have amyotrophic lateral sclerosis (known as ALS or Lou Gehrig's disease).

Those who are 65 and older must pay a monthly premium to remain enrolled in Medicare if they or their spouse have not paid Medicare taxes over the course of 10 years while working.

People with disabilities who receive SSDI are eligible for Medicare while they continue to receive SSDI payments; they lose eligibility for Medicare based on disability if they stop receiving SSDI. The 24 month exclusion means that people who become disabled must wait 2 years before receiving government medical insurance, unless they have one of the listed diseases or they are eligible for Medicaid.

Many beneficiaries are dual-eligible. This means they qualify for both Medicare and Medicaid. In some states for those making below a certain income, Medicaid will pay the beneficiaries' Part B premium for them (most beneficiaries have worked long enough and have no Part A premium), and also pay for any drugs that are not covered by Part D.

In 2008, Medicare provided health care coverage for 45 million Americans.[8] Enrollment is expected to reach 78 million by 2030, when the baby-boom generation is fully enrolled.

 

Benefits

Medicare has four parts: Part A is Hospital Insurance. Part B is Medical Insurance. Medicare Part D covers prescription drugs. Medicare Advantage plans, also known as Medicare Part C, are another way for beneficiaries to receive their Part A, B and D benefits. All Medicare benefits are subject to medical necessity.

The original program included Parts A and B. Part D was introduced in January 2006; before that, Parts A and B covered prescription drugs in a few special cases.

Part A: Hospital Insurance

Part A covers inpatient hospital stays (at least overnight), including semiprivate room, food, and tests.

Part A covers brief stays for convalescence in a skilled nursing facility if certain criteria are met:

  1. A preceding hospital stay must be at least three days, three midnights, not counting the discharge date.
  2. The nursing home stay must be for something diagnosed during the hospital stay or for the main cause of hospital stay.
  3. If the patient is not receiving rehabilitation but has some other ailment that requires skilled nursing supervision then the nursing home stay would be covered.
  4. The care being rendered by the nursing home must be skilled. Medicare part A does not pay for custodial, non-skilled, or long-term care activities, including activities of daily living (ADL) such as personal hygiene, cooking, cleaning, etc.

The maximum length of stay that Medicare Part A will cover in a skilled nursing facility per ailment is 100 days. The first 20 days would be paid for in full by Medicare with the remaining 80 days requiring a co-payment (as of 2011, $141.50 per day). Many insurance companies have a provision for skilled nursing care in the policies they sell.

If a beneficiary uses some portion of their Part A benefit and then goes at least 60 days without receiving facility-based skilled services, the 100-day clock is reset and the person qualifies for a new 100-day benefit period.

Part B: Medical Insurance

Part B medical insurance helps pay for some services and products not covered by Part A, generally on an outpatient basis. Part B is optional and may be deferred if the beneficiary or his/her spouse is still working. There is a lifetime penalty (10% per year) imposed for not enrolling in Part B unless actively working. Part B coverage begins once a patient meets his or her deductible, then typically Medicare covers 80% of approved services, while the remaining 20% is paid by the patient.

Part B coverage includes physician and nursing services, x-rays, laboratory and diagnostic tests, influenza and pneumonia vaccinations, blood transfusions, renal dialysis, outpatient hospital procedures, limited ambulance transportation, immunosuppressive drugs for organ transplant recipients, chemotherapy, hormonal treatments such as Lupron, and other outpatient medical treatments administered in a doctor's office. Medication administration is covered under Part B if it is administered by the physician during an office visit.

Part B also helps with durable medical equipment (DME), including canes, walkers, wheelchairs, and mobility scooters for those with mobility impairments. Prosthetic devices such as artificial limbs and breast prosthesis following mastectomy, as well as one pair of eyeglasses following cataract surgery, and oxygen for home use is also covered.

Complex rules are used to manage the benefit, and advisories are periodically issued which describe coverage criteria. On the national level these advisories are issued by CMS, and are known as National Coverage Determinations (NCD). Local Coverage Determinations (LCD) apply within the multi-state area managed by a specific regional Medicare Part B contractor, and Local Medical Review Policies (LMRP) were superseded by LCDs in 2003. Coverage information is also located in the CMS Internet-Only Manuals (IOM), the Code of Federal Regulations (CFR), the Social Security Act, and the Federal Register.

Part C: Medicare Advantage plans

With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were given the option to receive their Medicare benefits through private health insurance plans, instead of through the original Medicare plan (Parts A and B). These programs were known as "Medicare+Choice" or "Part C" plans. Pursuant to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, "Medicare+Choice" plans were made more attractive to Medicare beneficiaries by the addition of prescription drug coverage and became known as "Medicare Advantage" (MA) plans. Medicare Advantage plans are offered through private companies known as Medicare Advantage Organizations (MAO). Each of them under the contract from CMS are required to provide an effective compliance program to prevent Fraud, Waste and Abuse issues in healthcare settings.

Traditional or "fee-for-service" Medicare has a standard benefit package that covers medically necessary care members can receive from nearly any hospital or doctor in the country. For people who choose to enroll in a Medicare Advantage health plan, Medicare pays the private health plan a fixed amount every month. Members typically also pay a monthly premium in addition to the Medicare Part B premium to cover items not covered by traditional Medicare (Parts A & B), such as prescription drugs, dental care, vision care and gym or health club memberships. In exchange for these extra benefits, enrollees may be limited in the providers they can receive services from without paying extra. Typically, the plans have a "network" of providers that patients can use. Going outside that network may require permission or extra fees.

