[Congressional Record Volume 143, Number 68 (Wednesday, May 21, 1997)]
[Extensions of Remarks]
[Pages E993-E994]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        THE SCHOOL-BASED CHILDREN'S HEALTH INSURANCE ACT OF 1997

                                 ______
                                 

                        HON. FORTNEY PETE STARK

                             of california

                    in the house of representatives

                        Wednesday, May 21, 1997

  Mr. STARK. Mr. Speaker, I am pleased to introduce the School-based 
Children's Health Insurance Act of 1997.
  Health insurance equals access to health care. Access to health care 
equals better health and a better quality of life. It is that simple, 
and it should be that simple for all kids.
  I have sponsored several bills this Congress that address the need 
for health insurance for uninsured children in low-income families. 
This bill is modeled, in part, after the nationally recognized, award 
winning Florida school-based Healthy Kids Program. The bill combines 
this effective school-based approach with a sliding scale tax credit so 
that all parents of children can buy affordable health insurance 
through their own school system.
  This bill provides up to a 90-percent tax credit for low-income 
families plus an effective distribution system for actually getting 
private market health insurance products to the 10 million children 
that are not currently covered.
  Each Member of Congress was elected to make laws that make sense. 
This bill makes sense. It realistically reaches all of the 10 million 
uninsured kids in America * * * quickly and efficiently. The school-
based approach provides low cost but comprehensive health insurance for 
millions of children without new bureaucracies or hassles. Schools are 
the natural grouping mechanism to lower the cost of insurance for 
children, similar to the role large employers play in providing group 
coverage to their employees. It is more affordable and more portable 
than coverage through an employer.
  Are uninsured kids a problem in every community? Yes. According to 
the U.S. Census Bureau, fully 30 percent of all children are uninsured 
for at least a month during the year. In addition, 10 million kids 
under the age of 18--or one in seven children--are uninsured year 
round, without a single day's health coverage.
  Who are these kids that have no health insurance? Studies indicate 
that there are 10 million children that currently do not have health 
insurance for at least 1 year. That's about 14 percent of all children. 
One-third of these uninsured children have families below the poverty 
line, and another one-third have families between 100 and 200 percent 
of the poverty level. Almost 15 percent are from families above 300 
percent of the poverty line, and most parents of uninsured children are 
also uninsured, 85 percent. However, 60 percent of uninsured children 
have at least one parent working full time. In addition, almost 50 
percent of these family heads work for small firms with fewer than 25 
employees.

  A month or a year without health insurance is long enough to suffer 
serious harm for a child. According to the 1987 National Medical 
Expenditure Survey, the most recent comprehensive national survey of 
health care expenditures, and use, uninsured children are almost twice 
as likely not to be seen for health problems that expert physicians say 
should ``always or virtually always come to medical attention.'' For 
example, according to this survey, more than half of uninsured children 
with asthma never saw the doctor during the year of the survey. One in 
three uninsured children with recurring ear infections likewise will 
never see the doctor. Many of these asthmatic children are hospitalized 
with problems that could have been prevented. Many children with 
untreated, recurring ear infections suffer permanent hearing loss.
  With the recent attack on welfare, the number of uninsured children 
may get disastrously worse . . . fast. Adding fuel to this fire, a 
recent report published by the American Hospital Association indicates 
that the number of individuals without health insurance will increase 
to nearly 46 million by the year 2002. This projected growth is 
attributed to a decline in the level of employer-provided health 
insurance.
  Can the school-based concept work to insure more children? Yes. This 
bill is modeled after the Florida Healthy Kids Corporation, a school 
enrollment-based insurance program that currently provides broad 
coverage to thousands of previously uninsured children. It was recently 
named a winner of the 1996 Innovations in American Government Award by 
both the Ford Foundation and the John F. Kennedy School of Government 
at Harvard University. In presenting the award, considered to be among 
the Nation's most prestigious public prizes, the president of the Ford 
Foundation, Susan V. Berresford, characterized Florida Healthy Kids as 
``one example of effective government producing extraordinary results. 
They are helping to restore faith in government's ability to solve 
tough problems.''
  The concept for the Florida program is simple. Most American children 
attend school. School systems can be used as a mechanism for creating 
large groups of people to cover participants the way large businesses 
do. Coverage is offered to families with children enrolled or residing 
in the school district and benefits are designed for the individual 
child. This is identical to employment-based insurance, except the 
school children become, in effect, employees qualifying themselves for 
coverage. A group composed of school children is large enough to 
provide an insurance benefit and premium package that is a good fit for 
families. Since premiums can still be beyond the reach of some lower 
income families, the coverage is subsidized on a sliding scale based on 
income.

