Veto Vote Has Interest Here

October 15, 2007
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GRAND RAPIDS — The U.S. House of Representatives has a vote scheduled this week, and the final tally could have a lasting effect on statewide health insurance coverage for the poor and for almost 3,000 county residents that receive coverage through the Kent Health Plan.

The House has a vote set for Thursday to override President Bush’s veto of HR 976, the Children’s Health Insurance Program Reauthorization Act of 2007. The chamber, which is controlled by Democrats, passed the act last month, as did the Senate, but needs roughly 20 Republicans to change their votes to overrule the president.

The Senate, also led by Democrats, has enough votes to do that.

“We are able to provide health care to 55,000 children in Michigan every month with the children’s health insurance program, but we have an opportunity to make progress covering more. Without this legislation and the resources that come along with it, many Michigan children will go without the health care they need,” said Gov. Jennifer Granholm earlier this month.

But offering coverage to 80,000 more children isn’t the only reason the state wants an override of the president’s veto. An override would also allow Michigan to continue to use funding from the State Children’s Health Insurance Program (SCHIP) to provide coverage to childless adults who have income below 35 percent of the federal poverty level, which is $298 a month, for another year. Then the state could shift coverage of these individuals to Medicaid.

Michigan received a federal waiver to use SCHIP funding for these adults because the state had money left over after all the children who qualified for SCHIP were covered under the program. Kent Health Plan received the county’s share of those dollars and has used that money to cover about 3,000 childless adults through its Plan A program, which is for residents who earn a maximum of $298 a month.

The vote’s outcome is crucial to the KHP program because HR 976 bans all future state waivers, meaning Lansing wouldn’t be able to spend SCHIP money on adults beginning in 2009. But a section in the act would let the state continue the funding waiver for 2008.

Should the president’s veto stand, a new bill would have to be written, and the waiver for 2008 might not be included in the next version.

“You are correct that SCHIP funding of childless adults is dead,” Lynda Zeller, KHP president, told the Business Journal. “There is hope for childless adults, though, in that HR 976 allows this population to be moved into Medicaid if the state seeks approval from the feds.”

Should Lansing get the Medicaid waiver to replace the SCHIP waiver, Zeller’s hope is those dollars would be funneled through county health plans just like the SCHIP dollars were, and childless adults would again be covered under Plan A.

“However, that is not a certainty either,” said Zeller of KHP receiving that money.

“The state has had our Plan A ‘frozen’ (no new clients) for a year now,” she added.

State officials have estimated that Michigan stands to lose more than $100 million a year in SCHIP funding if Congress upholds the president’s veto. Passage of HR 976 would add $35 billion over the next five years to the program.

Another reason why the state wants the veto overridden is due to the new labor contract General Motors Corp. signed with the United Auto Workers. The agreement calls for the automaker to establish a trust fund for retirees’ health insurance that the union would maintain.

But the GM contribution, estimated at $50 billion, would be counted as personal income to the company’s retirees, and a state’s per-capita personal income figure is used to calculate the share of federal Medicaid money a state gets. When personal income goes up, a state’s Medicaid share goes down.

Roughly a third of that GM contribution would be counted as personal income for Michigan, as the state has a high ratio of retirees. State officials said Michigan could lose from $400 million to $500 million in Medicaid funding each year for the next three years because the state’s per-capita income level would rise accordingly from the estimated $16.5 billion GM would contribute to the trust on behalf of Michigan retirees.

HR 976, though, contains a provision that would keep that situation from happening. If the bill has to be rewritten, though, that provision may not be in the new version.

KHP, which was organized by late Blue Cross Blue Shield executive Chuck Zech in 2001, provides services to about 6,000 uninsured residents through a trio of programs. But that enrollment figure represents only 15 percent of the 40,000 county residents who earn less than 150 percent of the federal poverty level, which is $15,000 for an individual and $31,000 for a family of four.

“We really need these folks to be covered by Medicaid,” said Zeller. “I think most people would be shocked that a person with no children, who is not disabled or blind, who earns less than $300 a month, would not get any ambulatory health benefits at all. This could be our new reality.”

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