List of Federal laws that each MAO or Part D sponsor must follow

  • Conflict of interest
  • HIPAA privacy laws
  • False Claims Act
  • Anti-Kickback Statute
  • STARK Anti-referral law

Medicare Advantage plans are required to offer coverage that meets or exceeds the standards set by the original Medicare program, but they do not have to cover every benefit in the same way. If a plan chooses to pay less than Medicare for some benefits, like skilled nursing facility care, the savings may be passed along to consumers by offering lower co-payments for doctor visits. Medicare Advantage plans use a portion of the payments they receive from the government for each enrollee to offer supplemental benefits. Some plans limit their members’ annual out-of-pocket spending on medical care, providing insurance against catastrophic costs over $5,000, for example. Many plans offer dental coverage, vision coverage and other services not covered by Medicare Parts A or B, which makes them a good value for the health care dollar, if you want to use the provider included in the plan's network or "panel" of providers.

Because the 2003 payment formulas overpay plans by 12 percent or more compared to traditional Medicare, in 2006 enrollees in Medicare Advantage Private Fee-for-Service plans were offered a net extra benefit value (the value of the additional benefits minus any additional premium) of $55.92 a month more than the traditional Medicare benefit package; enrollees in other Medicare Advantage plans were offered a net extra benefit value of $71.22 a month more. However, Medicare Advantage members receive additional coverage and medical benefits not enjoyed by traditional Medicare members, and savings generated by Medicare Advantage plans may be passed on to beneficiaries to lower their overall health care costs. Other important distinctions between Medicare Advantage and traditional Medicare are that Medicare Advantage health plans encourage preventive care and wellness and closely coordinate patient care.

Medicare Advantage Plans that also include Part D prescription drug benefits are known as a Medicare Advantage Prescription Drug plan or a MA-PD.

Enrollment in Medicare Advantage plans grew from 5.4 million in 2005 to 8.2 million in 2007. Enrollment grew by an additional 800,000 during the first four months of 2008. This represents 19% of Medicare beneficiaries. A third of beneficiaries with Part D coverage are enrolled in a Medicare Advantage plan. Medicare Advantage enrollment is higher in urban areas; the enrollment rate in urban counties is twice that in rural counties (22% vs. 10%). Almost all Medicare beneficiaries have access to at least two Medicare Advantage plans; most have access to three or more. Because of the 2003 law's overpayments, the number of organizations offering Fee-for-Service plans has increased dramatically, from 11 in 2006 to almost 50 in 2008. Eight out of ten beneficiaries (82%) now have access to six or more Private Fee-for-Service plans.

Each year many individuals disenroll from MA plans. A recent study noted that about 20 percent of enrollees report that "their most important reason for leaving was due to problems getting care." There is some evidence that disabled beneficiaries "are more likely to experience multiple problems in managed care." Some studies have reported that the older, poorer, and sicker persons have been less satisfied with the care they have received in MA plans.[18] On the other hand, an analysis of the Agency for Healthcare Research and Quality data published by America’s Health Insurance Plans found that Medicare Advantage enrollees spent fewer days in the hospital than Fee-for-Service enrollees, were less likely to have "potentially avoidable" admissions, and had fewer re-admissions. These comparisons adjusted for age, sex and health status using the risk score used in the Medicare Advantage risk adjustment mechanism.

In December 2009 the Kaiser Family Foundation published a report that rated Medicare Advantage organizations on a five star scale. The ratings were based on data from CMS, the Consumer Assessment of Healthcare Providers and Systems (CAHPS), Healthcare Effectiveness Data and Information Set (HEDIS) data, and the Health Outcomes Survey (HOS). New plans did not receive ratings, because data was not available. Almost six out of ten (59%) of MA plans did receive ratings, and these plans represented 85% of the enrollment for 2009. The average rating was 3.29 stars. Twenty-three percent of enrollees were in a plan with four or more stars; 20% were in a plan with fewer than three stars.

Twenty percent of Black-American and 32 percent of Hispanic-American Medicare Beneficiaries were enrolled in Medicare Advantage plans in 2006. Almost half (48%) of Medicare Advantage enrollees had incomes below $20,000, including 71% of minority enrollees. Others have reported that minority enrollment is not particularly above average. Another study has raised questions about the quality of care received by minorities in MA plans.

The Government Accountability Office reported that in 2006, the plans earned profits of 6.6 percent, had overhead (sales, etc.) of 10.1 percent, and provided 83.3 percent of the revenue dollar in medical benefits. These administrative costs are far higher than traditional fee-for-service Medicare.

Part D: Prescription Drug plans

Medicare Part D went into effect on January 1, 2006. Anyone with Part A or B is eligible for Part D. It was made possible by the passage of the Medicare Prescription Drug, Improvement, and Modernization Act. In order to receive this benefit, a person with Medicare must enroll in a stand-alone Prescription Drug Plan (PDP) or Medicare Advantage plan with prescription drug coverage (MA-PD). These plans are approved and regulated by the Medicare program, but are actually designed and administered by private health insurance companies. Unlike Original Medicare (Part A and B), Part D coverage is not standardized. Plans choose which drugs (or even classes of drugs) they wish to cover, at what level (or tier) they wish to cover it, and are free to choose not to cover some drugs at all. The exception to this is drugs that Medicare specifically excludes from coverage, including but not limited to benzodiazepines, cough suppressant and barbiturates. Plans that cover excluded drugs are not allowed to pass those costs on to Medicare, and plans are required to repay CMS if they are found to have billed Medicare in these cases.[

It should be noted again for beneficiaries who are dual-eligible (Medicare and Medicaid eligible) Medicaid may pay for drugs not covered by part D of Medicare, such as benzodiazepines, and other restricted controlled substances.

