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Controversial US insurance plan moves forward

The US Senate Finance Committee approves a controversial plan to renew and expand the Children's Health Insurance Programme

The Senate Finance Committee has approved a controversial plan to renew and expand the Children's Health Insurance Programme, which provides coverage to children whose families fall into the gap between Medicaid eligibility and the ability to afford private insurance.

The bipartisan legislation was drafted by Senators Max Baucus (Democrat for Montana), Chuck Grassley (Republican for Iowa), Jay Rockefeller (Democrat for West Virginia.) and Senator Orrin Hatch (Republican for Utah).

Called the Children's Health Insurance Programme Reauthorisation Act, the proposal would maintain coverage for the 6.6m children currently insured through CHIP as well as expand the programme to cover another 3.2m children over the next five years. The Committee passed the Act by a 17-4 margin, with six of the 10 Republicans on the panel voting in favour, despite the fact that President Bush is strongly against the proposed legislation.

The legislation calls for USD 35bn in additional funding over five years. Current baseline funding is USD 25bn.

The plan that was approved by the Committee is a modified version of a proposal unveiled in mid-July. The new version includes USD 200m in grants for states to put toward dental coverage for poor children, as well as a requirement designed to ensure that states provide adequate mental health coverage.

Many experts believe that strengthening CHIP could be a key to solving the country's health insurance crisis, but some complain that the current proposal does not go far enough. "Although this is a good start, (the proposed USD 35bn) is well short of the budget resolution's USD 50bn, and it will still leave millions of children uninsured," Ron Pollack, executive director of the advocacy group Families USA, said in a statement.

Even more controversy has been generated by the fact that the plan would fund the maintenance and expansion of CHIP through a new tax on tobacco. President Bush objects to the tax, as well as to the "big government" approach that he says is at the heart of the plan. He has threatened to veto the legislation if it lands on his desk.

"I believe government cannot provide affordable health care. I believe it would causeÖthe quality of care to diminish," the President said during remarks at an event in Maryland just after the Committee's vote. "I believe there would be lines and rationing over time; I'm not willing to listen to (plans for) a massive expansion of the federal role in providing health care for individuals across the country."

Instead, Bush has offered a proposal that would create a USD 15,000 deductible for families and a USD 7,500 deductible for individuals and would also make it more affordable for small businesses to provide health insurance for their workers.

The full Senate is expected to take up the Children's Health Insurance Programme Reauthorisation Act before the end of the month.

26th July 2007


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