Smith Watch - Nebraska's 3rd District: Smith Misleads Constituents to Defend his Ongoing Oppositon to SCHIP

The State Children’s Health Insurance Reauthorization Act of 2007, or SCHIP, has continued to be at the top of the news. A new bill, taking the ideas of the first that fell to Bush’s veto and making changes to address any concerns by those opposed, has started through Congress. In the House, the bill passed, but as before, not with enough votes to override another threatened veto.

Third District Representative Adrian Smith has voted against this vital piece of legislation from the very beginning. In defense of his vote, he recently penned another of his columns ("Children's Health Insurance") stating the reasons why he voted against it. Unfortunately, in “setting the record straight”, he chose to once again mislead, and shall I say, lie to his constituents.

Let’s look at his statements, and just note that all sources will be indicated by a number this time, and listed at the end of the article (it‘s easier that way with so many this time):

To be clear: I support SCHIP. I support the idea behind it. I doubt if there is one member of Congress who would say he or she opposes the idea of poor children having access to quality health care.

His votes and the rest of this article clearly show otherwise. Just saying it doesn’t make it so.

However, I don't support paying for the program through funds raised by taxing cigarettes; or taking 2 million children off the private insurance rolls and moving them into government run health insurance; or making it possible for illegal immigrants to receive federal benefits.

I’ll address the first two reasons, but as for the third, regarding illegal immigrants, to suggest that this bill allows that is a lie.

Sec. 605 of H.R. 3963 is very clear:

SEC. 605. NO FEDERAL FUNDING FOR ILLEGAL ALIENS; DISALLOWANCE FOR UNAUTHORIZED EXPENDITURES.

Nothing in this Act allows Federal payment for individuals who are not legal residents. Titles XI, XIX, and XXI of the Social Security Act provide for the disallowance of Federal financial participation for erroneous expenditures under Medicaid and under CHIP, respectively.

Maybe Smith can explain what part of that says that illegals will get benefits.

A lot has been said about this bill. I want to set the record straight.

Actually, it will be me setting the record straight since Smith decided not to be up front and honest with his constituents.

According to the nonpartisan Congressional Budget Office, under H.R. 3963, two million individuals would opt out of private health insurance plans in order to receive government-run health care. I do not support government creating a program to directly compete against the private sector.

Yes, let’s take a closer look at the CBO’s Estimate of Changes in SCHIP and Medicaid Enrollment of Children. (1)

From 2008-2012, the 5 years the bill would cover, they ESTIMATE the following:

- 600,000 children would be removed from Medicaid and placed on SCHIP.
- Of the children currently uninsured, 2 million would receive SCHIP coverage, and 1.9 Million would become eligible for Medicaid.
- Of children currently insured, 1.5 Million would become eligible for SCHIP and 500,000 would become eligible for Medicaid.

By using the term “opt-out”, Smith is assuming that these children that are presently insured would have parents that all make the choice to take them off their existing insurance. What he’s failing to acknowledge is the fact that more and more families are losing their insurance every year, and that would account for some of those enrollments. Many of those children would become eligible NOT because of a “choice” by parents, but rather because the family either lost their insurance, or could no longer afford it. This could happen because of an employer no longer providing coverage, losing a job and getting a job where no insurance is provided, or becoming unable to pay the premiums for private insurance (which for a family of 4 could be well over $1200 per month).

As these 3 graphs show, uninsured children under 18 are the only ones who’s numbers have been dropping in recent years, starting with the introduction of SCHIP in Fiscal Year 1998. The number of employers providing health coverage has dropped dramatically, and the number of uninsured overall has been rising.

Sec. 116 of H.R. 3963 specifically addresses “Preventing Substitution of CHIP Coverage for private coverage.” (2) It allows for ongoing monitoring and adjusting of the best methodology possible to make sure the low-income children come first.

So, while some people could very well make a “choice” to “opt-out”, the VAST majority that will receive coverage under SCHIP will be people who can’t afford insurance for themselves or their children.

