THE STATE OF...

THE STATE OF PLAY ON S-CHIP. My column today is on the ideological subtext of the fight over reauthorizing and expanding the State Children's Health Insurance Program (S-CHIP), and how the White House has turned it into a proxy war over universal health care. Read it and be enlightened. But before the showdown gets much further, the various bills actually have to pass Congress, which, for the first time in Nancy Pelosi's leadership, appears tough.

The hang-up is, essentially, tobacco. The House bill reauthorizing and expanding S-CHIP pays for itself in a couple ways, the primary one being a 41 cent increase in the tobacco tax. This has left Democrats from tobacco states deeply skittish about the legislation. Add in the usual intransigence of Blue Dog and business friendly types, both of whom are grumbling about the increase in spending and the levying of a new fee, and the House bill is expected to actually spark a fight inside the caucus.

The House bill also has another element, which the Senate bill completely foregoes: Reform of the Medicare Advantage plans. For a longer explanation of this issue, Bob Berenson wrote a piece on it back in December. But the quick lay of the land is this: Back in 1982, Congress tried to unleash the magic of the free market by letting private insurers offer Medicare plans for seniors who wanted them. The insurers would be paid at the same rates as Medicare and, if they were indeed more efficient, could then offer more expansive benefits and out-compete the public program.

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