We are pleased to see that the Committee adopted, on voice vote, Rep. DeGette's proposal on presumptive eligibility for children. This is a valuable component of outreach for children. Allowing selected sites and providers to determine children to be presumptively eligible for Medicaid for one month, until their application can be completed and reviewed, is an important step to reaching the 3 million children who are currently eligible for Medicaid but are not enrolled. Presumptive eligibility cuts through some of the difficulties parents face in obtaining health insurance for their children through Medicaid. We were also pleased to see the Committee adopt Rep. Strickland's amendment on exempting special needs children from mandatory enrollment in managed care. While the exemption is included in the Medicaid title, it protects all children with special needs. This exemption is particularly important because managed care systems have not been tested for their ability to serve those with chronic and disabling conditions. However, while we have bipartisan agreement on those two items, we have a number of concerns with the approach taken to target the 5 million low-income children who are currently uninsured. We would have preferred to see another approach. In fact, the Democrats offered two alternatives. We were particularly disappointed that the Republicans did not adhere to the budget agreement that specifically said that the $16 billion for children's health must be spent on programs that provide health insurance coverage for low-income children. Under the Committee proposal as it now stands, States are not required to provide health insurance coverage for children. They could choose to do this, but there is no requirement in clear violation of the agreement between the Republican leadership and the Administration.

On this matter, we are particularly concerned with a large loophole that says that children's health money can be spent on "direct provision of services." Our experience with the the disproportionate share hospital program (DSH) tells us that sometimes the funds that Congress turns over to the states do not always reach the intended beneficiaries. Congress did not intend for DSH moneys to fund state psychiatric hospitals, or roads, or prisons, but in some states that is exactly what happened. With the direct provision of services clause in the current bill, States could use all of their block grant money to buy drugs for sick children, or pay for psychiatric care in a state mental hospital, or pay for residential substance abuse treatment services for children in the juvenile justice system. These individuals who are receiving services through these programs and institutions are certainly worthy of federal support. But, we already have a number of federal programs that purchase direct services for children in this manner.

In fact, the block grant proposal, coupled with the large disproportionate share hospital cuts, provides incentives for states not to use their money to cover children but to invest it in particular services. The states could target this children's health money directly to the facilities that will be losing DSH money through the cuts in the budget package.

The Commerce Committee Minority believes that there are options available to make sure that we are getting what we are intending to pay for: health insurance coverage for children. We believe that we put forth two solid proposals that would direct the funds for this purpose expressly: the Dingell-Brown proposal, and the Democratic Caucus proposal offered by Mr. Pallone.

The Dingell-Brown Child Health Insurance Provides Security Act, H.R. 1491, builds on the Medicaid program to expand health insurance coverage to children up to 150% of poverty. Three important points about this proposal should be kept in mind as the package moves towards conference.

First, the Dingell-Brown bill builds on an existing program that insures 22 million children and has succeeded at getting children access to medically necessary services. The beauty of this approach is in its simplicity. There is no need to create another complicated program layer with eligibility standards and benefits that differ from the current Medicaid program. This can only create confusion for states and beneficiaries alike, and could reduce access to care and services for children.

More importantly however, are the second two points; the Dingell-Brown approach targets children who most need help, and the Dingell-Brown approach would provide children with a comprehensive package of medically necessary benefits. The Dingell-Brown bill would reach children in families at or below 150% of poverty more than 75% of whom do not have private health insurance coverage.

Also, the Medicaid program provides a comprehensive package of medically necessary services for children, something the Committee-posed bill does not offer. Given that the money we have to spend is limited, to best reach our goal of covering 5 million currently uninsured children, the $16 billion must be targeted to the children who have the greatest need -- those in families at or below 150% of poverty. We also believe that it is important to provide these children with true health insurance coverage, not "direct provision of services."

The Pallone approach contains a number of components that could help provide health insurance to children. First, it builds on the Medicaid program and adds the Medikids' grant program, similar to the Hatch-Kennedy proposal requiring states provide to benefits for children comparable to the Medicaid benefits package. This approach requires maintenance of effort, but gives states the flexibility: grant money could purchase private insurance, for example, but not the direct provision of services. This approach also contains private insurance reforms advocated by Rep. Furse which would make kids-only health insurance policies more accessible, especially for children in families with parents who were between jobs.

Either of these approaches would be preferable to the Committee bill.

Another issue of special concern is the majority's proposal to allow states to cap the number of children they enroll through the Medicaid program. All children who fall within a given eligibility category should be allowed to receive benefits. Limiting the entitlement for Medicaid, even if it is only for a small population, is a dangerous precedent. The Commerce Minority would like to see this corrected.

A final issue in the area of children's health concerns is that money designated to restoring Medicaid eligibility for disabled children losing SSI because the new, stricter definition of childhood eligibility was not included in the package. The proposal was removed in favor of a block grant for certain, selected states to help with the unreimbursed cost of emergency services for immigrants. In a bill that was designed to increase health insurance coverage for up to 5 million children, we are taking away health insurance for 20,000 poor or near-poor disabled children.

We look forward to continuing to work in a bipartisan manner on the remaining outstanding issues that we have highlighted here.

John D. Dingell
Sherrod Brown
Diana DeGette
Bobby L. Rush
Rick Boucher
Thomas J. Manton
Gene Green
Tom Sawyer
Anna G. Eshoo
Elizabeth Furse
Frank Pallone, Jr.
Peter Deutsch
Ron Klink
Edward J. Markey
Bart Gordon
Henry A. Waxman
Edolphus Towns
Ted Strickland
Karen McCarthy
Bart Stupak

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