And there are even more facts regarding this issue that have to be considered. According to Factcheck.org (3):

The Congressional Budget Office director said he hasn't seen another policy proposal that would reach as great a level of the uninsured with as low of an effect on those who had private insurance.

Health care and government experts, including CBO Director Peter R. Orszag and MIT economics professor Jonathan Gruber, have said that when the government offers programs that target the uninsured, those programs will inevitably be used by some who already have or could have private insurance. Experts call this effect "crowd-out."

The House bill would extend coverage to a total of 7.5 million people, 5 million of whom are uninsured, while the Senate bill would reach 6.1 million, 4 million of whom are uninsured, according to CBO reports. The rest of those affected by the expansions would have private or other coverage. Those numbers give crowd-out rates of 32 percent for the House bill and 34 percent for Senate's. Orszag said of the House crowd-out effect, "given the scale of the net reduction in the uninsured, it’s pretty much as good as you’re going to get. In other words, I have not seen any other proposals to reduce the number of uninsured children by 5 million with crowd-out rates that are lower than 33 percent. Again, in the absence of a mandate on an employer, or a mandate on an individual, or a mandate on state governments, CBO does not believe you’re going to do much better than these kinds of crowd-out rates." (Our calculations show 32 percent from the CBO charts, which include numbers rounded to one decimal point.)

Orszag made those remarks at an Aug. 29 conference by The Alliance for Health Reform, where he also said that the bills included measures to minimize the crowd-out effect and that the Senate bill gave states incentives to target lower-income families. Gruber, who worked on the initial development of SCHIP, wrote in a letter to Rep. John Dingell, chairman of the energy and commerce committee, that "no public policy can perfectly target the uninsured," but that expansions like SCHIP are the most cost-effective ways of increasing health coverage.

Gruber: I have undertaken a number of analyses to compare the public sector costs of public sector expansions such as SCHIP to alternatives such as tax credits. I find that the public sector provides much more insurance coverage at a much lower cost under SCHIP than these alternatives. Tax subsidies mostly operate to "buy out the base" of insured without providing much new coverage.

As for SCHIP’s current crowd-out rate, a May 2007 CBO report said that estimates vary but that the figure is “most probably” between 25 percent and 50 percent.

The president says movement of people from private to public insurance under these bills is unacceptable, which is a matter of opinion. We feel this additional information is necessary to give a full picture of the bills' effects.

Finally for Smith to say that he’s against a program that would “compete against the private sector” again shows how out of touch he is. Why? Because if there are working families that can’t afford private insurance in the first place, how is there any competition? If SCHIP didn’t exist, there would only be one choice for these families: No insurance at all for their children. Adrian Smith doesn’t seem to realize that is a reality for too many in this country and competition has nothing to do with it. Even Gruber testified that trying a tax credit wouldn’t provide near the coverage that SCHIP is able to do.

Rather than requiring we first serve poor children before the program can be expanded, the bill contains an "income disregard loophole," allowing states to define "family income" as they see fit. As a result, under this bill, a family of five in New Jersey making $84,455 per year would still be eligible for SCHIP, even though its income exceeds 300 percent of federal poverty levels.

This is false. Now here are the facts.

Sec. 114 specifically notes that no child can be covered in a family that makes over 300% above the poverty level. (2) New York previously tried to get an exception, requested by Governor Eliot Spitzer, for coverage up to 400% of the poverty level, or $82,600. This request was denied by President Bush. (3)

The legislation currently being offered does allow for an exception for states that have “an approved State plan amendment or waiver”. But this waiver must be approved and Bush will retain the right to continue denying those requests.

Factcheck.org explains it better (3):

The new legislation would rescind the Aug. 17 letter from HHS that required states to meet certain requirements before they could raise eligibility above 250 percent of the poverty level. Instead, HHS would issue new requirements for states seeking to increase their caps above 300 percent. After Oct. 1, 2010, states failing to meet those requirements wouldn’t get federal funds for children above that 300 percent mark (see Sec. 116 of the bill).