  In Florida, the school district plays a significant and varied role 
that schools, nationwide, could follow. The district serves as the 
center of community focus, fostering relationships between the school 
programs, local community leaders, and area business groups. It 
distributes enrollment materials and verifies student eligibility, 
contributing significantly to administrative efficiencies. School 
staff, especially school nurses and teachers, help identify and put the 
program in touch with potential participants. Mailing labels have been 
provided by schools to assist with marketing efforts. Schools have also 
allowed the use of dial-up systems which automatically call a student's 
family with a prerecorded health care message.
  Is quality health care for children too expensive? No. When the 
Florida program evaluated the predicted frequency with which children 
utilize the offered benefits, they found that those services which 
typically drive up the

[[Page E994]]

cost of employer-based plans were not frequently used by school-age 
children. By including these benefits, the program has enabled families 
to gain a greater peace of mind with little effect on the program 
costs. Other state programs have attempted to control claims costs by 
reducing coverage for preexisting conditions, inpatient, mental health, 
and transplant services or by raising copayments or deductibles. The 
Florida program has found that these additional health benefits can be 
included with little impact on the premium when a thoughtful package 
with reasonable, affordable copayments is crafted. In fact, with 5 
years of use pattern supporting data, the Florida program has been able 
to negotiate three premium reductions.
  Florida has found that children with insurance are more likely to 
have a health care home and therefore receive care before an illness 
becomes serious, reducing overall health care costs by one fourth. 
Preventive care is crucial to the overall well-being and development of 
a child. Recent studies have shown that for every $1 spent on 
immunizations such as measles, mumps, and rubella, $21 is saved in 
health care and related costs.
  A child's health has a direct impact on their performance in school. 
Children who attend school while sick are not mentally or physically 
prepared to meet the challenges of learning. This becomes much worse 
for a child who cannot afford to see a doctor and suffers through a 
disease until it gets better on its own, or until an illness becomes 
too serious for home-based treatments. This results in less 
productivity in the classroom and more days absent from school for the 
child. In fact, the average school-age child misses 4 days of school a 
year due to illness. And uninsured children are 25 percent more likely 
to miss school than those who have insurance.
  Independent studies of the Florida program have shown that the 
program is not only beneficial to the children, but to the community as 
well. Florida hospitals report a 30-percent drop in pediatric charity 
care. Emergency room visits have been shown to decline by 70 percent. 
Program savings like this have saved Florida $13,125,000 in health care 
costs in just one year.
  The first pilot project for Florida Healthy Kids was launched with 
the assistance of a demonstration grant authorized by Congress in 1989 
and administered by the Health Care Financing Administration [HCFA]. 
This crucial experiment may never have moved from the drawing board 
without Federal interest and assistance. This bill would recognize the 
full potential that was originally hoped for by Congress for this 
tremendously successful program.
  It's just that simple.
  I welcome cosponsors for the bill, and comments and suggestions from 
the public on ways to improve the bill.
  The following is a summary of the bill:

          School-Based Children's Health Insurance Act of 1997


                                Summary

                I. School-based Health Insurance Program

       A qualified school-based program is operated by a local or 
     state public school system or any public or private non 
     profit organization operating a private school. Qualified 
     school-based health insurance coverage is coverage that: Is 
     offered by a qualified school-based program; is available to 
     all children under 19 years of age; provides a comprehensive 
     benefit package; has at least a $1,000,000 lifetime benefit; 
     has no cost-sharing for covered preventive care; does not 
     impose any pre-existing condition exclusions; charges 
     premiums that are consistent with the premium section of this 
     bill; and does not discriminate against any individual.
       A program will not be eligible as a qualified program if 
     there is established a pattern of abuse or misrepresentation 
     of this insurance
       Medicaid-eligible children do not qualify for this 
     insurance since they are already covered

                          II. Benefit Package

       The benefit package is comprehensive and includes well-baby 
     and well-child care, immunizations, physicians services, 
     laboratory tests, inpatient and outpatient hospital costs, 
     emergency services and transportation, prescription drugs, 
     eye exams and eyeglasses, hearing exams and hearing aids, 
     basic dental care, physical therapy, mental health services 
     and pre-natal care and delivery.
       If the parent objects to any of these services based on 
     religious or moral conviction, they will not be provided. A 
     religious organization operating a school-based program will 
     not be required to provide any of these services if it is 
     opposed by their religious beliefs.

                            III. Tax Credit

       Each taxpayer who purchases a school-based health insurance 
     policy for their dependent receives a tax credit for an 
     amount up to 90% of the premium to buy health insurance for a 
     qualifying dependent.
       The credit is available to taxpayers based on a computation 
     of adjusted gross income plus an additional $5,000 amount for 
     each child covered.
       There is a full tax credit provided at the adjusted gross 
     income of up to $15,000 plus $5,000 per child covered by the 
     health insurance policy. The ``$15,000'' figure represents 
     approximately 200 percent of poverty for an individual under 
     the age of 65.
       For example, a family with adjusted gross income of $25,000 
     and two qualifying children would receive a refundable tax 
     credit of up to 90% of the family's cost for coverage of the 
     two children.
       As a family's income rises and the need for a subsidy is 
     less critical, the credit phases out.
       The credit is available only to subsidize qualified school-
     based coverage for children.
       Establishment of premiums: the program will provide a 
     minimum contribution of 20% to the premium before a fully 
     subsidized child's premium is calculated. The subsidy amount 
     phases out to 10% on a sliding scale for partially subsidized 
     children.

                          IV. Other Provisions

       There is coordination with other tax provisions subsidizing 
     health costs to disallow the credit in instances where the 
     taxpayer also claims a medical expense for the same premium 
     cost or claims a deduction for health insurance costs of 
     self-employed individuals.
       Grants to states for school-based health insurance outreach 
     and information programs would be established.
       An employer may not discriminate against employees eligible 
     for this health insurance subsidy. The employer may not 
     condition or vary employee benefit contributions because an 
     employee is eligible for this program subsidy. An employer is 
     still free to cease or reduce employer contributions for 
     health insurance coverage as long as it applies to all its 
     employees.

     

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