Staying alive: SCHIP can continue, not expand
Staying alive: SCHIP can continue, not expand
The State Children's Health Insurance Program (SCHIP) has been kept alive with President Bush's signature on legislation to continue funding through March 2009, but the program will not expand the way congressional Democrats had hoped.
White House spokesman Tony Fratto said the bill should provide enough money to cover those children currently enrolled in the program. "We're pleased that the program will be extended and that states can be certain of their funding," he said.
Congressional Democrats said they would continue to negotiate with their Republican counterparts for a long-term program reauthorization that would include some level of expansion. House Speaker Nancy Pelosi (D-CA) said Democrats would not stop "until 10 million children receive the health care coverage they deserve."
The vote in Congress to approve a continuing resolution to maintain coverage for current beneficiaries came after the president twice-vetoed bills containing spending increases of $35 billion and a tobacco tax pushed by the Democrats. Democrats also have been unable to rollback August 2007 Bush administration guidelines requiring states to enroll at least 95% of eligible low-income children before expanding eligibility to children in families with higher incomes.
Georgetown University Center for Children and Families executive director Cindy Mann said that new rule was "definitely a step backward from where we started in 2007. We would have seen growth in the program. We're not going to see that growth, and by August, we'll start to see a ratcheting down."
At issue for many states and lawmakers was the question of expanding SCHIP by allowing coverage for middle-income families. While some Republicans indicated a desire to continue working with Democrats on some sort of compromise, others were satisfied with the continuing resolution. For instance, House Republican leader John Boehner (R-OH) said the extension "provides all the resources necessary to cover low-income children who need quality health care."
Dropped coverage feared
Republicans have said program expansion should not allow middle-income families to drop private coverage in favor of the public program.
Virginia was one of several states that had started 2007 thinking about expanding SCHIP eligibility limits. The state program provides health coverage for families with up to twice the federal poverty level or $34,340 for a family of three. Virginia SCHIP official Cindi Jones said the state had considered moving the eligibility limit up to at least $42,925. But that notion is now on hold. "This just didn't seem like the right time to raise the eligibility with the uncertainty of what's going on at the federal level," she told the Associated Press. "We were all very, very hopeful. Now we feel like they are farther apart than they were a year ago."
Likewise, West Virginia legislators had approved an expansion that would have added 4,000 children to the SCHIP rolls by raising the eligibility level from $37,774 for a family of three to $51,510. But that potential growth also is now on hold.
According to the new guideline, before states can cover higher-income children, they must enroll at least 95% of children eligible for Medicaid and SCHIP with incomes less than twice the poverty level. Officials in many states have said meeting such a threshold is virtually impossible. But even if it could be met, the guideline also says middle-income children have to be without private coverage for a full year before they can enroll in SCHIP and their families would have to pay premiums or copayments equaling 5% of their income.
Meanwhile, the administration is moving forward with restrictions on states' ability to expand Medicaid eligibility as well. The Medicaid restrictions mirror those that have created controversy for SCHIP.
Until now, states have had the freedom to set Medicaid eligibility criteria. While the administration has not openly said it intends to apply the August 2007 SCHIP guidelines to Medicaid, the New York Times reported that officials in Louisiana, Ohio, and Oklahoma said they discovered the administration's intent as they negotiated Medicaid changes at the end of 2007.
Thus, on Dec. 20, the Centers for Medicare & Medicaid Services (CMS) rejected an Ohio plan to expand its Medicaid program to cover some 35,000 more children. Ohio offers Medicaid to children with family income up to twice the poverty level, or about $41,000 a year for a family of four. The state wanted to increase eligibility to three times the poverty level, about $62,000 a year.
Consistent and logical
"Federal officials told us that they would apply the criteria set forth in the Aug. 27 letter to our proposal for expansion of Medicaid," said Ohio Medicaid director Cristal Thomas. And Center for Medicaid and State Operations director Dennis Smith told the newspaper that to be "consistent and logical, you have to apply the criteria to Medicaid and CHIP."
He said the concern about people substituting government programs for private insurance coverage applies to both Medicaid and SCHIP, since they both are government programs.
