Senators have defeated a substitute amendment offered by Minority Leader Mitch McConnell (R-KY) to the Children’s Health Insurance Program Reauthorization Act (S. 275) by a vote of 32 to 65. The amendment would have inserted the Republican “Kids First Act” alternative SCHIP reauthorization bill in place of the one currently being debated.
The Kids First Act would close loopholes in the SCHIP program that allow coverage for families with higher income levels (as high as $80,000 a year in some states) than that of 200% above the federal poverty level. It would also work to end the practice in some states of extending coverage to adults. The SCHIP program was created to cover families who make too much money for Medicaid but not enough to purchase private insurance.
Republicans believe their proposal would expand SCHIP coverage to around 2 million new low-income children. Their plan would also be paid for without raising taxes by using, among other things, the diverted funds from closed loopholes.
One other key motivation behind the Republican alternative is to prevent a “crowd-out” effect where a government program might encourage individuals to drop their existing private insurance coverage. The idea is that such a switch would take away from additional low-income children being covered under SCHIP.
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