Deadlock on child healthcare persists

The failure by House lawmakers to break a stalemate over children’s healthcare legislation Thursday marked another partisan standoff between Congress and the White House and underscored how difficult it will be in the years ahead to reform the larger insurance system, even though it is a top national priority.

Insuring children was considered the easiest part of the healthcare challenge because children are cheaper to cover and public support for such coverage is high.

But the debate bogged down on two key issues in the broader effort to cover the 47 million people uninsured in the U.S.: costs and the role of government in helping middle-class families, not just the poor.

President Bush this month vetoed a measure to expand a popular program designed to insure children of the working poor. As expected, Thursday’s attempt to override his veto failed. The 273-156 House vote was 13 short of the two-thirds majority needed. Despite a two-week campaign by proponents, only 44 Republicans voted to override, one fewer than had originally supported the bill.

The White House and some leading backers of the legislation immediately urged negotiations on a compromise to extend the children’s program, which serves about 6 million youths. But, after a House debate that turned acrimonious, it remained unclear whether they would find common ground.

“The fact that this is stalled . . . speaks to how hard it really is to move forward,” said Marian Mulkey, a senior policy analyst with the California HealthCare Foundation. “I am not ready to write off the federal conversation about kids, nor the broader conversation, but neither am I sanguine about the prospects.”

The impasse in Washington has repercussions for California and other states that administer the State Children’s Health Insurance Program, as the federal-state partnership is called. It was originally designed to cover children in families who earned too much to qualify for Medicaid but too little to afford private insurance.

California’s program, known as Healthy Families, insures about 800,000 children, more than in any other state. Its director, Lesley Cummings, said she was drafting contingency plans to put children on waiting lists or even to drop some from coverage if federal funding is jeopardized.

“We call this ‘doing the bad and ugly drill,’ ” Cummings said of her planning. “All of us are fretting.”

Funding for the program was set to expire Sept. 30, but Congress and Bush extended it through mid-November to try to resolve their differences.

If Washington policymakers remain deadlocked and continue to extend the current funding levels through next year, California would face a shortfall and would not be able to cover all the children it currently serves. Because of rising healthcare costs and cutbacks in employer coverage, several states find themselves in a similar predicament.

It’s also uncertain whether states will be able to use the program as part of their own efforts to expand coverage, as Republican Gov. Arnold Schwarzenegger had planned to do in California.

Democrats said they were disappointed with Thursday’s vote and vowed to use the issue as a political weapon against Republicans in the 2008 election.

“I think [this] is a major point of contention in the next election, because it is hard to justify tax cuts to wealthy Americans, . . . a war that our president . . . refuses to pay for, and not being able to find the money to extend health insurance to the children of the middle class and working families,” said Sen. Hillary Rodham Clinton of New York, the Democratic presidential front-runner in polls. “It doesn’t add up morally, it doesn’t add up economically, and it doesn’t add up politically.”

White House spokeswoman Dana Perino said Bush was pleased with the outcome and wants to compromise with Congress.

“As it is clear that this legislation lacks sufficient support to become law, now is the time for Congress to stop playing politics and to join the president in finding common ground,” she said in a statement.

Bush has designated Health and Human Services Secretary Mike Leavitt, White House Budget Director Jim Nussle and economic advisor Allan B. Hubbard to negotiate with Congress.

Leavitt said the president wants to prevent any disruptions in coverage. But the two sides seem far apart.

The congressional bill, a compromise between Democrats and leading Senate Republicans, called for spending $60 billion over five years to cover about 10 million children. The legislation would have allowed states to extend coverage to uninsured children in middle-class families making up to about $62,000 for a family of four -- three times the federal poverty level -- but discouraged expansions above that income range.

To finance the expanded coverage, the congressional bill would have sharply raised tobacco taxes. Groups as varied as the insurance industry lobby and the liberal MoveOn.org supported the legislation.

By comparison, Bush has proposed to spend $30 billion over five years, a 20% increase over current funding. Independent analysts say that would not be enough to sustain the existing enrollment.

The president is willing to spend more money, Leavitt said, but wants the program to focus on enrolling children in families making less than about $41,000 a year, or about twice the federal poverty level. Bush would not support a tax increase to expand coverage for kids, he added.

But Leavitt said the program could expand without subsidizing middle-class families because about 500,000 to 800,000 children are currently eligible but not enrolled.

House Speaker Nancy Pelosi (D-San Francisco) said the legislation must provide coverage for 10 million children.

Some independent observers saw at least some basis for a compromise. “If the White House moves up on the money, and the Democrats move down on the eligibility . . . that would allow the vast majority of states to go where they want to,” said Drew Altman, president of the Kaiser Family Foundation, a nonpartisan research group. “I can readily envision how a deal could be made -- if they are in a mood to make one.”

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ricardo.alonso-zaldivar @latimes.com

Times staff writer Tina Marie Macias contributed to this report.