Also, states that meet the requirements and extend eligibility above 300 percent of the poverty level would get a reduced federal matching rate for children in families above that 300 percent threshold. States that already have a higher cap (only New Jersey) and those that were about to put one in place (only New York) would be exempt from that federal match restriction. So, New York could increase its income eligibility cap to $82,600 for a family of four for at least two years, until late 2010, as long as the state’s plan is approved by HHS. After that, to continue getting funds for children above the 300 percent level, the state would have to meet the federal government’s new guidelines.

The fact is that right now, under current law, the only state that covers over 300% is New Jersey, which is set at 350%. They would have to drop that now to the level in the bill, unless they got approval from HHS. States set their own levels, and presently, only 9 States, and the District of Columbia, cover at the 300% level or above (with NJ being at 350%). Another 9 states cover under 200% of the poverty level (Nebraska being one of them at 185%). The remaining 33 states cover children at 200-275% of the poverty level. (3)

Another thing. Adrian Smith keeps stressing this covers “poor children”. That’s also misleading. The “poor” children are already covered by Medicaid, while SCHIP covers the “low-income” children.

Again, according to Factcheck.org:

The stated intent of Congress when it established the program in 1997 was to expand coverage beyond those who were poor to "uninsured low-income" children. And in Washington-speak, there's a significant difference between "poor" and "low-income."

Congress didn't specify exactly what it meant by "low-income" in the bill that became law or the conference report that accompanied it on final passage, and reasonable people can certainly come up with different definitions. However, if one defines "low" as meaning "lower than most families make," then there is plenty of room to expand the current SCHIP program without violating the original aim stated by Congress in 1997.

The fact is, it is more likely than not that this bill would never cover families making $84,000. If it got approved, it would only be in 2 states: New York and New Jersey.

The 2006 Deficit Reduction Act requires proof of citizenship to receive Medicaid benefits - including driver's licenses, passports, and U.S. birth certificates. This SCHIP bill substantially weakens these documentation requirements by allowing states to verify citizenship through the presentation of an easily falsified or stolen Social Security number.

Adrian Smith takes the extreme on this, but fails to explain what the issue really is.

While the bill allows for verification of the Social Security number, name and date of birth with the Social Security Administration in lieu of documents, this does not create an “easy” way for falsification. If there are any inconsistencies, the application will not be approved until verification can be obtained.

Why did they do this? Because the process was actually causing problems for people who were eligible.

According to a letter from the CBO to Nancy Pelosi (4), they report that:

Under current law, individuals who apply for Medicaid and claim to be U.S. citizens are required to provide certain documents (such as a passport or birth certificate, and, in certain circumstances, a driver's license or other documentation that establishes identity) to demonstrate that they are citizens. That provision was enacted in the Deficit Reduction Act of 2005 (DRA, Public Law 109-171), and has been effective since July 1, 2006. (Before the DRA provision took effect, those individuals were permitted to attest to their citizenship, under penalty of perjury.)

Section 211 would allow states the option to either use the requirements created in the DRA for citizenship documentation under Medicaid or instead verify an individual’s name and Social Security number with the Social Security Administration. Some states have reported a drop in enrollment since implementation of the DRA because some Medicaid applicants have had difficulty satisfying the documentation requirement. Available evidence, based on state reports and other information provided by state officials, suggests that virtually all of those who have been unable to provide the required documentation are U.S. citizens.

So Smith would rather risk the vast majority of eligible children being denied coverage just to avoid a small number of ineligible children getting into the program.

Even the Social Security Administration (SSA) admits a social security number does not prove citizenship eligibility, stating "the name/Social Security Number verification process only indicates whether this information matches SSA's records" and "would not provide for verification of citizenship."

Yet this has been the same process employers have been asked to use to verify if someone they are hiring is legally eligible to work in this country. Apparently, for Smith, that’s good enough for the employers, but not good enough for children in need. But which ones deserve the most protections: Employers or Children? To put it another way - if a child that may not be eligible still gets health care and is raised healthy and happy, doesn't it benefit us all in the long run?

