This vote was on an amendment by Wayne Allard, R-Colo., that would require states to use a family’s gross income when determining eligibility for the State Children’s Health Insurance Program (SCHIP).  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.
Allard said current law allows states to set an upper income eligibility level for SCHIP at 200 percent of the federal poverty level, or 50 percentage points above that state’s Medicaid income level.  But Allard that in practice, some states – between 12 and 15 – allow income far above those thresholds by not counting, for example, income benefits from other aid programs.

“By disregarding specific types of incomes, States can ignore earnings between 200 percent of Federal poverty level and their upper limit, as if that income did not even exist. States should not be disregarding large portions of income to avoid SCHIP eligibility levels,” Allard said.  “My amendment brings the language back to the original intent of SCHIP. My amendment would require that a family’s gross income be used to determine eligibility for SCHIP, and that the Secretary of Health and Human Services would determine new regulations for eligibility for SCHIP by establishing what is referred to as “gross income” and having that defined at a certain level.

He said SCHIP was never intended to cover every uninsured child in America, but rather the very neediest of them.  Allard said states could still cover, and be reimbursed for, a child who was ineligible for SCHIP based on changes made by his amendment, but at a reduced federal rate of reimbursement.

Max Baucus, D-Mont., said DeMint’s amendment would tie states’ hands too much.  He said that states need the flexibility to design their own programs to fit their populace’s unique needs.

“Many States find themselves in a situation where a law might restrict them. If the States did not have flexibility, many people who earn a little too much might find they cannot get health insurance, and so they quit their jobs. The goal is to get people to work. People want to work. The goal is to make sure people have health insurance. People need health insurance. But in many States, people are just above the level here, and if they can’t find health insurance, they quit their jobs so they can be in the Children’s Health Insurance Program,” Baucus said.

By a vote of 37-59, the Senate rejected Allard’s amendment.  All Democrats present voted against the amendment.  Most Republicans voted for the amendment, with the exception of 10.  The end result is that the bill went forward without language that would have required states to use a family’s gross income when determining eligibility for SCHIP.