Clash emerging over child healthcare plan

Shopkeeper Wei Vongsavanh was reeling after his health insurance premium hit $1,800 a month for his two young boys, both diagnosed with autism. The bill “came to the point I could not handle it anymore,” said the father, an immigrant from Laos who owns a small Bay Area business that sells model airplanes.

Then he discovered a joint federal-state program that helps insure the children of low-income workers. Vongsavanh’s total monthly costs are now less than $100, thanks to what in California is called the Healthy Families program.

That program -- known elsewhere in the country as the State Children’s Health Insurance Program, or S-CHIP -- is about to become the first battleground in the effort by newly empowered congressional Democrats to force Washington to take on healthcare.

And even though Democrats across the country have put covering the uninsured high on their priority list, the confrontation over the children’s program is likely to pit Democrats against Democrats.

Legal authority for that program will expire this year. Failing to renew would leave as many as 6 million children without coverage -- most of them in low-income working families that make too much to qualify for Medicaid but too little to afford health insurance. Nine million children are currently uninsured.

‘An emotional issue’

Liberal Democrats say they want to use the coming renewal debate to establish a right to healthcare coverage for all children, much as Gov. Arnold Schwarzenegger has proposed in California.

But fiscally conservative Democrats who helped the party take control of Congress are aghast at the price tag of such an entitlement, which some experts say could top $80 billion over five years. They say they want to strengthen the current program but are not ready to take the leap to cover all children.

“I think it will be an emotional issue,” said Rep. Jim Cooper of Tennessee, a healthcare policy expert and member of the Blue Dog caucus of moderate and conservative Democrats. “I think it will be a difficult issue in terms of the budget, perhaps the most difficult of the year, because it’s a very large amount of money.

“But I think we need to be clear-eyed and mindful that taxpayers are reluctant to see their taxes move up, unless they know the money is going to be well spent.”

Many liberals are adamant that money should not be the focus of the debate.

“This is a wonderful opportunity to finish the job for all children,” said Children’s Defense Fund President Marian Wright Edelman, a longtime political ally of Sen. Hillary Rodham Clinton (D-N.Y.), a potential presidential contender for 2008.

“It’s an enormous opportunity not only for the Congress, but for the Democrats,” Edelman added. “We don’t know what to do in Iraq, and we wish we could bring peace to the Middle East, but covering American children is something we can achieve. It’s a basic step toward health insurance for everybody, and this is a chance to have it in our country.”

Under a budget rule passed by House Democrats, any spending increases must be offset by cuts or taxes. That makes it almost impossible for Congress to sidestep the cost issue.

‘The next big step’

The children’s insurance program was created in 1997 as a bipartisan compromise that emerged from the wreckage of President Clinton’s national healthcare bill. In contrast to her public role spearheading the overhaul effort, then-First Lady Clinton worked mainly behind the scenes to help get the children’s bill passed.

Sen. Clinton’s office said she was not available for an interview.

She has long supported covering all children, but it’s unclear how hard she will push for that this year.

“Many people who are interested in broadening coverage see this as the train to ride for the next big step on health reform,” said Drew E. Altman, president of the Kaiser Family Foundation, an information clearinghouse on the healthcare system. “But the desire to go beyond the renewal of the law is going to run straight into the desire to balance the budget.”

Covering children is a popular effort partly because it costs less than insuring adults -- about $1,500 a year for a child, $1,900 for a grown-up. Many children in the program are also enrolled in cost-conscious managed care plans.

The debate over the program’s future will begin in earnest after President Bush releases his budget early next month. Democratic Senate leaders have said they want to vote on a bill before summer. But lawmakers face a program in fiscal peril.

Unlike traditional benefit programs that are known as entitlements, the funding for S-CHIP is not open-ended.

Instead, the program is financed with a $5-billion annual allocation.

However, that amount is not enough to keep pace with the increasing cost of healthcare.

If Congress merely maintains the current $5-billion-a-year commitment, 1.5 million children or more could lose coverage by 2012, according to government estimates.

Closing the gap could take an additional $13 billion to $15 billion over the five-year period.

It seems likely that Bush will propose in his budget to close the funding gap, although he may want to pay for it with other healthcare program cuts unacceptable to Democrats.

“I don’t see Congress failing to provide full funding for the program’s current obligations,” said former Medicare Administrator Mark B. McClellan, a health economist. “This has proven to be a very popular program with strong bipartisan support, and a very cost-effective way to cover kids.”

Beyond that, prospects are uncertain.

“I think at the end of the day we are going to try to reduce the number of uninsured children significantly,” said a House Democratic leadership aide. “Whether we will try to drive it to zero is not clear.” The aide spoke on condition of anonymity because he was not authorized to present party policy.

Most states offer coverage through S-CHIP to children in families with incomes below twice the federal poverty level. (The poverty level is about $20,000 a year for a family of four.) Edelman, of the Children’s Defense Fund, would like to see the threshold raised to three times the poverty level. Some advocates would also like the program to provide coverage for parents.

Such expansions may be premature.

That’s because many children eligible for the program based on their family finances are not enrolled. Of the nation’s estimated 9 million uninsured children, 2.2 million qualify for coverage through S-CHIP, and 4 million more are eligible for Medicaid. S-CHIP is open only to legal residents of the United States.

“Most of the discussion is along the lines of what can we do better to cover the kids who would be eligible for this program right now,” said a House Democratic committee staffer, who asked not to be identified because no final decisions had been made.

Reaching out to uninsured

An outreach effort to enroll more eligible children -- or some kind of government mandate that parents come forward to sign them up -- could cost billions of dollars more.

Vongsavanh, the Bay Area merchant who enrolled his two sons, believes many parents simply don’t know about the program.

“Publicity about this service is not widely spread,” he said. “We attend many family meetings of parents with autistic children, and they are not aware, and neither are the doctors.”

His sons, Alan, 3, and Obert, 2, are receiving speech therapy, occupational therapy and other medical services.

Premiums are $14 a month to cover both boys, and there is a $5 co-pay for office visits.

“If they keep Healthy Families alive, we can just go on with our lives,” Vongsavanh said. “Without this service, my children would go on Medi-Cal, and we would just have to rely more on the government.”

ricardo.alonso-zaldivar@ latimes.com

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(BEGIN TEXT OF INFOBOX)

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Youth coverage

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Health insurance coverage for people younger than 19:

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Private insurance: 62%

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Government programs*:26%

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Uninsured: 12%

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*Medicaid and State Children’s Health Insurance Program

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Source: Center for Children and Families, Georgetown University Health Policy Institute