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Proposed changes in Medicare, kids' care and funding ensure a fight in Congress.
Published Jul. 30, 2007

Sweeping health care legislation that would affect benefits for millions of children and senior citizens - as well as the bank accounts of doctors and insurance companies - comes up for floor votes this week in Congress.

Starting today in the Senate, with the House expected to follow later in the week, lawmakers will consider separate proposals to renew a popular federal-state program that provides health insurance for about 6-million children, mainly from low-income working families.

A bipartisan effort in the Senate has led to a compromise that would expand coverage of the State Children's Health Insurance Plan to about 3-million more children. But in the House, top Democrats are pushing a far more ambitious bill that also would make major changes to Medicare, the health care program for older and disabled Americans.

"It is going to be a high-profile battle," said Robert Greenstein, executive director of the Center on Budget and Policy Priorities, a liberal group that advocates for the poor. "Particularly when you consider the House bill, this is the biggest piece of health legislation since the 2003 bill that created the Medicare drug benefit."

Republicans are calling the Democrats' action a step toward "socialized medicine," and the Bush administration has vowed to veto both bills. The outcome will influence the course of the presidential election debate over how to cover the estimated 45-million Americans who are uninsured. About 9-million of those are children.

The children's program must be reauthorized by Sept. 30 or it will expire.

The House legislation would cover about 2-million more children than the Senate bill. But it would also improve preventive care for Medicare recipients, provide more financial help to low-income seniors in the Medicare prescription plan, and reverse a 10 percent cut, scheduled for next year, in Medicare fees to doctors.

Both bills call for stiff increases in tobacco taxes to pay for expanded coverage for children. But since the House version helps not only more children, but seniors and doctors as well, it costs tens of billions of dollars more than the Senate's.

To pay for the added benefits, House Democrats want to cut payments to private insurers in Medicare's managed-care program. Nonpartisan congressional analysts say those payments are 12 percent too high when compared with the cost of covering seniors in the traditional Medicare program.

But many Republicans - even those willing to confront the administration over expanding coverage for children - are strong supporters of the Medicare managed-care program.

"What (the House) is going to do has no chance of being done in the Senate," said Sen. Gordon Smith of Oregon, one of a core group of Republicans backing the Senate plan.

The children's program badly needs a new infusion of funds, and a health care policy standoff in Washington could jeopardize coverage for millions of families across the country. The National Governors Association quietly is encouraging approval of something close to the Senate plan.

"If Congress fails to agree on a common bill, the Democratic leadership will get blamed, and the story will be 'Democrats can't get things done,' " said Robert Blendon, professor of health policy and political analysis at the Harvard School of Public Health. "If it fails because of a presidential veto, then the Democrats can run saying, 'The president stopped the expansion of coverage for children.' Almost every poll shows the public strongly supports the principle of covering more children."

The brewing clash has brought out some of Washington's most influential lobbying groups. Backing the House bill are the American Medical Association, AARP and many grass roots liberal organizations.

America's Health Insurance Plans - the industry trade group - is trying to derail the House bill, citing estimates that 3-million out of more than 8-million seniors now in Medicare managed-care plans would be dropped if the cuts go through. (They would return to traditional Medicare.)

And tobacco companies and antitax conservatives are trying to sink both bills.

Supporters of the House bill say they're ready for a fight.

"This is a package that helps kids, helps seniors and helps doctors, and is opposed by the tobacco and insurance industries," said John Rother, group executive officer of policy and strategy for AARP. "Which side do you think the public is going to line up with?"