A CHAMP for kids --- and Medicare

JOHN LEWIS, ROBERT GREENSTEIN  

This week, the U.S. House of Representatives passed the CHAMP Act, which would provide health coverage to 5 million uninsured children and strengthen Medicare --- without adding a penny to the federal deficit. You might think such a bill would be wildly popular. In fact, it's become quite controversial.

In a recent salvo on these pages ("Health bill contains 'hidden tax increase,' " Aug. 1), former House Speaker Newt Gingrich and David Merritt said the bill would greatly expand government-run health care; take the State Children's Health Insurance Program, or SCHIP, far beyond its original purpose; hurt seniors on Medicare; and raise taxes on "every senior citizen and every American who owns health insurance."

Some of these charges are simply false. Others significantly misrepresent what's in the bill.

First, Gingrich and Merritt state that the bill represents an effort to "push the American people into Washington-controlled bureaucratic health care."

In fact, however, since SCHIP was created in 1997 --- the product of a bipartisan effort between President Bill Clinton and then-Speaker Gingrich --- states have contracted with private managed care plans to provide coverage for low-income children.

The House bill would continue to use this model. Perhaps that's why the American Medical Association and the trade group representing the drug companies, neither of which supports "Washington-controlled bureaucratic health care," have lined up solidly behind this bill.

Second, Gingrich and Merritt complain that the bill "pays off states to radically expand eligibility to cover virtually anyone," even families earning $200,000 a year or more.

In fact, of the 5 million uninsured children who would receive health coverage under the bill, 90 percent have incomes below states' current eligibility limits, according to the nonpartisan Congressional Budget Office. The typical state insures kids in families up to 200 percent of the poverty line, or around $34,300 for a family of three. Some states have income limits somewhat higher.

The charge that the bill encourages states --- which pay about a third of SCHIP costs --- to raise income limits to $200,000 a year is simply false, as any governor would attest. In fact, the bill targets its largest funding incentives on state efforts to reach the lowest-income uninsured children, primarily those below the poverty line.

Third, Gingrich and Merritt charge that the bill would harm seniors, especially low-income seniors, by imposing deep cuts in Medicare Advantage. That's the program through which Medicare beneficiaries can receive coverage through a private health plan rather than traditional Medicare.

While private insurance companies were originally brought into Medicare to save money, the federal government now pays them 12 percent more --- about $1,000 more per beneficiary per year --- than it would cost to cover these same people in regular Medicare. These overpayments not only weaken Medicare's finances, but also force the tens of millions of people in regular Medicare to pay higher monthly premiums to help cover the costs of the overpayments.

The House bill would end this waste, by paying the insurance companies the same amount as it would cost to cover that patient under regular Medicare. That, in turn, would extend the life of Medicare's trust fund by three years and significantly reduce the size of the benefit cuts (or tax increases) that ultimately will be needed to sustain Medicare over the long term. It also would mean lower monthly premiums for the nearly 1 million Georgians enrolled in regular Medicare.

Other elements of the bill would help more low-income Medicare beneficiaries pay their premiums and out-of-pocket medical costs, including their costs under the Medicare drug benefit. And the bill would improve access to preventive care and other services (such as screening for colon cancer) for all beneficiaries, by reducing or eliminating deductibles and co-payments for these services.

Finally, the bill would set up a national research center to provide patients and doctors with unbiased clinical information about which health care services and treatments are most cost-effective and work best for patients. This research holds promise for saving lives, improving health and reducing health care costs. Leading health experts and business groups have called for such a center. It would be funded by increases of about 15 cents or 20 cents per person in monthly health insurance premium costs. This is the "hidden tax increase" that Gingrich and Merritt decry.

Americans would willingly pay 15 cents or 20 cents a month to improve the quality of health care, lower costs, and help doctors and patients make better decisions.

The CHAMP Act improves health coverage for millions of America's children and seniors, and does so in a fiscally responsible way. Maybe that's why its opponents have had to resort to distortions to attack it: The facts themselves clearly show that the bill is good for this country.

U.S. Rep. John Lewis (top) is an Atlanta Democrat. Robert Greenstein is executive director of the Center on Budget and Policy Priorities, a policy institute in Washington, D.C.