 

Medicaid is the United States health program for certain people and families with low incomes and resources. It is a means-tested program that is jointly funded by the state and federal governments, and is managed by the states. People served by Medicaid are U.S. citizens or legal permanent residents, including low-income adults, their children, and people with certain disabilities. Poverty alone does not necessarily qualify someone for Medicaid. Medicaid is the largest source of funding for medical and health-related services for people with limited income in the United States.

Medicaid was created by the Social Security Amendments of 1965 which added Title XIX to the Social Security Act. Each state administers its own Medicaid program while the federal Centers for Medicare and Medicaid Services (CMS) monitors the state-run programs and establishes requirements for service delivery, quality, funding, and eligibility standards.

A few states have their own names for Medicaid. Examples are "Medi-Cal" in California, "MassHealth" in Massachusetts, "Oregon Health Plan" in Oregon, "TennCare" in Tennessee, "Soonercare" in Oklahoma. States may bundle together the administration of Medicaid with other programs such as the Children's Health Insurance Program (CHIP), so the same organization that handles Medicaid in a state may also manage the additional programs. Separate programs may also exist in some localities that are funded by the states or their political subdivisions to provide health coverage for indigents and minors.

State participation in Medicaid is voluntary; however, all states have participated since 1982 when Arizona formed its Arizona Health Care Cost Containment System (AHCCCS) program. In some states Medicaid is subcontracted to private health insurance companies, while other states pay providers (i.e., doctors, clinics and hospitals) directly.

Some states have incorporated the use of private companies to administer portions of their Medicaid benefits. These programs, typically referred to as Medicaid managed care, allow private insurance companies or health maintenance organizations to contract directly with a state Medicaid department at a fixed price per enrollee. The health plans then enroll eligible people into their programs and become responsible for assuring Medicaid benefits are delivered to beneficiaries.

Also included in the Social Security program under Medicaid are dental services. These dental services are an optional service for adults above the age of 21; however, this service is a requirement for those eligible for Medicaid and below the age of 21. Minimum services include pain relief, restoration of teeth and maintenance for dental health. Early and Periodic Screening, Diagnostic and Treatment (EPSDT) is a mandatory Medicaid program for children that aims to focus on prevention on early diagnosis and treatment of medical conditions.[2] Oral screenings are not required for EPSDT recipients and they do not suffice as a direct dental referral. If a condition requiring treatment is discovered during an oral screening, the state is responsible for taking care of this service, regardless if it is covered on that particular Medicaid plan.

The Medicaid Drug Rebate Program was created by the Omnibus Reconciliation Act of 1990. This act helped to add Section 1927 to the Social Security Act of 1935 which became effective on January 1, 1991. This program was formed due to the costs that Medicaid programs were paying for outpatient drugs at their discounted prices.

The Omnibus Reconciliation Act of 1993 (OBRA 93') amended Section 1927 of the Act as it brought changes to the Medicaid Drug Rebate Program.

Loss of income and medical insurance coverage during the 2008-2009 recession resulted in a substantial increase in Medicaid enrollment in 2009. Nine U.S. states showed an increase in enrollment of 15% or more, resulting in heavy pressure on state budgets.

Comparisons with Medicare

Medicare is a social insurance program funded entirely at the federal level[6] and focuses primarily on the older population. As stated in the CMS website, Medicare is a health insurance program for people age 65 or older, people under age 65 with certain disabilities, and people of all ages with end stage renal disease. The Medicare Program provides a Medicare part A which covers hospital bills, Medicare Part B which covers medical insurance coverage, and Medicare Part D which covers prescription drugs.

Medicaid is a program that is not solely funded at the federal level. States provide up to half of the funding for the Medicaid program. In some states, counties also contribute funds. Unlike the Medicare entitlement program, Medicaid is a means-tested, needs-based social welfare or social protection program rather than a social insurance program. Eligibility is determined largely by income. The main criterion for Medicaid eligibility is limited income and financial resources, a criterion which plays no role in determining Medicare coverage. Medicaid covers a wider range of health care services than Medicare. Some people are eligible for both Medicaid and Medicare and are known as Medicare dual eligibles. In 2001, about 6.5 million Americans were enrolled in both Medicare and Medicaid.
 

Eligibility

Medicaid is a joint federal-state program that provides health coverage or nursing home coverage to certain categories of low-asset people, including children, pregnant women, parents of eligible children, people with disabilities and elderly needing nursing home care. Medicaid was created to help low-asset people who fall into one of these eligibility categories "pay for some or all of their medical bills."[9] There are two general types of Medicaid coverage. "Community Medicaid" helps people who have little or no medical insurance. Medicaid nursing home coverage pays all of the costs of nursing homes for those who are eligible except that the recipient pays most of his/her income toward the nursing home costs, usually keeping only $66.00 a month for expenses other than the nursing home. While Congress and the Centers for Medicare and Medicaid Services (CMS) set out the general rules under which Medicaid operates, each state runs its own program. Under certain circumstances, an applicant may be denied coverage. As a result, the eligibility rules differ significantly from state to state, although all states must follow the same basic framework.

