White House Moves To Restrict Eligibility for Kids’ Insurance
The Bush administration in a letter to state lawmakers on Friday outlined new standards for SCHIP enrollment that aim to limit coverage to the lowest-income children, the New York Times reports.
The new guidelines state that before expanding SCHIP eligibility to children in families with incomes greater than 250% of the federal poverty level, states must demonstrate that they have "enrolled at least 95% of children in the state below 200% of the federal poverty level" who are eligible for Medicaid or SCHIP, according to the letter sent by Dennis Smith, director of the Center for Medicaid and State Operations.
States seeking to expand SCHIP eligibility also "must establish a minimum of a one-year period of uninsurance for individuals" in families with incomes greater than 250% of the poverty level to prevent them from switching from a private insurance plan to a public program, the letter states.
In addition, Smith wrote that states should impose copayments and premiums that are similar to the cost of private health insurance on middle-income families to prevent them from dropping private coverage to enroll in SCHIP.
States that insure children in families with annual incomes greater than 250% of the poverty level also must prove that "the number of children in the target population insured through private employers has not decreased by more than two percentage points over the prior five-year period," according to the letter (Pear, New York Times, 8/21).
States will need to adopt policies "preventing employers from changing dependent-coverage policies that would favor a shift to public coverage," Smith wrote (Zhang, Wall Street Journal, 8/21).
Proposals under consideration in California would increase eligibility to children from households with incomes that do not exceed 300% of the federal poverty level (New York Times, 8/21).
The focus on "the core uninsured targeted low-income population" will strengthen SCHIP, Smith wrote (Lee, Washington Post, 8/21). The new guidelines will not affect children currently enrolled in SCHIP, Smith's letter said (AP/Arizona Daily Star, 8/21).
However, new applications for expansion plans will be considered under the guidelines, and states are expected to have implemented the policy within a year, according to the letter (Wall Street Journal, 8/21).
The administration "may pursue corrective action" against states that fail to comply, Smith wrote. The guidelines will continue indefinitely, although Democrats in Congress could attempt to override it, the Times reports (New York Times, 8/21).
Eighteen states and Washington, D.C., enroll children in families with incomes greater than 250% of the poverty level or have recently passed legislation to do so, according to Cindy Mann, executive director of the Georgetown University Center for Children and Families (Washington Post, 8/21).
No state has enrolled 95% of uninsured children with incomes less than 200% of the poverty level, according to the AP/Arizona Daily Star. The closest is Vermont with 92% participation (AP/Arizona Daily Star, 8/21).
The policy is an example of the White House "taking action on its own to advance policies that have not been embraced by Congress," the Times reports (New York Times, 8/21).
SCHIP legislation (HR 3162) approved by the House would reduce payments to Medicare Advantage plans and increase the federal cigarette tax by 45 cents per pack to increase funding for SCHIP by about $50 billion over five years. The bill also would make a number of revisions to Medicare.
The Senate version (S 1893) would reauthorize SCHIP and increase the federal cigarette tax by 61 cents per pack to boost funding for the program by $35 billion over five years.
President Bush has proposed a $5 billion increase over five years for SCHIP, which would raise the program's total five-year funding to $30 billion. Bush has said he would veto the House and Senate bills (California Healthline, 8/15).
State officials on Monday said that the guidelines "could cripple their efforts to cover more children and would impose standards that could not be met," according to the Times.
Stan Rosenstein, California's Medicaid director, said that the guidelines are "highly restrictive, much more restrictive than what we want to do."
Ann Clemency Kohler -- deputy commissioner of human services in New Jersey, which has had an income threshold of 350% of the poverty level for more than five years, said, "We are horrified at the new federal policy," adding, "It will cause havoc with our program and could jeopardize coverage for thousands of children" (New York Times, 8/21).
Democrats and children's advocates said that the guidelines "will jeopardize coverage for children whose parents work at jobs that do not provide employer-paid insurance," according to the Washington Post.
Senate Finance Committee Chair Max Baucus (D-Mont.) on Monday called the new guidelines a "drastic change" in policy that "jeopardizes coverage for tens of thousands of children in low-income, working families. New policies like this warrant greater transparency before changes are made," adding, "I hope the administration will reconsider" (Washington Post, 8/21).