This bill is paid for by a 61-cent increase on cigarette taxes. This is a diminishing source of revenue as the number of smokers decreases each year. Instead, we will have to either revisit this issue - i.e. raise taxes - or we are going to need more smokers. In fact, some estimates suggest we would need more than 22 million new smokers to pay for this massive expansion.

A poll conducted in joint cooperation by NPR, the Kaiser Family Foundation and Harvard School of Public Health from October 8-13, 2007, showed that 70% of the public supported the expansion of SCHIP, including paying for it through an increase in tobacco taxes. (5)

To be quite frank, outside of the ultra-conservative, anti-tax groups, and the tobacco companies, opposition to an increase in the tobacco tax is hard to find. Why? Because cigarettes are a health hazard. If they cost more, people are less inclined to spend the money to buy them. If there is less smoking, this creates an overall health benefit, both physically and financially, to all Americans.

And that’s not just me saying that. According to a 1990 Surgeon General’s Report:

"The health benefits of higher cigarette taxes are substantial. By reducing smoking, particularly among youth and young adults, past tax increases have significantly reduced smoking-related morbidity and mortality." (6)

As for the “22 million new smokers”, this is a number thrown out by the Heritage Foundation (7), a highly partisan, ultra-conservative group who works very closely with such groups as the Club for Growth. In their article against the SCHIP bill and the revenue coming from a tax increase on the smokers, they argue that between 2010 and 2017, 22.4 Million new smokers would be needed. However, this bill covers 2008 to 2012. Their own numbers put that increase to 6.3 Million by the end of this bills authorization period. But even that can’t even be considered because they provide a very convoluted “methodology” and even then say they “projected” (rather, guessed) the rest. (8)

The CBO, however, estimated a revenue stream that is at $7.6 Billion in 2009, and drops to $7.2 Billion by 2012. They also considered that the number of smokers would drop at a predictable rate, and they are a non-biased source, unlike the Heritage Foundation. (1)

The bill also dramatically lowers the SCHIP funding in the fifth year after enactment by 84 percent, from $13.75 billion in the first six months to $1.15 billion. Again, we are simply putting off potential tax increases until the future.

Smith really needs to learn how to read legislation and understand what it actually says.

Sec. 101 of the bill is very clear on the funding amounts for each fiscal year (2). As for what he pointed out:

Fourth Year - FY2011 - $13.75 Billion
Fifth Year - FY 2012 - 2 Payments of $1.15 Billion Each (total $2.3 Billion).

And let’s look at that CBO report again, because it clearly shows that Smith's contention of a "potential tax increase" is not supported.

When you include both off and on-budget revenues that cover the projected spending on the expanded part of SCHIP, they show that in 2008 and 2009, there is an estimated SURPLUS of revenue (minus the SCHIP spending) of $3.9 and $2.9 Billion. In 2010, the revenue and spending cancel each other out. Then in 2011 and 2012, spending will outpace revenues by $2 Billion and $3.8 Billion respectively. In total, over the full 5 years of the bill, they estimate a $900 Million SURPLUS in revenues. (1) Keep in mind, Smith keeps quoting them, so he can't turn around and try and argue against these estimates.

In conclusion: SCHIP will NOT result in a need for an increase in other taxes beyond the tobacco taxes. For Smith to suggest otherwise is a lie.

According to the CBO, the legislation we most recently passed actually covers 400,000 fewer children than the original bill, even though the cost of the bill has increased from $34.9 billion to $35.4 billion. That's right - this bill actually covers fewer children even though it costs more. Only in Washington!

Again, Smith needs to learn to read the CBO reports closer, because while at first glance it says this, the final result is FAR different. This statement is very misleading, but are we surprised anymore?