Poverty

Having limited assets is one of the primary requirements for Medicaid eligibility, but poverty alone does not qualify a person to receive Medicaid benefits unless they also fall into one of the defined eligibility categories. According to the CMS website, "Medicaid does not provide medical assistance for all poor persons. Even under the broadest provisions of the Federal statute (except for emergency services for certain persons), the Medicaid program does not provide health care services, even for very poor persons, unless they are in one of the designated eligibility groups."

Categories

There are a number of Medicaid eligibility categories; within each category there are requirements other than income that must be met. These other requirements include, but are not limited to, assets, age, pregnancy, disability, blindness, income and resources, and one's status as a U.S. citizen or a lawfully admitted immigrant. Special rules exist for those living in a nursing home and disabled children living at home. A child may be covered under Medicaid if she or he is a U.S. citizen or a permanent resident. A child may be eligible for Medicaid regardless of the eligibility status of his or her parents or guardians. Thus, a child can be covered by Medicaid based on his or her individual status even if his or her parents are not eligible. Similarly, if a child lives with someone other than a parent, he or she may still be eligible based on his or her individual status.

Coverage and Utilization

One-third of children and over half (59%) of low-income children are insured through Medicaid or SCHIP. The insurance provides them with access to preventative and primary services which are utilized at a much higher rate than for the uninsured, but still below the utilization of privately insured patients. As of February 2011, a record 90% of children have coverage. However, 8 million children remain uninsured, including 5 million who are eligible for Medicaid and SCHIP but not enrolled.

Dental

Children enrolled in Medicaid are individually entitled under the law to comprehensive preventive and restorative dental services, dental care utilization for this population is low. The reasons for low utilization are many, but a lack of dental providers who participate in Medicaid is a key factor. Group dental practices are some of the few dentists who accept children and adults insured with Medicaid.[16] Few dentists participate in Medicaid – less than as half of all active private dentists in some areas. Low reimbursement rates, complex forms and burdensome administrative requirements are commonly cited by dentists as reasons for not participating in Medicaid.

HIV

Medicaid provided the largest portion of federal money spent on health care for people living with HIV/AIDS until the implementation of Medicare Part D when the prescription drug costs for those eligible for both Medicare and Medicaid shifted to Medicare. Unless low income people who are HIV positive meet some other eligibility category, they must progress to AIDS (T-cell count drops below 200) before they can qualify under the "disabled" category to receive Medicaid assistance.[20] The Medicaid eligibility policy contrasts with the Journal of the American Medical Association (JAMA) guidelines which recommend therapy for all patients with T-cell counts of 350 or less, or in certain patients even higher. Due to the high costs associated with HIV medications, many patients are not able to begin antiretroviral treatment without Medicaid help. More than half of people living with AIDS in the US are estimated to receive Medicaid payments. Two other programs that provide financial assistance to people living with HIV/AIDS are the Social Security Disability Insurance (SSDI) and the Supplemental Security Income.

Supplemental Security Income Beneficiaries

Once someone is approved as a beneficiary in the Supplemental Security Income program they may automatically be eligible for Medicaid coverage (depending on the laws of the state they reside in).
 

Recent changes

Both the federal government and state governments have made changes to the eligibility requirements and restrictions over the years. The Deficit Reduction Act of 2005 (DRA) (Pub.L. No. 109-171) significantly changed the rules governing the treatment of asset transfers and homes of nursing home residents.] The implementation of these changes proceeded state-by-state over the next few years and has now been substantially completed.

The DRA now requires that anyone seeking Medicaid must produce documents to prove that he or she is a United States citizen or resident alien. An exception is made for Emergency Medicaid where payments are allowed for the pregnant and disabled regardless of immigration status.

The DRA created a five-year "look-back period." That means that any transfers without fair market value (gifts of any kind) made by the Medicaid applicant during the preceding five years are penalizable, dollar for dollar. All transfers made during the five-year look-back period are totaled, and the applicant is penalized that amount after having already dropped below the Medicaid asset limit. This means that after dropping below the asset level ($2,000 limit in most states), the Medicaid applicant then has to re-pay all transfers during the preceding five years by private-paying for nursing home costs. Since the person has less than $2,000, there is no source of funds to pay the penalty. Elders who gift or transfer assets can be caught in the situation of having no money but still not being eligible for Medicaid.

There is misunderstanding about what a senior can legally gift without Medicaid penalties. There is a widespread belief that it is legal to gift $10,000 per person per year. The annual gifting exclusion is actually $13,000 a year as of 2009. But the gift exclusion is only a federal gift tax rule. If a person gifts $13,000 or less during a year, that gift is not required to be reported and does not generate gift tax liability for the donor or the recipient. But Medicaid has never honored the annual gift tax exclusion. Gifts of any size during the five years preceding a Medicaid application are totaled and penalized dollar for dollar.

A cottage industry has developed with attorneys providing "Medicaid planning" for those in a nursing home or likely to be admitted. The attorneys develop plans to convert countable assets to exempt assets, thereby making an elder with excess assets eligible. Planning techniques can also prevent the homestead from being lost to a Medicaid lien. Legal asset protection can be done at any point since it is not a transfer without fair market value and is not governed by the five-year look-back period.

