The Senate Finance Committee mark-up of the SCHIP reauthorization bill features a compromise increase of $35 billion for five years. The Bush administration requested a $5 billion increase, and the Finance Committee chairman Max Baucus (D-MT) had proposed a $50 billion increase in March. In its barest outlines, the bill recalls the initial SCHIP (State Children’s Health Insurance Program) legislation — a compromise crafted by senators on both sides of the political aisle and partially funded through tobacco tax increases.

A decade ago, raising cigarette taxes by 39 cents per package was the 1997 compromise that broke the logjam of how to fund SCHIP without breaking the balanced budget agreements. In 2007 the preliminary compromise is to increase cigarette taxes by 61 cents per pack to find the funding offsets for the five years of SCHIP. One might be tempted to say, well peel away all the noise and ideological drumbeats, and you’ll find “history repeats itself,” the Yogi Berra explanation of “déjà vu all over again,” or “just follow the money.”

However, one should probably look at the struggle over the SCHIP reauthorization as a cautionary tale. Reauthorization of SCHIP, which expires September 30, 2007, was initially thought to be uncontroversial. Various (former) members of the Bush administration intimately involved with SCHIP and health care, such as Mark McClellan (former Centers for Medicare and Medicaid Services administrator) and Tommy Thompson (former Secretary of Health and Human Services) were both supportive. While there has been grumbling by the states about the particular details of the funding allotments, SCHIP is a very popular program with governors of both parties. It has broad bipartisan and multigenerational support from such groups as the American Academy of Pediatrics, AARP, the Business Roundtable, and PhRMA–hardly card-carrying members of the socialized medicine brigades.

SCHIP also is a notably successful program — a program that has managed to navigate the difficult shoals of federalism, as it has steered between state and federal requirements while serving its constituency. Children are cheap to cover and devastatingly effective symbols in political campaigns (as anyone old enough to remember the ads against Barry Goldwater in 1964 would recall).  Despite all the positives, and the relatively low cost, the SCHIP reauthorization is embroiled in deep controversy and faces a presidential veto.

One of the differences between 1997 and 2007 is where the ideological cannon fire is coming from.  Many liberal advocates for children initially viewed SCHIP with some suspicion precisely because it was a hybrid federal-state program funded as a block grant, rather than as an entitlement like Medicaid. They were concerned that children would not be receiving adequate benefits and care.

In 2007, the advocates for continuing this format that gave the states greater flexibility in designing coverage and extending it to other populations have been labeled by the Bush administration, including HHS Secretary Michael Leavitt in a recent op-ed, and several Republican senators, as spearheading socialized and government-run medicine.

This year’s reauthorization debate has also featured one of the more bizarre tales of who has the right numbers in counting the potential SCHIP- and Medicaid-eligible uninsured American children. HHS released a fact sheet on June 18 indicating that 700,000-800,000 children are SCHIP-eligible in any given year, somehow losing millions of other children that all previous estimates [free access article] had found. SCHIP estimates discussed in more detail in a recent Health Affairs article [2-week free access].

The SCHIP reauthorization battle reminds us that health care reform is never easy.  Indeed, regarding U.S. health reform, Jonathan Oberlander asked in a thoughtful essay: “Why Do Bad Things Happen to Good Plans?” [free access article].

The SCHIP debate might be an unwelcome omen for the advocates of far-reaching reforms who hope for a window of opportunity in 2009 and for proponents of state reform efforts in Massachusetts, California, and elsewhere. State reform efforts are all dependent on relatively generous SCHIP funding. When reauthorization of a program such as SCHIP, which has broad support, struggles to make it through Congress, more far-reaching reform proposals potentially face much greater hurdles.

Advocates for children might want to take a leaf from the administration’s education policy. Education funding and benchmarks had traditionally been a local responsibility. This administration, however, has imposed federal guidelines and benchmarks under the slogan of “No Child Left Behind.” Child health advocates might want to think about aligning themselves with the education community and signing on to the slogan.

Health Affairs will be publishing online several articles about SCHIP later this month and into August. Stay tuned.