President Clinton and Republican congressional leaders sparred last week over what benefits should be guaranteed in an expansion of children's healthcare coverage.
While the White House and advocates for expanded coverage were pushing for a defined-benefit package, congressional Republicans were preparing a proposal to give states more control of the matter.
Under their proposal, states would select a coverage option for children among a menu of choices and buy benefits equal to the actuarial value of the option, such as Medicaid or the federal employees' Blue Cross and Blue Shield plans.
In other words, states would have a certain amount of money to spend based on the value of the coverage option they picked. They then could spend that money to purchase a set of benefits of their choosing.
Critics say such a proposal would weaken children's healthcare coverage. That's because states might purchase insurance that offers too few benefits or excludes the primary- and preventive-care services particularly needed by children.
In response, state governors argue that a defined-benefit package would reduce the number of children that could be covered. Governors will have the task of expanding children's coverage with $16 billion in federal revenues over five years.
Clinton last week advocated a defined-benefit package at an event announcing rising rates of immunization among children. He also urged Congress to include in its tax package a Senate-passed provision raising cigarette levies by 20 cents per pack. That would produce an additional $8 billion for children's healthcare over five years.