Medicaid does not pay benefits to individuals directly; Medicaid sends benefit payments to health care providers. In some states Medicaid beneficiaries are required to pay a small fee (co-payment) for medical services.

 

The State Children's Health Insurance Program (SCHIP) – later known more simply as the Children's Health Insurance Program (CHIP) – is a program administered by the United States Department of Health and Human Services that provides matching funds to states for health insurance to families with children. The program was designed to cover uninsured children in families with incomes that are modest but too high to qualify for Medicaid.

At its creation in 1997, SCHIP was the largest expansion of taxpayer-funded health insurance coverage for children in the U.S. since Medicaid began in the 1960s. The statutory authority for SCHIP is under title XXI of the Social Security Act. It was sponsored by Senator Edward Kennedy in a partnership with Senator Orrin Hatch with support coming from First Lady Hillary Rodham Clinton during the Clinton administration.

States are given flexibility in designing their SCHIP eligibility requirements and policies within broad federal guidelines. Some states have received authority through waivers of statutory provisions to use SCHIP funds to cover the parents of children receiving benefits from both SCHIP and Medicaid, pregnant women, and other adults. SCHIP covered 6.6 million children and 670,000 adults at some point during federal fiscal year 2006, and every state, except Arizona has an approved plan. Despite SCHIP, the number of uninsured children continued to rise, particularly among families that cannot qualify for SCHIP. An October 2007 study by the Vimo Research Group found that 68.7 percent of newly uninsured children were in families whose incomes were 200 percent of the federal poverty level or higher. In FY 2008, the program faced funding shortfalls in several states.

During the administration of George W. Bush, two attempts to expand funding for the program failed when President Bush vetoed them. Mr. Bush argued that such efforts were steps toward federalization of health care, and would "steer the program away from its core purpose of providing insurance for poor children and toward covering children from middle-class families." On February 4, 2009, President Barack Obama signed the Children's Health Insurance Reauthorization Act of 2009, expanding the healthcare program to an additional 4 million children and pregnant women, including for the first time legal immigrants without a waiting period.

As a part of the fallout from the failed 1993 Clinton health care plan, both Democratic Senator Ted Kennedy and the Clinton administration were looking for smaller initiatives for publicly-funded health care that could gain bipartisan support.

Kennedy was intrigued by a children's health insurance plan in Massachusetts that had passed in 1996, and met with a Boston Medical Center pediatrics director and a Massachusetts state legislator to discuss the feasibility of a national initiative. Kennedy also saw using an increase in tobacco taxes as a way to pay for the expanded coverage. Thus, in October 1996, Kennedy introduced a bill to provide health care coverage for children of the working poor, to be financed via a 75 cents a pack cigarette tax increase.

Meanwhile, in December 1996 First Lady Hillary Rodham Clinton examined several possible such initiatives and decided expanding health care insurance to children who had none was the one to advance,] especially as its focus on children would be politically popular. Indeed, a different variant of this approach, dubbed "Kids First", had been envisioned as a backup plan during the original 1993 Task Force on National Health Care Reform meetings. Additionally, Hillary Clinton had discussed an SCHIP-ish program with a White House health policy coordinator during the time her full-blown health care plan had suffered political failure.

The new initiative was proposed at Bill Clinton's January 1997 State of the Union address, with the stated goal of coverage up to five million children. Kennedy continued to write much of the bill, using the increase in tobacco taxes to pay the $20 billion price tag. In March 1997, Kennedy brought Republican Senator Orrin Hatch onto the legislation as co-sponsor; Kennedy and Hatch had worked together as an "odd couple" in the Senate before, and here Hatch said that "Children are being terribly hurt and perhaps scarred for the rest of their lives" and that "as a nation, as a society, we have a moral responsibility" to provide coverage. Hatch's role would infuriate some Republican colleagues and conservative commentators. The First Lady did not hold news conferences or testify before Congress on behalf of the bill.

An initial objection of Republicans in the Senate was that proposing to pay for the services by raising the federal tax on cigarettes, from 24 cents a pack to 67 cents a pack, ignored the likely consequence that sale of tobacco products would decrease and tax revenues would increasingly fall short of those needed to pay for the expansion of benefits. Kennedy and Hatch scoffed at the objection, with the former saying, "If we can keep people healthy and stop them from dying, I think most Americans would say 'Amen; isn't that a great result?' If fewer people smoke, states will save far more in lower health costs than they will lose in revenues from the cigarette tax." Republicans also criticized the bill as an open-ended entitlement program, although it was structured as a block grant rather than an entitlement; Senate Majority Leader Trent Lott was an early opponent of the measure, calling it a "big-government program" that would not pass.

Then the bill had to comply with the existing balanced budget agreement between Congress and the White House, something that Lott said it did not. Pressure was on to reduce the amount of grants involved, with $16 billion a possible compromise; Hillary Clinton instead argued for $24 billion. The Clinton administration had a deal with the Republican leadership in Congress that forbade the administration from backing any amendments to the budget resolution. Thus, Bill Clinton phoned members of Congress and asked that they kill the children's health insurance provision when it came to the floor. On May 22, it was so done, with the necessary cigarette tax amendment defeated by a 55–45 margin. Hillary Clinton defended her husband's action at the time, saying "He had to safeguard the overall budget proposal," but Kennedy was surprised and angered by it, considering it a betrayal, and saying that his calls to Bill Clinton and Vice President Al Gore had not been returned. Hatch was also upset, saying that Lott may have been bluffing and that, "I think the President and the people in the White House caved here."

