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August 2, 2007

Mr. McCAIN. Mr. President, I am pleased that the Senate is debating the reauthorization of the State Children’s Health Insurance Program (SCHIP). This is a vital safety net program that offers health care coverage to one of our most vulnerable populations, low-income children. I support a timely, fiscally responsible reauthorization of this program.

The SCHIP program has served a critical purpose for many years. In 1997, Congress created SCHIP to come to the aid of the millions of children that were going without health insurance because their families were stuck between earning too much money to qualify for Medicaid and not having enough money to purchase private health care coverage. I was pleased to join many of my colleagues in supporting its establishment. Thanks to this program, low-income children have been able to count on a safety net program that can provide them with health care coverage that they might otherwise go without.


I strongly support the central purpose of SCHIP and believe that children of low-income families should have health insurance coverage. In some ways, this program has been a great success, as we have been able to drop the rate of uninsured children by nearly 25 percent from 1996 to 2005 and SCHIP covered about 6.6 million children last year. At the same time, however, I am greatly concerned that the program has expanded beyond what Congress first intended. In some cases, SCHIP coverage has been extended to middle-income children and to certain adult populations. I don’t believe that was the intention of Congress when we created this program. This has complicated SCHIP reauthorization and I believe that if we allow SCHIP to grow beyond its original purpose, SCHIP spending will grow exponentially and jeopardize its future success.

Several options have been proposed to reauthorize the SCHIP program. One, the CHIP Reauthorization Act, which was reported by the Finance Committee, would greatly expand SCHIP beyond its original framework, lead to an explosion in new spending, and reduce private health coverage in our country. The other, the Kids First Act, which I support, would keep SCHIP’s focus on providing low-income children with health insurance in a fiscally responsible manner.

I am concerned over the direction that the CHIP Reauthorization Act would take SCHIP and the precedent it would set for future authorization bills. The current SCHIP baseline is currently $25 billion, however, under the Finance Committee’s proposal, spending would explode by an additional $35 billion and will end up costing $60 billion over five years. Not only that, according to CBO, at the end of five years, in order to comply with Pay Go rules, this bill reduces the SCHIP allotment in the fifth year–2013–from $8.4 billion to $600 million. If there is anyone that seriously believes Congress will cut SCHIP funding by $8 billion in one year and cause millions who would then rely on SCHIP to lose coverage, I’ve got some beachfront property in Yuma, Arizona, that I’m willing to sell.

The CBO report also points out that if the costs of the program continue to grow according to enrollment projections, the total cost of the program over the FY 2008-2017 period would be $112 billion. Even the massive tobacco tax increase included in the bill, which would raise about $71 billion from FY2008-2017, can’t cover that cost. I’m not sure where the extra money will come from to cover the cost of the bill and it is unfair that we leave this for a future Congress to figure out how to cover our overspending. In other words, let’s put a halt to business as usual.

The CHIP bill also represents a change in the mission of SCHIP by further eroding private health coverage of children. With expanded eligibility for SCHIP, we are likely to see families that already have private coverage drop that coverage and opt for a government run, government subsidized program. CBO estimates that, among newly eligible populations covered under this bill, each additionally enrolled individual in SCHIP will be matched by one individual leaving private coverage. We will be spending billions and billions of dollars providing coverage for children who already have coverage and I believe this is a dangerous step towards government-run health care insurance.

Instead, Congress should remember the central mission of SCHIP and focus the program reauthorization on providing low-income children with health insurance coverage if they don’t otherwise have it. Several of my colleagues offered the Kids First Act as a substitute amendment to the CHIP bill. It would reauthorize SCHIP, provide an increase in funding, and avoid a costly regressive tax increase. This bill would ensure that SCHIP mission remains covering low-income children and will focus efforts on enrolling children who are already eligible for SCHIP and Medicaid but are not currently enrolled. It also recognizes that millions of children receive private health coverage and would improve current laws that allow States to offer premium assistance for coverage through private plans. Additionally, the Kids First Act also includes small business health plan reforms. Unfortunately, the Kids First Act failed after it was offered as an amendment during debate earlier this week.

At this time, I cannot support the CHIP Reauthorization Act. While I applaud the sponsors efforts to reauthorize SCHIP, I believe that bill differs drastically from the original intention of the SCHIP law and is fiscally irresponsible. I support the ideas contained in the alternative bill, the Kids First Act, which I believe would keep SCHIP focused on providing health insurance coverage to low-income children and would do so without dramatic increases in federal spending or higher taxes on Americans.

August 2007 Speeches

  • Current record