The Senate Finance Committee reached agreement Friday on a bipartisan plan calling for a big increase in the cigarette tax to pay for a $35 billion expansion of the Children’s Health Insurance Program over the next five years that subsidizes health coverage for families with incomes too high to qualify for Medicaid but too low to afford insurance on their own.
The plan will cover more than 3 million additional children. The current program covered 7.4 million people at some time in the last year. Renewal of the children’s insurance program, which is set to expire on Sept. 30, is the most important health care issue facing Congress this year.
The agreement would refocus the program on low-income children. The Senate compromise reduces payments to the states for coverage of children with family incomes exceeding three times the poverty level. (The poverty level is $20,650 for a family of four.)
To pay for the plan, the federal excise tax on cigarettes would be increased by 61 cents a pack, to $1 a pack. Taxes will also increase for other tobacco products.
On the negative side, Federal officials could not grant additional waivers to the states for coverage of adults. About 670,000 adults were covered last year as a result of such waivers, some of which were granted or renewed by the Bush administration.
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