Kennedy did not give up on the measure, saying: "We shall offer it again and again until we prevail. It's more important to protect children than to protect the tobacco industry." Both Bill and Hillary Clinton argued for including the children's health insurance in subsequent legislation. The bill was indeed revived by Kennedy and Hatch a month after its initial defeat. Organizations from the Children's Defense Fund to the Girl Scouts of the USA lobbied for its passage, putting public pressure on Congress; Hillary Clinton was pushing for it as well, with Kennedy urging her to use her influence within the White House, SCHIP was then passed and signed into law by Bill Clinton on August 5, 1997 as part of the Balanced Budget Act of 1997, to take effect the following month.[19] At a press conference following the signing, Kennedy thanked Hatch, Senate Minority Leader Tom Daschle, Children's Defense Fund head Marian Wright Edelman, Bill Clinton, and Hillary Clinton. About the latter, Kennedy said, "Mrs. Clinton ... was of invaluable help, both in the fashioning and the shaping of the program and also as a clear advocate."

SCHIP is located at Title IV, subtitle J of H.R. 2015 [105th] Balanced Budget Act of 1997. H.R. 2015 was introduced and sponsored by Rep John Kasich [R-OH] with no cosponsors.[20] On 25 June 1997, H.R. 2015 passed House Vote Roll #241 mainly among partisan lines, 270 ayes and 162 nays, with most Democrats in the House of Representatives in opposition. On the same day, the bill passed in the Senate, with a substitute amendment, by unanimous consent. After a conference between the House and Senate, passage in both House (Roll #345: 346-85) and Senate (Roll #209: 85-15) on the conference substitute became more bipartisan.

State administration

Like Medicaid, SCHIP is a partnership between federal and state governments. The programs are run by the individual states according to requirements set by the federal Centers for Medicare and Medicaid Services. States may design their SCHIP programs as an independent program separate from Medicaid (separate child health programs), use SCHIP funds to expand their Medicaid program (SCHIP Medicaid expansion programs), or combine these approaches (SCHIP combination programs). States receive enhanced federal funds for their SCHIP programs at a rate above the regular Medicaid match.

By February 1999, 47 states had set up SCHIP programs, but it took effort to get children enrolled. That month, the Clinton administration launched the "Insure Kids Now" campaign, designed to get more children enrolled; the campaign would fall under the aegis of the Health Resources and Services Administration. By April 1999, some 1 million children had been enrolled, and the Clinton administration set a goal of raising the figure to 2.5 million by 2000.

States with separate child health programs follow the regulations described in Section 42 of the Code of Federal Regulations, Section 457. Separate child health programs have much more flexibility than Medicaid programs. Separate programs can impose cost sharing, tailor their benefit packages, and employ a great deal of flexibility in eligibility and enrollment matters. The limits to this flexibility are described in the regulations, and states must describe their program characteristics in their SCHIP state plans. Out of 50 state governors, 43 support SCHIP renewal. Some states have incorporated the use of private companies to administer portions of their SCHIP benefits. These programs, typically referred to as Medicaid managed care, allow private insurance companies or health maintenance organizations to contract directly with a state Medicaid department at a fixed price per enrollee. The health plans then enroll eligible individuals into their programs and become responsible for assuring SCHIP benefits are delivered to eligible beneficiaries.

In Ohio, SCHIP funds are used to expand eligibility for the state's Medicaid program. Thus all Medicaid rules and regulations (including cost sharing and benefits) apply. Children from birth through age 18 who live in families with incomes above the Medicaid thresholds in 1996 and up to 200% of the federal poverty level are eligible for the SCHIP Medicaid expansion program. In 2008, the maximum annual income needed for a family of four to fall within 100% of the federal poverty guidelines was $21,200, while 200% of the poverty guidelines was $42,400.

Other states have similar SCHIP guidelines, with some states being more generous or restrictive in the number of children they allow into the program. SCHIP Medicaid expansion programs typically use the same names for the expansion and Medicaid programs. Separate child health programs typically have different names for their programs. A few states also call the SCHIP program by the term "Children's Health Insurance Program" (CHIP).

States are allowed to use Medicaid and SCHIP funds for premium assistance programs that help eligible individuals purchase private health insurance. As of 2008 relatively few states had premium assistance programs, and enrollment was relatively low. Interest in this approach remained high, however.

In August 2007, the Bush Administration announced a rule requiring states (as of August 2008) to sign up 95% of families with children, earning 200% of the federal poverty level, before using the funds to serve families earning more than 250% of the federal poverty level. The federal government said that 9 out the 17 states that offer benefits to higher-earning families were already compliant. Opponents of this rule argued that signing up higher-income families makes lower-income families more likely to sign up, and that the rule was incompassionate toward children who would otherwise go without medical insurance.

Debate over impacts

SCHIP has cost the federal government $40 billion over its first 10 years, and the debate over its fiscal impacts reflects the larger debate in the U.S. over the government's role in health care.

In 2007, researchers from Brigham Young University and Arizona State found that children who drop out of SCHIP cost states more money because they shift away from routine care to more frequent emergency care situations. The conclusion of the study is that an attempt to cut the costs of a state healthcare program could create a false savings because other government organizations pick up the tab for the children who lose insurance coverage and later need care.