On the first bill that Bush vetoed, HR 976, the CBO report did show that for expansion of SCHIP the cost would be $34.9 billion and would cover 7.8 million under SCHIP. The latest bill, per CBO, would cost $35.4 billion and cover 7.4 million children - a decrease of 400,000. (9)(10)

HOWEVER.....

This bill provides for both Medicaid eligible children, and SCHIP eligible children. As a result, the CBO estimates include both. Here is what the full estimate says (in millions):

HR 976
SCHIP Total - 7.8
Medicaid Total - 26.3
SCHIP/MED Total - 34.1

HR 3963
SCHIP Total - 7.4
Medicaid Total - 26.7
SCHIP/MED Total - 34.1

The total number covered IS THE SAME. (1)(9)

ALSO, lets look at the TOTAL spending for both bills, not just the section looking only at SCHIP:

HR 976 = $55.9 Billion
HR 3963 = $54.3 Billion

Yes, you’re seeing that right. Under the new proposed bill, the cost would be $1.6 Billion LESS than the first bill. Also, there would be an estimated 400,000 children that would be eligible for Medicaid rather than SCHIP, most likely on the borderline between Medicaid and SCHIP eligibility.

We have a number of health care challenges in our country. We have yet to pass legislation creating association health plans; we have yet to meaningfully deal with the high cost of prescription drugs; we have yet to outline a strategy to insure every family in America.

But Adrian Smith has yet to put out a bill that covers any one of these things he just listed. If he’s so concerned, what exactly is he doing about them? Waiting for one of the Republicans he follows to put out a bill he can add his name to? Where’s his leadership in the issue? Like I’ve said before, actions speak louder than words and his are hollow.

The majority party had the chance to put politics aside and work with both the minority party and the President to craft a bill all could agree with. SCHIP program was created a decade ago in a bipartisan fashion, and that is how Congress should proceed.

If Congress cannot come to the table to draft a reauthorization of SCHIP, what does that say about all we have left to do?

We need to stop jeopardizing the health care of children just to score political points.

The Majority Party has been representing the Majority of the people in this country. The Majority of people feel that children should be taken care of. They should have health care. The idea of SCHIP was very bipartisan, and it still is today. Several Republicans have taken the lead on this issue, the biggest proponent being Sen. Chuck Grassley of Iowa.

But I got a heads up about a Congress Daily AM article (sorry, no link) that shows that many on both sides of the aisle are trying to work togethe. Here are a few key highlights from the article:

SCHIP Sponsors Looking Past Bush

Senate sponsors of a children's health bill appear to be attempting an end-run around the White House in their negotiations with House GOP members.

Finance Chairman Baucus said Wednesday that the handful of House Republicans who are seeking changes to the bill have accepted a 61-cent per-pack increase in the federal tobacco tax to raise $35 billion in new money for the State Children's Health Insurance Program.

"Frankly, there's an agreement on $35 billion, covering more kids," Baucus said Wednesday after his second meeting of the day with House Republicans.

"Maybe I'm missing something here, but tobacco taxes haven't come up."

Speaking of the House Republicans who are meeting with Finance Committee members, Baucus said, "They're cognizant of the president's reason for a veto, but they also want to get something done."

The administration issued a statement Wednesday reiterating its complaints against the SCHIP bill, as well as a promise to veto the measure if it does not change.

The most recent complaint from the administration involves the 61-cent per-pack increase in the federal cigarette tax, which raises $35 billion in new money for SCHIP. Bush told Republicans Tuesday that he would veto any bill that included such a tax increase.

Finance ranking member Charles Grassley, R-Iowa, told Iowa reporters Wednesday that Bush's comments creates "a whole new ballgame" for negotiators.

"Maybe it makes negotiations impossible," he said. "I have been at this for six months and we did not discuss anything but a cigarette tax" to pay for the expansion. "The president making it a part of the debate is really a shock to me," he added.
..........

Reps. John (Randy) Kuhl, R-N.Y., Jeff Fortenberry, R-Neb., and Joseph Knollenberg, R-Mich., attended the afternoon meeting Wednesday.