This vote was on an amendment by Tom Coburn, R-Okla., that would require states to subsidize private health care premiums for certain families.  Specifically, Coburn’s amendment would apply to families whose incomes are 200 percent above the federal poverty level, and are eligible for the State Children’s Health Insurance Program (SCHIP) but have the option of using an employer-based health care plan. 

The SCHIP program – funded primarily through taxes on tobacco products -- helps low income families with children afford health insurance, and currently covers about 6 million kids.  The amendment was offered to a bill that would reauthorize SCHIP and expand the program’s funding by about $35 billion over the life of the bill.  To offset the cost of expansion, the bill would increase the federal tax on cigarettes by 61 cents, to $1 per pack. 

Currently, a handful of states have the option of using SCHIP funds to subsidize employer premiums for low-income families.  Coburn’s amendment would specify that states could only use SCHIP funds to subsidize employer premiums for families whose incomes exceed 200 percent of the federal poverty level and who have employer-sponsored health insurance. 

Coburn suggested that there are just a few states that take advantage of this program because it is difficult for them to jump through the hoops to get the necessary waivers.  Coburn said expanding the subsidy program could encourage people not to quit their jobs in an effort to qualify for SCHIP.

“In the two States that have gotten through the very tough parameters of that assistance and have met it to meet the requirements of SCHIP, we found fewer kids go away from their parents’ insurance and stay unified in the same clinic, with the same doctors, with continuity of care,” said Coburn, who is a physician.  “This amendment says let’s not take them off. Let’s use the money for premium assistance to help those parents keep the insurance with them. In Oregon … those families who chose the premium assistance option were more likely to receive care in a doctor’s office or HMO, rather than a public health clinic or a hospital clinic. Families using the premium assistance option also reported fewer unmet primary and specialty care needs than those in traditional SCHIP. The premium assistance option works. We need to remove the difficulties and barriers so that more individuals eligible for SCHIP have the freedom to access it.”

Max Baucus, D-Mont., said Coburn’s amendment would have the effect of requiring all of the children who are newly eligible for SCHIP coverage as part of the expansion contained in the underlying bill would be forced into this subsidization program, possibly resulting in inferior coverage.

“This is not wise.  What does the amendment do? Basically it would require at least 34 States would have to redesign their successful Children’s Health Insurance Programs in ways that force children into potentially inferior coverage; that is, their health insurance coverage would be worse than under SCHIP. Why? Because sometimes private health insurance requires deductibles or limits hospital stays, may prevent insulin from being available for diabetes. It forces premium assistance. It forces people into coverage they may not want. I don’t think we want to do that,” Baucus said.

By a vote of 37-62, the Senate rejected Coburn’s amendment.  All but one Democrat present voted against the amendment (Claire McCaskill of Missouri).  Of Republicans present, 36 voted for the amendment and 13 voted against it.  The end result was that the bill went forward without language that would have required states to subsidize employer health care premiums for families whose incomes exceeded 200 percent of the poverty line and who had access to such coverage.