Detractors of the program focus on the impact to the private health insurance industry. In a 2007 analysis by the Congressional Budget Office, researchers determined that "for every 100 children who gain coverage as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children." The CBO speculates this is because the state programs offer better benefits at lower cost to enrollees than the private alternatives. A briefing paper by libertarian think-tank Cato Institute estimated the "crowding out" of private insurers by the public program could be as much as 60%.

Reauthorization

SCHIP was created in 1997 as a ten-year program; to continue past federal fiscal year 2007, passage of a reauthorization bill was required. The first two reauthorization bills to pass through Congress would also expand the program's scope; President George W. Bush vetoed them as improper expansions. A two-year reauthorization bill was signed into law by the President in December 2007 that would merely extend current SCHIP services without expanding any portion of the program. With the 2008 Presidential and Congressional elections bringing Democrats to a majority in both houses of Congress and to the Oval Office, SCHIP was reauthorized and expanded in the same bill through fiscal year 2013.

2007 reauthorization

HR 976

In 2007, both houses of Congress passed a bipartisan measure to expand the SCHIP program, H.R. 976. The measure would have expanded coverage to over 4 million more participants by 2012, while phasing out most state expansions in the program that include any adults other than pregnant women. The bill called for a budget increase for five years totaling $35 billion, increasing total SCHIP spending to $60 billion for the five-year period. Opposition to HR 976 focused on the $35 billion increase in government health insurance as well as $6.5 billion in Medicaid benefits to illegal immigrants. Originally intended to provide health care coverage to low-income children, HR 976 was criticized as a giveaway that would have benefited adults as well as non-U.S. citizens. The program expansion was to have been funded by sharply increasing federal excise taxes on tobacco products. On the other hand, opponents said this proposed expansion was for families with annual incomes up to $82,600 (400 percent of the federal poverty level)

On October 3, 2007, President Bush vetoed the bill, stating that he believed it would "federalize health care", expanding the scope of SCHIP much farther than its original intent. The veto was the fourth of his administration.] After his veto, Bush said he was open to a compromise that would entail more than the $5 billion originally budgeted, but would not agree to any proposal drastically expanding the number of children eligible for coverage.

On October 18, 2007, the House of Representatives fell 13 votes short (273-156) of the two-thirds majority required to override the president's veto, although 44 Republicans joined 229 Democrats in supporting the measure.

HR 3963

Within a week of the failed veto override vote, the House passed a second bill attempting a similar expansion of SCHIP. According to Democrats, the second bill, H.R. 3963, created firmer caps on income eligibility, prevented adults from joining, and banned children of illegal immigrants from receiving benefits. According to its opponents, however, this second proposed expansion was for families with annual incomes up to $62,000 (300 percent of the federal poverty level). The Senate passed the measure on November 1, 2007, but on December 12, 2007, Bush vetoed this bill as well, saying it was "essentially identical" to the earlier legislation, and a House vote in January 2008 failed to override the veto.

Public Law 110-173

Congress ultimately passed Pub.L. 110-173, which extended SCHIP funding through March 31, 2009, and the President signed it into law on December 21, 2007.

2009 reauthorization

In the wake of President Barack Obama's inauguration and the Democrats' increased majorities in both houses of Congress, legislative leaders moved quickly to break the political stalemate over SCHIP expansion. On January 14, 2009, the House passed H.R. 2 on a vote of 290-138. The bill authorized spending an added $32.8 billion to expand the health coverage program to include about 4 million more children, including coverage of legal immigrants with no waiting period for the first time. A cigarette tax increase of 62 cents—bringing the total tax on a pack of cigarettes to $1.01—an increase of tax on chewing tobacco from $0.195/lb. to $0.50/lb.—as well as tax increases on other tobacco products will fund the program's expansion. On January 29, the Senate passed the house bill by a 66-32 margin, with two amendments. The House accepted the amended version on a vote of 290 to 135, and President Obama signed the bill into law as Pub.L. 111-3 on February 4, 2009.

Arizona rescission

In early 2010, Arizona Governor Jan Brewer, along with the House and Senate of the state passed a budget that eliminated S-CHIP, known as KidsCare in Arizona. As of 22 April 2010, the state assembly, after learning they will lose federal matching and stimulus funds, is looking at restoring some of the program, but not allowing new enrollment.

 

Significant Votes 

House Votes on Health Care
YearRoll CallLegislation
2003669Medicare Part D - Final Vote
2003132Medicare Part D
20098872009-2010 Health Care Reform Bill
2009187Family Smoking Prevention and Tobacco Control Act
200916SCHIP
20101942009-2010 Health Care Reform - Amendments
2010194Health Care and Education Reconciliation Act of 2010
20101672009-2010 Health Care Reform - Reconciliation
201114Repeal of Health Care Reform
2012126Tort Reform
 

Senate Votes on Health Care
YearRoll CallLegislation
2003459Medicare Prescription Drug, Improvement, and Modernization Act of 2003
2006191Amendment - Drug Reimportation
20093962009-2010 Health Care Reform - Passage
20093532009-2010 Health Care Reform - Cloture Vote
200931SCHIP
2009207Family Smoking Prevention and Tobacco Control Act
20101052009-2010 Health Care Reform - Reconciliation
20119Repeal of Health Care Reform

 

Additional Legislation

Each year, there are numerous bills introduced that are not voted on in the House or Senate. These bills may be sponsored by numerous people and a representative's co-sponsorship of that legislation gives insight into that person's viewpoints.

