Legislation proposing expansion of the federal program originally designed to provide health care insurance for poor children may divide Nebraska’s two senators.

Republican Sen. Chuck Hagel already has announced he’ll oppose the bipartisan plan approved by the Senate Finance Committee to expand eligibility and sharply increase funding.

Democratic Sen. Ben Nelson appears more favorably inclined.

“Although he does have some concerns about the funding mechanism, Senator Nelson thinks the proposed reforms will give Nebraska more tools in providing health insurance coverage for children,” Nelson spokesman David DiMartino said Tuesday.

The Senate proposal appears headed toward enactment this week and an eventual presidential veto.

The bill would expand eligibility to families whose income is equivalent to three times the federal poverty level. It would increase funding by $35 billion over the next five years. 

Expansion of the program would be funded by a 61-cents-per-pack hike in the federal tax on cigarettes, boosting the excise levy to a dollar a pack.

In Nebraska, the state limits its children’s health insurance program (CHIP) eligibility to families with income equivalent to185 percent of the federal poverty level.  That’s below the 200 percent ceiling currently authorized by federal law.

In fiscal 2006, a monthly average of 24,000 children were enrolled through Nebraska’s Kids Connection program, with federal dollars paying 71 percent of the costs.

A family of four with income ranging up to $38,208 is eligible for coverage under the state’s 185 percent of poverty standard, according to Kids Connection program manager Deb Scherer.

Nationally, the children’s health insurance program already has “evolved beyond its original intent,” Hagel said during his telephone news conference from Washington last week.

“It was created in 1997 to provide health care coverage for children whose parents get caught in a trap,” Hagel said. They earned too much income to qualify for Medicaid, but not enough to afford private health insurance.

Children’s advocates in Nebraska support increased federal funding for the program.

Nebraska Appleseed endorsed the Senate Finance Committee plan, describing it as “a great opportunity to significantly decrease the number of uninsured children in Nebraska.”

Voices for Children in Nebraska has suggested funding levels need to be increased to “reach out to all eligible children (and) bring our country closer to the broadly-shared goal of covering all of America’s children.”

Nebraska counts 31,000 uninsured children, including 17,000 estimated to be eligible for CHIP assistance but unenrolled, according to a Congressional Research Service report issued this month.

Although Gov. Dave Heineman has taken no position on specific plans, he signed a National Governors Association letter to congressional leaders praising the “state flexibility and options” included in the Senate Finance Committee proposal.

President Bush has recommended a $5 billion increase in funding for the program compared to the $35 billion in the Senate bill.

Reach Don Walton at 473-7248 or at dwalton@journalstar.com.