UPDATE:House Passes Children's Health Expansion;Obama To Sign
February 04 2009 - 2:54PM
Dow Jones News
The House on Wednesday passed a major expansion of a government
children's health program paid for by a cigarette tax increase,
clearing the way for President Barack Obama's signature later in
the day.
The bill renews the state children's health insurance program,
or SCHIP, for four-and-a-half years and expands it to cover four
million more children. The program, which now covers about seven
million children, is set to expire March 31.
The bill is financed by an increase in tobacco taxes, including
a 61-cent-per-pack increase in cigarette taxes that would raise the
federal excise tax on a pack of cigarettes to $1.
Analysts expect the higher taxes on tobacco to reduce revenue at
the three major U.S. cigarette makers, Altria Group Inc. (MO),
Reynolds American Inc. (RAI) and Lorillard Inc. (LO).
Cigarette companies have already seen their volumes decline as
they have been forced to increase prices to offset state taxes and
their payments under a 1998 settlement agreement with states.
The SCHIP expansion would cost some $32.8 billion over five
years, according to the non-partisan Congressional Budget
Office.
The House voted 290-135 for the SCHIP expansion. The Senate
passed the same bill last week.
An expansion of SCHIP, which covers mostly children in
low-income families not covered by Medicaid, has been in Democrats'
sights for years. But President George W. Bush vetoed the program's
expansion twice.
"I can think of no higher priority than ensuring that children
get the health care they need," said Rep. Janice Schakowsky,
D-Ill.
"This represents a new direction, the beginning of the change
that America's people voted for in the last election and that we
will achieve with President Barack Obama," said House Speaker Nancy
Pelosi, D-Calif.
Obama has scheduled a signing ceremony for the bill Wednesday
afternoon.
Republicans opposing the bill protest that the measure would
allow legal immigrants to access SCHIP, eliminating a current
five-year waiting period in the law.
Some Republicans also have expressed concern that the expansion
of SCHIP would "crowd out" the private insurance market, giving
some middle-income families incentive to select a government
program over private insurers.
"Why would you take someone who has private health insurance and
move them to a government-run program?" asked Rep. Pete Sessions,
R-Texas.
Supporters of the bill argue that insured families that might
opt for SCHIP coverage have inadequate private insurance with high
deductibles and little access to ongoing care.
-By Fawn Johnson, Dow Jones Newswires; 202-862-9263;
fawn.johnson@dowjones.com