Senate backs expansion of health program

Registered Nurse Joann Lee checks the blood pressure of Russell Alongi, 16, as he lies down in his room at the Children's Hospital in New Orleans, Louisiana on October 10, 2005.

WASHINGTON (Reuters) - The Senate on Thursday voted to expand a popular children's health program and raise tobacco taxes to pay for it in what could be a big step toward fulfilling President Barack Obama's promise of making affordable health insurance available for all Americans.

The Senate voted 66-32 for the $32.8 billion plan to expand the State Children's Health Insurance Program to insure as many as 11 million children. The program currently covers about 7.4 million children.

The House of Representatives has approved similar legislation and the two bodies have to work out their differences before sending the bill to Obama for his signature. House Speaker Nancy Pelosi, a California Democrat, said she expected the House to approve a final version of the bill next week.

Former President George W. Bush twice vetoed similar legislation even though it enjoyed broad bipartisan support.

"It is a new era," said Senate Finance Committee Chairman Max Baucus, a Montana Democrat who helped write the legislation. "We have a new opportunity, and I think most senators are proud of the efforts we are undertaking to help more kids get better health insurance."

Baucus has called the bill a start toward the national health care reform promised by Obama during his presidential election campaign.

REPUBLICAN CONCERNS

Senate Republicans balked at the latest version of the bill because it omitted provisions in earlier versions aimed at preventing states from offering the program to higher-income families. They also voiced concern about families and employers dropping private insurance in favor of the government program.

"It doesn't do us any good to add somebody to the government-run program if the only effect of that has caused them to lose their insurance policy from their family's employer," said Sen. Jon Kyl, an Arizona Republican.

The Republicans complained that the bill would allow New York to enroll children from families earning as much as $88,000, and New Jersey to enroll families earning as much as $77,000.

Republicans also criticized a provision backed by Democrats that would drop a ban on legal immigrants enrolling in the program until they have lived in the United States at least five years. The Senate rejected Republican efforts to impose stricter income levels and maintain the waiting period for legal immigrants.

The program aims to help working families who earn too much to qualify for Medicaid health care coverage for the poor, but who cannot afford private health insurance.

The bill passed by the Senate, like the House legislation, includes a 61 cent per pack increase in cigarette taxes, bringing the total federal tax to $1 a pack. The tax on cigars and other tobacco products would also rise.

OTHER HEALTH CARE SPENDING

With Obama making health care a high priority, the additions to the children's health program will come on top of more than $140 billion in health care spending in the nearly $900 billion economic stimulus package the Senate plans to take up next. The House this week passed an $819 billion version of the package.

The stimulus package includes $87 billion to help cash-strapped states pay for Medicaid and $25 billion to help the unemployed pay for their health insurance. The House package includes about $39 billion in health insurance aid for the unemployed.

About $20 billion is available in the stimulus to help hospitals and doctors upgrade technology to help coordinate care and lawmakers proposed spending more than $1 billion to study the effectiveness of various medical treatments.

(Editing by Mohammad Zargham)