Senate Bills on Health Care
SessionBill NumberCo-SponsorsBill Title
112S 444Medicare Prescription Drug Price Negotiation Act of 2011
112S 7223Small Business Paperwork Mandate Elimination Act of 2011
112S 19246Repealing the Job-Killing Health Care Law Act
112S 2621A bill to repeal the excise tax on medical device manufacturers.
112S 1711Medical Device Access and Innovation Protection Act
112S 1925American Liberty Restoration Act
112S 2025American Job Protection Act
112S 28136Save our States Act
111S 3697Preserve Access to Affordable Generics Act
111S 11507Advance Planning and Compassionate Care Act of 2009
111S 11490Annual and Lifetime Health Care Limit Elimination Act of 2009
111S 4513Medical Care Access Protection Act of 2009
111S 6778Reforming an Entitlement through Premium Adjustments based on Income Resources (REPAIR) Act of 2009
111S Res 15628A resolution expressing the sense of the Senate that reform of our Nation's health care system should include the establishment of a federally-backed insurance pool
111S 52528A bill to amend the Federal Food, Drug, and Cosmetic Act with respect to the importation of prescription drugs, and for other purposes
111S 315222A bill to repeal the Patient Protection and Affordable Care Act
111S 168121Health Insurance Industry Antitrust Enforcement Act of 2009
111S 419Comprehensive Health Reform Act of 2009
111S 350215American Liberty Restoration Act
111S 39114Healthy Americans Act
111S 350114American Job Protection Act
111S 26611Medicare Prescription Drug Gap Reduction Act of 2009
111S 6778Reforming an Entitlement through Premium Adjustments based on Income Resources (REPAIR) Act of 2009
111S 2811Save Our States Act
110S 24236Pharmaceutical Market Access and Drug Safety Act of 2007
110S 24316Medical Care Access Protection Act of 2007 or the MCAP Act
110S 283513Purchasing Insurance with Pre-Tax Dollars
110S 31610Preserve Access to Affordable Generics Act
110S 46510Advance Directives Improvement and Education Act of 2007
110S 4665Medicare End-of-Life Care Planning Act of 2007
109S 2219Medical Care Access Protection Act of 2006 or the MCAP Act
109S 235418Medicare Prescription Drug Gap Reduction Act of 2006
109S 158018Healthcare Equality and Accountability Act
109S 34714Advance Directives Improvement and Education Act of 2005
109S 44511Medicare Prescription Drug Price Reduction Act of 2005
109S 28811State High Risk Pool Funding Extension Act of 2005
109S 34714Advance Directives Improvement and Education Act of 2005
108s 25452Advance Directives Improvement and Education Act of 2004
103S 177021A bill to provide comprehensive reform of the health care system of the United States, and for other purposes.
 

House Bills on Health Care
SessionBill NumberCo-SponsorsBill Title
112H R 2184Repealing the Job-Killing Health Care Law Act
112H R 3834To rescind funds appropriated to the Health Insurance Reform Implementation Fund under the Health Care and Education Reconciliation Act of 2010
112H R 1411To repeal the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010
112H R 144195Small Business Paperwork Mandate Elimination Act of 2011
112H R 15453Defund the Individual Mandate Act
112H R 19154Public Option Deficit Reduction Act
112H R 3466Health Care Choice Act of 2011
112H R 36913Health Savings and Affordability Act of 2011
112H R 586Tort Reform - HEALTH Act
111H R 5141180Small Business Paperwork Mandate Elimination Act
111H R 1256177Family Smoking Prevention and Tobacco Control Act
111H Res 1188150Ensuring an up or down vote on certain health care legislation
111H R 5808127To amend the Patient Protection and Affordable Care Act to establish a public health insurance option
111H R 5111126To amend the Patient Protection and Affordable Care Act to modify special rules relating to coverage of abortion services under such Act.
111H R 4972106To repeal the Patient Protection and Affordable Care Act
111H R 475283Medicare Prescription Drug Price Negotiation Act of 2010
111H R 478981Medicare You Can Buy Into Act
111H R 462675Health Insurance Industry Fair Competition Act
111H R 470066Transparency in All Health Care Pricing Act of 2010
111H R 490359To repeal the Patient Protection and Affordable Care Act
111H R 588253Defunding the Patient Protection and Affordable Care Act
111H Res 61553Congressman and the Public Option
111H R 309052Health Equity and Accountability Act of 2009
111H R 490445Defunding the Health Care Mandate
111H R 245SCHIP Reauthorization
111H R 499943Reclaiming Individual Liberty Act
111H Con res 7814Expressing the support of the Congress regarding the need to facilitate State innovation in national health care reform.
110H R 1343248Health Care Safety Net Act of 2008
110H R 4196Medicare Prescription Drug Price Negotiation Act of 2007
110H R 3014111Health Equity and Accountability Act of 2007
110H R 67693United States National Health Insurance Act
110H R 323450HSA Improvement and Expansion Act of 2007
110H R 50679Health Partnership Through Creative Federalism Act
109H R 574315HSA Improvement and Expansion Act of 2006
109H R 55595Independent Health Record Bank Act of 2006
109H R 415759Health Information Technology Promotion Act of 2006
109H R 2177121Healthcare Enhancement for Local Public Safety Retirees Act of 2005 or the HELPS Retirees Act of 2005
109H R 213318Health Security for All Americans Act
10710330States' Right To Innovate in Health Care Act of 2001