Bipartisan agreement has been reached on a reauthorization package that would cover an extra 3.3 uninsured children, Senate Finance Committee leaders announced on Friday. Children whose household incomes are up to 300% of the federal poverty line will be covered.

The Senate Finance Committee said a 61 cent per pack tax on cigarettes would make sure the 6.6 million children who are currently covered would remain so. Extra taxes will also be levied on other tobacco products.

Children whose household incomes are up to 300% of the federal poverty line will be included in the SCHIP program. If states cover these children they will qualify for lower Medicaid matching payments. George Bush and his administration prefer SCHIP payments to be made just for children whose household incomes are up to 200% of the poverty line.

Finance Committee Chairman, Max Baucus (D-Mont) said of the program "(it) has helped millions upon millions of low-income, uninsured American kids see doctors when they're sick. This agreement will make sure that even more children get the health care they need."

-- Statement by Sens. Grassley and Hatch on a potential veto of possible legislation to reauthorize the SCHIP program (pdf)

The subject of children's health insurance has become an ideological debate over the role of government in healthcare, politicians also disagree on how it should be funded. The program will expire on September 30, 2007.

The Democrats would like to see even more money available over the five-year period. They say that if payments to private Medicare plans for seniors were trimmed, that saving could be used for the extra SCHIP funding. The extra money would cover even more of the USA's 8.3 million uninsured children, and further reduce the number of uninsured Americans from its current estimate of 45 million people.

George Bush says these proposals are just an attempt to give government a bigger role in healthcare and take away individual choice. His proposal, according to the Congressional Budget Office, does not include enough money to even keep the current number of children covered.

Bush said "The program is going beyond the initial intent of helping poor children. It's now aiming at encouraging more people to get on government health care. It's a way to encourage people to transfer from the private sector to government health-care plans. I think it's wrong, and I think it's a mistake."

It is most likely Bush's senior advisers will recommend a veto on the Senate Committee's proposal.

What is SCHIP?

SCHIP stands for the State Children's Health Insurance Program. It is a national (USA) program aimed at families who earn too much to be eligible for Medicaid, but cannot afford private insurance. The aim of the program was to address an ever-growing problem of children without health insurance. SCHIP began in 1997, Medicaid began in the 1960s.

-- State Children's Health Insurance Program

What is the poverty line? Annual household income:

1 person in the family unit - $9,800 (Alaska - $12,250) (Hawaii - $11,270)
2 persons in the family unit - $13,200 (Alaska - $16,500) (Hawaii - $15,180)
3 persons in the family unit - $16,600 (Alaska - $20,000) (Hawaii - $19,090)
4 persons in the family unit - $20,000 (Alaska - $25,000) (Hawaii - $23,000)
5 persons in the family unit - $23,400 (Alaska - $29,250) (Hawaii - $26,910)
For each additional person, add $3,400 (Alaska - $4,250) (Hawaii - $3,910)
(Source: The Federal Register)