HHS ‘Wrongly’ Approved CHIP Waivers Allowing States To Use Funds To Cover Childless Adults, GAO Says
HHS may have "wrongly" allowed states to use unspent CHIP funds to provide health coverage for adults without children, according to a GAO report released Tuesday, the AP/Atlanta Journal-Constitution reports (Meckler, AP/Atlanta Journal-Constitution, 8/7). In the report, GAO auditors examined 13 waiver applications that states submitted between August 2001 and May 2002 to extend CHIP coverage to uninsured adults or to provide prescription drug coverage to low-income seniors through Medicaid. HHS approved four of the applications, including waivers to allow Arizona and California to use unspent CHIP funds to cover low-income adults who do not qualify for Medicaid. Arizona's waiver allows the state to use unspent CHIP funds to cover "previously uninsured" low-income adults, including those who do not have children, and California's waiver allows the state to use the funds to cover the parents of children enrolled in CHIP and Medicaid.
According to the GAO report, HHS' decision to approve Arizona's waiver "is not consistent" with the CHIP program's "statutory objective" to cover uninsured low-income children, and thus "is not authorized." The report also said that the waiver could prevent the reallocation of unspent federal CHIP funds to other states that have used their allocations, a requirement under federal law. In addition, the report found that HHS may have approved the Arizona and California waivers "without regard to cost effectiveness." Federal law allows states to use unspent CHIP funds to cover the parents of children enrolled in CHIP and Medicaid "only if it is cost effective to do so," the report said (GAO report, 7/12). The report also said that the waivers could cost the federal government "tens of millions of dollars" in health coverage for individuals who would not have qualified for the benefits without the waivers (New York Times, 8/8). Several other states have applied for similar waivers, and the report said that HHS should "change its policies before it considers them."
Several senators said that the HHS waiver approvals cited in the GAO report violated the "intent of Congress," and they "vowed to stop it if the administration did not," the New York Times reports (Pear, New York Times, 8/8). In a letter sent to HHS Secretary Tommy Thompson on Tuesday, Sens. Max Baucus (D-Mont.) and Charles Grassley (R-Iowa) said, "You should not continue to approve waivers that divert funds set aside by Congress for children to insure childless adults" (AP/Atlanta Journal-Constitution, 8/7). The senators also said that they "intend to take legislative action to end this violation of congressional intent" (New York Times, 8/8). HHS spokesperson Bill Pierce said that the agency approved the waivers to "get health insurance to more people who need it" (AP/Atlanta Journal-Constitution, 8/7). "No one is not getting health insurance as a result of this program," Pierce said, adding that Thompson "wanted to allow states to be as creative and have as much flexibility as possible" (Kemper, Los Angeles Times, 8/8). The GAO report is available online Note: You must have Adobe Acrobat Reader to view the report.This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.