The Fight Over SCHIP Tells Us This Budget Season is Going To Be One Big Food Fight--Medicare Payments to HMOs and Physicians Are in the Middle of It

Now that the House has failed to overturn President Bush's veto of the SCHIP bill by just 13 votes, Democrats are looking to tweak the $35 billion expansion of SCHIP just enough to get the extra Republican votes they need to get their bill passed.

The House Democratic leadership is now in discussions with Republican House members who voted with their President last week and who might be persuaded to change sides in the next round. The focus of these discussions is on capping the enrollment for families between 200% and 300% of the federal poverty level and clarifying the bill's language so that there is no doubt that SCHIP is closed to undocumented immigrants.

While House Republicans and the President have said they are interested in a compromise they continue to argue that no one should be covered above 200% of the poverty level. That does not represent any movement from their original position.

Neither side appears to be interested in any good faith movement toward the middle. Democrats are more than happy to just keep sticking this issue to Bush and the Republicans on the eve of an election-year. The President and his allies, encouraged about polls that show support for limiting coverage closer to 200% of poverty, appear happy to continue hammering away with their newfound fiscal discipline.

Beyond SCHIP, this tells us the rest of the budget process is really going to be ugly. President Bush has already said that he intends to veto every one of the 12 domestic appropriations bills the Congress is working on because they exceed his spending limits. The President originally asked for a total of $933 billion in the 12 bills for fiscal year 2008. The Democrats are in the process of giving him $22 billion more than that. Bush says that this level of spending would ultimately balloon to $205 billion more than he asked for over five years.

We could relive the SCHIP veto fight 12 more times this fall!

Caught up in this will be a number of key health care issues including the automatic January 1, 2008 9.9% Medicare physician fee cut, proposed cuts to Medicare Advantage HMO payments to fund the Medicare physician fee fix, and Medicare payments to hospitals, nursing homes, durable medical equipment vendors, and other providers.

As I have said before, the 10% Medicare physician fee cut will not take place and the debate over payments to Medicare Advantage plans will be right in the middle of that solution. The year-end omnibus budget bill will be the vehicle that likely deals with this. That bill is one that is almost completely controlled by the Democratic committee chairs--no real Republican input, no need to get 60-votes in the Senate. The President can also veto this one but the final budget bill is usually loaded up with things the White House will want very badly.

It will be a fascinating fall.

When the day is done, Democrats may have to be happy to just get by in 2008. This could well be the last budget George Bush has anything to do with. The Democrats are looking forward to a new President in the White House in January of 2009 and ready to sign a 2009 budget. They are confident she will see things their way--especially on health care.