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U.S President Defied-Senate Votes To Expand Child Health Insurance

A U.S Senate panel has voted to hike the taxes on tobacco in order to expand health insurance for children of low-income working families. The move came in the face of a threat from the President himself and had 6 of the 10 Republicans on the panel , join all 11 Democrats in supporting the plan.

Until now, the State Children's Health Insurance Program (S-CHIP) has been a federal-state collaboration with broad support from both parties. The program subsidizes insurance for children and some adults with incomes too high for Medicaid but not high enough to afford private insurance. Legal authority for the program expires by Sept. 30, and its renewal is considered the most important vote Congress will take this year on health insurance.

The program began 10 years ago. It was generally designed to help families whose income does not exceed 200 percent of the poverty level, or $34,340 for a family of three. But several states have extended coverage to children with higher incomes and to adults. The latter expansion has particularly incensed some lawmakers who disapprove of waivers the Bush administration has granted to those states.

The program now costs the federal government about $5 billion a year, with states contributing additional money. Now, the Senate plan would add about $35 billion in federal money over five years, enough to cover 3.3 million more out of as many as 9 million uninsured children. In order for this to happen, the plan would have to boost taxes on tobacco products. Cigarette tax would increase to $1 a pack, from 39 cents now. And taxes on cigars would more than double, to as much as $10 for the most expensive ones.

Opines Sen. Orrin Hatch: "It doesn't make me comfortable to advocate for such a large increase in spending. But it's important to note that (the program) has been tremendously successful. And one of the lessons we've learned is that it's going to cost more to cover additional kids."
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