Medicaid, SCHIP, and Other Health Provisions in H.R. 4954: The Medicare Modernization and Prescription Drug Act of 2002, and S. 3018: The Beneficiary Access to Care and Medicare Equity Act of 2002

Publication Date: November 2002

Publisher: Library of Congress. Congressional Research Service

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Research Area: Health

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Abstract:

Medicaid is a joint federal-state entitlement program that pays for medical assistance primarily for low-income persons who are aged, blind, disabled, members of families with dependent children, and certain other pregnant women and children. Within broad federal guidelines, each state designs and administers its own program. The federal government shares in a state’s Medicaid costs by means of a statutory formula designed to provide a higher federal matching rate to states with lower per capita incomes. The State Children’s Health Insurance Program (SCHIP) is another joint federal-state program that allows states to extend coverage to children in families with income that is too high to qualify for Medicaid coverage.

Two bills under consideration in the House and the Senate would make important changes to Medicaid and SCHIP. The Medicare Modernization and Prescription Drug Act of 2002 (H.R. 4954), passed the House on June 28, 2002. On October 1, 2002, the Senate Committee on Finance introduced the Beneficiary Access to Care and Medicare Equity Act of 2002 (S. 3018). While the bills are very different from each other, both are largely comprised of provisions affecting the Medicare program, and both include important changes to Medicaid, SCHIP and other health programs. Among the Medicaid provisions, both bills would increase annual disproportionate share hospital (DSH) allotments to states beginning in FY2003, but use different methods to achieve those increases. S. 3018 would also temporarily increase the federal Medicaid matching rate for certain states and would provide additional funds to states for fiscal relief through the Social Services Block Grant program, a program that funds a wide variety of social services programs. With respect to SCHIP, S. 3018 would significantly change the method by which unspent federal funds are redistributed among states. Finally, with respect to both Medicaid and SCHIP, S. 3018 places on both states and the Secretary of HHS certain public notice and hearing requirements, as well as requirements regarding receipt and consideration of public comments in the waiver development, review and approval process. It also clarifies other parameters of the Secretary’s waiver authority.

The following side-by-side comparison provides a brief description of current law and the changes that would be made to Medicaid, SCHIP and other health programs under H.R. 4954 and S. 3018. These provisions can be found in Title IX of H.R. 4954, and Titles VII and VIII of S. 3018. The other titles of both bills are devoted to major changes to the Medicare program (not described here). In addition, Medicare provisions in Title VIII of S. 3018 are not described here.