Senate OKs a wider child health program

Defying President Bush, the Senate on Thursday voted decisively to expand a popular health insurance program for children of the working poor and to more than double tobacco taxes to pay for it.

Senators of both parties banded together in the 68-31 vote for the State Children’s Health Insurance Program -- 18 Republicans joined all 48 of the chamber’s Democrats who voted and both of its independents. That’s one vote more than the 67 needed to override Bush’s threatened veto.

Under the Senate plan, smokers would foot the bill for covering 3 million children more than the 6 million already covered: The federal cigarette tax would jump from 39 cents a pack to $1, and the tax would reach $10 for luxury cigars with a wholesale price of $19 or more apiece.

The Senate action followed a House vote Wednesday approving an ambitious package that would cover about 5 million more children but would also make changes to Medicare that many Republicans say are unacceptable, such as cutting payments to managed-care plans. Lawmakers will face a challenge reconciling the bills.

“It’s going to be difficult,” said Sen. Max Baucus (D-Mont.), an author of his chamber’s bill. “But we’re talking about kids, and that’s the dynamic that holds us together.”

If congressional negotiators can strike a bipartisan deal, some senior Republicans suggest, the White House may have to back down on its veto threat.

“I hope to be able to talk to the president and just show how common sense dictates not vetoing this,” said Sen. Charles E. Grassley (R-Iowa), who worked with Baucus to craft the bill.

Sen. Orrin Hatch (R-Utah), who helped create the insurance program in 1997, said: “In the final analysis, I don’t think this president will veto this bill.”

But the administration has shown no signs of relenting, saying both versions are too expensive and would expand benefits to middle-class families.

Some Democrats say they would welcome a veto battle.

“If the president actually decides to use his veto -- which he has so sparingly used -- to deny health insurance to American children, that is a fight that we should have,” said Sen. Barack Obama (D-Ill.), a presidential candidate.

SCHIP, as the program is known, wasn’t always a source of political strife. A Republican Congress and a Democratic White House created it 10 years ago as a federal-state partnership. In California, where it is known as Healthy Families, the program insures more than 800,000 children.

Before the program was created, about 23% of children in the United States had no health insurance. That has dropped to about 16%. An estimated 8 million to 9 million children remain uninsured. Experts say that most are eligible for federal programs but that some parents don’t know such help is available and others do not want to apply because of the stigma related to receiving government benefits.

The future of the children’s program is uncertain. Its legal authority will expire Sept. 30 unless Congress and Bush act.

The outcome of the debate is crucial for states that are planning to expand health insurance coverage. In California, Gov. Arnold Schwarzenegger and Democrats in the Legislature are counting on federal money for their plans to cover all children in the state.

Washington now allocates $5 billion a year for the program, which states supplement with their own funds. The Senate bill would add $35 billion in federal money over five years, for a total of $60 billion for that period. Bush says he is committed to extending the program; the administration has offered $5 billion more over five years.

As the cost of health insurance has risen, states say, current funding levels are not enough to meet the need. Indeed, California officials say, their program faces a shortfall next year, and if nothing is done, more than 200,000 children may eventually lose coverage in the state.

But Bush and GOP critics of the program say SCHIP has lost its focus on covering children whose parents make too little to afford private insurance but too much to qualify for Medicaid.

Originally, it was intended to cover children in families making up to twice the federal poverty level, or about $40,000 for a family of four. But more than a dozen states cover children above that level, and some cover adults. In California, Schwarzenegger wants to cover children in families making up to three times the poverty level, or about $60,000 for a family of four.

“The problem here is we are exploding the program,” said Sen. Trent Lott (R-Miss.). “The ultimate goal is for all children to be covered by ‘Mother Washington.’ ”

Supporters of the program counter that it was the Bush administration that approved many of the exemptions expanding coverage for middle-class families -- partly because the cost of living in some states is high.

Even so, more than 90% of those getting benefits from the program are children in families earning less than twice the poverty level. And the Senate bill would begin to reduce the number of adults covered by the program.

Such arguments have not persuaded the administration.

“This bill essentially extends a welfare benefit to middle-class households,” said a White House statement on the legislation.

Hatch took strong exception to the use of the word “welfare.”

“These aren’t people on welfare,” he said. “These are children of working-poor parents who are trying to work but don’t have the money to get health insurance. It’s hardly welfare.”

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ricardo.alonso-zaldivar@ latimes.com