"We want states to focus on enrolling their neediest population before they consider expanding Medicaid and CHIP to middle-income families," Fratto said. "This policy demonstrates the president's compassion. He wants to direct scarce tax dollars to those with the greatest needs."
Eight states have filed suits in federal court challenging the administration's SCHIP guidelines. One suit was filed by New Jersey, while another was to come from New York, Maryland, Illinois, and Washington State, with amicus briefs from Arizona, California, and New Hampshire.
The New Jersey suit claims the Bush administration is trying to impose "mandatory, rigid, and illegal" income limits by imposing "arbitrary and capricious" new rules. The suit says CMS violated the law by not publishing a Federal Register notice and allowing a public comment period before announcing the new requirements.
The suit says the change "is a sudden and unfounded reversal of long-standing federal policy and nine years of express federal approval of New Jersey's SCHIP programs and procedures."
The other suit alleges the rule oversteps the government's authority to set income limits for SCHIP beneficiaries. New York Gov. Eliot Spitzer said the suit was necessary to send "a powerful and compelling message when the U.S. Congress, states across the nation, and the public are so clearly committed to ensuring the families have access to affordable health care for their children."
Child coverage at risk
Meanwhile, five top congressional Democrats weighed in with a letter to HHS secretary Mike Leavitt expressing concern that the rule endangers coverage for low-income uninsured children.
Senate Finance Committee chairman Max Baucus (D-MT), Senate Finance Health Subcommittee chairman John Rockefeller (D-WV), House Energy and Commerce Committee chairman John Dingell (D-MI), House Energy and Commerce Committee Health Subcommittee chairman Frank Pallone (D-NJ), and House Oversight and Government Reform Committee chairman Henry Waxman (D-CA) urged Leavitt to "immediately reverse this course of action."
The five said they were "intimately familiar" with SCHIP's original objectives and are "profoundly troubled by administrative efforts to limit the broad flexibility afforded states under the original SCHIP statute and to limit longstanding flexibility under Medicaid....Federal law does not authorize CMS to effectively impose an eligibility cap in SCHIP or Medicaid, nor does it require states wanting to cover children at higher levels than 250% of poverty...to have to use 100% state-only funds to do so."
According to the lawmakers, the 9 million U.S. children who lack health insurance aren't uninsured because their families are turning down affordable, comprehensive private coverage. "These children are uninsured because private coverage is either not offered at all or otherwise inaccessible," they said. "The Aug. 17 directive prohibits states from covering more uninsured children on the theory that millions of children eligible for SCHIP have access to private coverage that their families can afford and that meets their needs. The practical effect of this misguided perspective is that millions of children will continue to be uninsured. The states that have decided to extend coverage to additional low-income children have determined that these children indeed need the coverage and have put their state funds on the line to that end. SCHIP and Medicaid are designed to assure that the federal government would be a partner in such efforts to provide health care coverage to children, but CMS' actions have unilaterally abrogated that partnership."
Poll results mixed
As the suits against the administration were filed, a public opinion poll found that 52% of U.S. residents trust the Democrats to handle SCHIP issues, but also agree with President Bush that government aid should be targeted to low-income families.
The USA Today/Gallup poll reported that 52% of people agree that SCHIP beneficiaries should be children in families with annual incomes up to 200% of the federal poverty level, and 40% said coverage should be extended to children in families with income up to 300% of poverty. Also, 55% of respondents said they were very or somewhat concerned that SCHIP would create an incentive for families to drop private coverage.
USA Today said the poll means that "while Bush may be losing the political battle with Democrats, he may be doing better on policy." (The poll was taken before the president signed the continuing resolution funding SCHIP until 2009.) And Leavitt said while there's a lot of politics being played on the issue, "the politics will last a matter of weeks [and] policy here will go on for decades. We have to get this right."
"For most Americans, there's a recognition that people at moderate income levels are struggling to afford health insurance," said former CMS administrator Mark McClellan. "They're just not sure that having the government pay almost all of the cost is the way to solve the problem."
The State Children's Health Insurance Program (SCHIP) has been kept alive with President Bush's signature on legislation to continue funding through March 2009, but the program will not expand the way congressional Democrats had hoped.Subscribe Now for Access
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