18 Oct 2007 SCHIP-Expansion Backers Oppose Choice; Democratic Leadership SCHIP Bill Blocks Insurance Options for the Frost Family

Washington, D.C. – As the U.S. House of Representatives votes today in what the Democratic leadership hopes will be a successful override of President Bush’s veto of its SCHIP expansion bill, The National Center for Public Policy Research wants to know: What does the Democratic leadership have against choice?

“Buried in the leadership’s SCHIP expansion bill is a provision restricting the choices of SCHIP recipients,” said Amy Ridenour, president of The National Center for Public Policy Research.  “Through a part of SCHIP called ‘premium assistance,’ SCHIP helps recipients pay for health insurance coverage offered by their employers — but under the Democrat bill, it won’t do so if the employer’s plan includes either flexible spending accounts or medical savings accounts.  If it does, if the Democrats get their way, SCHIP won’t subsidize the insurance.”

A flexible spending account allows employees to set aside pre-tax dollars to pay for routine medical or other qualified expenses while a low cost catastrophic health insurance policy is purchased to cover large medical bills.  A medical savings account allows employers and/or employees to make contributions into a tax-free fund (much like an IRA), which the employee uses to pay for routine medical expenses, while a low-cost catastrophic health insurance policy protects the employee from large medical bills.

“Section 301(a)(1)(ii) of the Democratic leadership’s bill specifically forbids SCHIP recipients from participating in employer-sponsored plans that include FSAs and MSAs,” said Ridenour, “even when such plans, often the lowest-cost way for families to obtain catastrophic health insurance, are in the best interests of the family.”

“If the Democratic version of SCHIP were to pass, Graeme Frost’s family would be ineligible to purchase an employer’s insurance through SCHIP, should it be available and contain either FSAs or HSAs,” said Ridenour.  “Nancy Pelosi claims conservatives who wonder about the Frost family’s eligibility for SCHIP are conducting a ‘vicious attack’ on the family.  Yet she’s pushing policies that would limit the family’s health insurance choices.  Which is worse?”

The Frosts are an SCHIP recipient family in Baltimore whose 12-year-old son, Graeme, delivered the Democratic Party’s response to President Bush’s September 29 radio address.  The legislation is H.R. 976, the Children’s Health Insurance Program Reauthorization Act of 2007.

The National Center for Public Policy Research sponsors a website on SCHIP located at http://www.schip-info.org.

The National Center for Public Policy Research, founded in 1982, is a non-partisan, non-profit educational foundation based in Washington, D.C.