Congress Daily: Health

By Fawn Johnson

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House Republicans and Democrats are preparing competing healthcare proposals that might be unveiled as early as next week, leading up to what could be a massive floor battle over health policy in September, lawmakers and aides said Thursday.

"I do believe that the debate on [the State Children's Health Insurance Program] is going to evolve into a debate on a much broader approach to health care and healthcare reform," said Rep. Phil English, R-Pa., who is involved in the talks about a Republican "alternate" bill to a Democratic SCHIP expansion plan.

"This is an issue where Republicans are going to have to compete with the Democrats to offer an alternative vision, not just on pay-fors, but also on the substance," English said.

The Republican bill emerging from the Ways and Means Committee will seek to use the tax code to encourage individuals to buy private health insurance, although details are still being negotiated, committee aides said. The idea is to cover more people for less money, one aide said.

Democrats plan to begin their efforts in the Energy and Commerce Committee with a $50 billion SCHIP expansion designed to cover 6 million low-income uninsured children, said Rep. Diana DeGette, D-Colo., who is writing the Democrats' bill with Energy and Commerce Chairman Dingell, Health Subcommittee Chairman Frank Pallone, D-N.J., and Ways and Means Democrats.

DeGette has been tapped by Majority Whip Clyburn to vet the proposal with the Democratic Caucus.

She said she is focusing on rural Democrats and the minority caucuses who worry about trimming Medicare Advantage extra payments to pay for the SCHIP expansion. "Seventy-five percent of minority seniors are not enrolled in Medicare Advantage," she said. "They're paying higher premiums to subsidize the 20 percent who are enrolled."

Ways and Means Democrats will follow on the heels of the Energy and Commerce Committee's markup with their part of healthcare legislation that will include several changes to Medicare.

The Ways and Means piece of the bill will include adjustments to physician reimbursements under Medicare, staving off a 10 percent cut scheduled for next year. DeGette said the proposal also will include automatic inflation adjustments to Medicare physicians' fees in hopes of avoiding future fee fixes.

The Ways and Means package also will include other Medicare changes that would ease enrollment for seniors, including changes to an asset test for low-income subsidies, according to Democratic aides.

The combined SCHIP/Medicare bill from the Democrats will likely cost more than $100 billion over five years, and will be paid for in part by a cigarette tax increase, cuts to Medicare Advantage, and some provider cuts, according to aides and lobbyists familiar with the talks.

Democrats hope their healthcare proposal will attract bipartisan support in the House, but GOP aides said their alternative bill is designed to unify Republicans against the Democrats' proposal.

"This could be the largest expansion of government-provided health care since Medicare was started," said one GOP aide. "We have to get an alternative and we have to come together on a bill."

Republicans are hoping that a presidential veto threat to an SCHIP expansion will give them leverage as SCHIP is being negotiated in both chambers.

The White House and GOP leaders are particularly frustrated that the Democratic SCHIP proposals include health coverage for some adults.

The Senate Finance Committee's SCHIP bill will include a phase-out of adult coverage to address Republicans' concerns, but the House bill will include some adult coverage, including eligibility for pregnant women.

DeGette said she is "mystified" at the administration's decision to oppose an SCHIP expansion, particularly because it has repeatedly extended state SCHIP waivers that allow adult coverage.

Finance ranking member Charles Grassley, R-Iowa, along with Sens. Pat Roberts, R-Kan., and Orrin Hatch, R-Utah, also called attention to the administration's apparent inconsistency on adult coverage under SCHIP on Wednesday, when they sent a letter to HHS Secretary Leavitt asking him to stop extending such waivers.

Grassley and Hatch object to Bush's veto threat, but they might be in the minority among Republicans who see the SCHIP bill as an opportunity to demonstrate the major policy differences between Republicans and Democrats on health care.

DeGette said the Republican effort is misguided. "The Republican leadership and the White House don't want us to have a win, but SCHIP was supported by a majority of Republicans when it was first enacted," she said. "If the president wants a legacy, he could have a legacy of extending health care, getting 6 million kids into qualified health care."