The way to pay

August 02, 2007

Efforts under way in Congress this week to renew and strengthen the program that provides medical care to children of the working poor enjoy broad support - and ending overpayments to insurance companies is a fitting way to pay for it.

Competing House and Senate proposals include enough new money to ensure that the 6 million children covered by the popular State Children's Health Insurance Program would continue to be served. As many as half the roughly 9 million children without health insurance would be covered as well.

The House plan offers the best approach to financing, however. Its five-year, $50 billion extension of the SCHIP program would be paid for by reducing subsidies to providers of private Medicare Advantage plans. Those health care plans were supposed to be cheaper and more efficient than traditional fee-for-service Medicare but turned out to be more expensive for no additional benefits.

Eliminating these overpayments would also allow for more comprehensive dental coverage under the House bill than the $35 billion Senate version of SCHIP - a need highlighted by the case of 12-year-old Deamonte Driver of Prince George's County, who died of an infection for lack of access to a dentist.

Senators, working on a bipartisan basis, chose to leave the Medicare insurance subsidies intact and rely instead on a 61-cent per pack increase in the cigarette tax. That could be called a health measure itself. It is a flat revenue source, though, that tends to fall most heavily on those least able to pay. A smaller cigarette tax increase is also included in the House bill, but it would be used to avoid a scheduled cut in Medicare payments to doctors.

President Bush, who claims to be a fan of SCHIP, gave it only an additional $5 billion in his proposed budget, which wouldn't keep up with current expenses. Now he's threatening to veto any new financing measure.

Yet the advantages to society of early and preventive care for its most vulnerable members are indisputable. Lawmakers in both chambers must reconcile their differences and be prepared to iron out a workable compromise between the two proposals before the SCHIP program expires at the end of September. The issue is critical, the need is urgent - and despite the usual procedural bickering, the opportunity for progress is unusually ripe.

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