This vote was on an amendment by Judd Gregg, R-N.H., that would limit the amount of coverage states can provide to childless adults under the State Children’s Health Insurance Program (SCHIP).  Specifically, Gregg’s amendment would stipulate that states could continue covering adults with the same level of benefits as is available under Medicaid, but not at higher rates.  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.

“The problem is very simple. States are gaming the system. They are using the SCHIP program, which gives a higher reimbursement rate, to bring into the system adults, and then they take that money and basically use it in their general fund. This is not appropriate. It is not appropriate, first, to have adults funded under a children’s health insurance program. Secondly, it is not appropriate to give States the ability to game the system in this manner,” Gregg said.

Max Baucus, D-Mont., agreed that SCHIP coverage for adults has gone too far, but said that cutting adults off “cold turkey” is inappropriate. 

“Rather, childless adults would be cut back and zeroed out after 2 years, but then parents are phased down. But CBO has said when you do not cover parents, then you are also not covering some kids. The goal is to cover kids. I think the legislation is a fair, good, solid way to restrict coverage of adults, and I urge my colleagues, do not support this amendment, which is too draconian and goes too far,” Baucus said.

Chuck Grassley, R-Iowa, said the problem that Gregg’s amendment – covering adults under a health insurance program intended for children – is real.  However, Grassley said Gregg’s amendment is too extreme and that the underlying bill takes steps to curb that problem by eliminating coverage for childless adults by 2009.

By a vote of 42-53, the Senate rejected Gregg’s amendment.  All but four Democrats present voted against the amendment (Kent Conrad and Byron Dorgan of North Dakota, Claire McCaskill of Missouri, and Ben Nelson of Nebraska).  Of Republicans voting, all but nine voted for the amendment.  The end result is that the measure went forward without language that would have severely curtailed the amount of health care coverage states can offer to adults under the SCHIP program.