Bush ready to veto children’s healthcare bill

For years it has been one of the few issues that liberals and conservatives in Congress could agree on -- continuing and expanding a state-federal partnership to provide health insurance for kids, mainly the children of the working poor.

So when senators of both parties reached a compromise this summer and then beat back efforts by House Democrats to triple the program’s budget, its many Republican backers thought they had a political victory that President Bush could embrace.

Instead, the issue has become an ideological flash point and Bush is threatening to cast what may become the year’s most controversial veto. In the process, he could create new intraparty turmoil for fellow Republicans who have looked to passage of the bill to brighten an otherwise grim political outlook.

The question will come to the floor of Congress this week, days before the old program is set to expire Sept. 30. At that point, 6 million children -- including about 800,000 in California -- could lose coverage.

One snag is cost. Even the final compromise, far less open-handed than the House wanted, calls for more money. And the White House is trying to draw a tighter line on domestic spending.

The bigger stumbling block has turned out to be ideological. After 10 years of sailing along as a feel-good idea that just about everyone supported, the children’s medical insurance program has been drawn into the contentious debate about healthcare in general.

Bush has attacked the compromise bill because it would expand coverage to some middle-class families instead of retaining the plan’s original focus on those with low incomes. The bill could lay the groundwork for government-run national healthcare, he has said.

In his Saturday radio address, the president said Democrats were at fault: “Instead of working with my administration to enact this funding increase for children’s health, Democrats in Congress have decided to pass a bill they know will be vetoed.”

In effect, the White House says, Democrats see the bill as a way to begin doing for children what Medicare does for the elderly: make healthcare a national entitlement.

Democrats and Republicans supporting the expansion -- including Gov. Arnold Schwarzenegger -- answer that their concern is with economic reality. With the average cost of family coverage about $12,000 a year, some parents with middle-class incomes can’t afford it if their employers don’t help shoulder the cost. And when uninsured children get seriously ill, supporters say, the burden falls on society as a whole.

Known nationally as the State Children’s Health Insurance Program -- in California as Healthy Families -- the plan started as an attempt to salvage something positive from the rancorous collapse of the 1990s national healthcare reform debate. States got generous federal matching funds and flexibility to design their own coverage.

At first, the program was aimed at uninsured children whose parents earned too much to qualify for coverage under Medicaid but too little to afford private coverage. The goal was to reach families earning up to twice the federal poverty level, now about $41,000 for a family of four. The vast majority of children covered by the program are still in that category.

However, as healthcare costs soared, states began to grapple with knowing that many families -- especially in urban areas where the cost of living is higher than average -- had trouble paying for private insurance even though they earned more than twice the poverty level.

Fourteen states now have higher eligibility cutoffs. The pending bill would allow states to go to three times the poverty level, about $60,000 for a family of four.

Conservative Sen. Orrin G. Hatch (R-Utah), one of the creators of the original program, said that was well short of providing what the White House said it feared: government-financed healthcare for the middle class.

He joined forces with liberal senators such as Edward M. Kennedy (D-Mass.) and John D. “Jay” Rockefeller (D-W.Va.) to push the compromise.

“The administration [is] making it clear they do not want it to be morphed into one-size-fits-all government healthcare, but to be honest with you, this bill doesn’t do that,” Hatch said. “I believe the president has had bad advice on this, but I understand the president’s desire to keep spending under control.”

Health economist Len Nichols of the nonpartisan New America Foundation said he thought a lot of Republicans were “perplexed by the White House stand on this issue.”

Funding for the program has cost about $5 billion a year. Bush wants to increase it by an average of $1 billion a year over the next five years. Independent analysts say that’s not enough to sustain the current caseload.

Congress wants to add $35 billion over five years by raising tobacco taxes. That would sustain the current caseload and cover 3 million to 4 million more children. About 9 million are currently uninsured nationwide.

Bush wants to set a limit, discouraging states from covering uninsured children in families with incomes exceeding $50,000. The administration recently denied a request by New York to extend help to families earning as much as $80,000.

At his news conference Thursday, Bush said of the bill in Congress: “Their proposal would result in taking a program meant to help poor children and turning it into one that covers children in households with incomes of up to $83,000 a year. . . . The proposal would move millions of American children who now have private health insurance into government-run healthcare.”

But Hatch told reporters Friday that the congressional plan did no such thing, and would actually discourage states from providing help to families with incomes that high. “It is true that some of the most expensive states have wanted that to be the case, but it is not true [about] our bill,” he said. “That was one of the mistakes in the press conference.”

The final language of the bill will not be available until Monday. A summary released Friday said the plan would allow states to expand coverage to uninsured children in families earning up to about $60,000 for a family of four.

Schwarzenegger is among those governors advocating coverage up to that income level.

“They are definitely dug in” at the White House, said Mark McClellan, a former administration official who, as Medicare administrator, oversaw the children’s program.

“My hope would be that after the veto fight, there is a broad effort to find a solution.”

“I think, in the end, the White House would probably agree to significantly more money,” he said. “The battle is over the best way to provide coverage for families at higher income levels.”

One possible compromise would be to subsidize private coverage, on a sliding scale, for uninsured children in some middle-class families, he said.

Congress would face an uphill struggle to overturn a presidential veto of the bill, Hatch said, and would probably pass a temporary extension of the current program.

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ricardo.alonso-zaldivar @latimes.com