Bush SCHIP limits hurt efforts to expand kids coverage, states say

Washington -- The Bush administration, unsuccessful in attempts to scale back the scope of State Children's Health Insurance Program legislation, instead is using its administrative powers to rein in the program.

The Centers for Medicare & Medicaid Services released a guidance letter on Aug. 17 severely limiting states' ability to cover families earning more than 250% of the federal poverty level. Before states could make such a move, they would have to prove that they had enrolled 95% of children at or below 200% of poverty. States also would have to show that private health insurance enrollment had not declined more than 2 percentage points among targeted income groups and that new SCHIP enrollees had been uninsured for one year.

The House and Senate have adopted SCHIP reauthorization bills that would allow states to insure children beyond the new Bush administration limit. Lawmakers are expected to work out a joint measure this month.

CMS has given states that already have coverage limits exceeding the 250% level one year to comply with the new rules. Sources estimated that between 16 and 19 states have SCHIP income limits higher than 250% of poverty.

Some states are seeking federal waivers to allow SCHIP eligibility expansions. These efforts face uncertain futures. One example is New York, where state lawmakers earlier this year increased the state's eligibility limit from 250% of poverty to 400%. The Bush administration has not yet signed off on the move. New York is working with other states to get CMS to reverse its new policy, said Paul Larrabee, spokesman for Gov. Elliot Spitzer.

Stakeholders, health policy analysts and some lawmakers said the policy will handicap state health reforms and reverse SCHIP's success in reducing the number of uninsured children. States have little to no chance of achieving the new standards, they explained.

"As a result of these guidelines, tens of thousands of children could lose their health care coverage or never receive the health care coverage they need," said Jay Berkelhamer, MD, president of the American Academy of Pediatrics.

The American Medical Association is urging the Bush administration to withdraw the new requirements, said Joseph M. Heyman, MD, AMA board chair-elect. "Our goal is to get as many people covered as possible, and all eligible children should be covered under the government health insurance program for kids in low-income families."

Earlier in the year, state Medicaid leaders were excited about tackling health reform with the help of SCHIP expansions, said Martha Roherty, director of the National Assn. of State Medicaid Directors. "Now the states are saying, 'How are we going to do health care reform at all if we have this huge scaling back of the SCHIP program?' " The association asked CMS to rescind the letter.

The guidance is an attempt to stop Congress from expanding SCHIP, said Eileen Kean, director of government affairs for the Medical Society of New Jersey. She believes Congress will override it. New Jersey has the highest SCHIP eligibility in the U.S. at 350% of poverty, and is one of many states that received administration approval to cover higher-income families.

"Having our federal government tell us to change our rules midstream is just ridiculous," Kean said.

However, Sen. Charles Grassley (R, Iowa), who co-sponsored the Senate SCHIP bill, said the policy is a welcome reversal of past overreaching. The Bush and Clinton administrations approved SCHIP waivers and state plan expansions that took scarce resources away from low-income children. "With the new standards it set last Friday, it looks like the Bush administration is trying to get back to the original intent of the law that Congress passed 10 years ago," he said.

Other lawmakers disagreed. Sens. Robert Menendez (D, N.J.) and Gordon Smith (R, Ore.) began circulating a letter to colleagues late last month to show bipartisan opposition to the new SCHIP policies. The senators planned to send the letter to the White House in early September.

Sen. Jay Rockefeller (D, W.Va.) said the administration should be working with Congress instead of trying to circumvent it. "A policy change of this magnitude should, at a minimum, be handled through the formal rulemaking process, with proper public notice and comment."

Impossible standards?

Health policy analysts are skeptical that states could meet all the new standards.

States won't be able to prove they have enrolled 95% of children below 200% of poverty because precise state-level statistics aren't available, said Genevieve Kenney, PhD, principal research associate for health policy at the Urban Institute, a policy research organization. States would need to track family income, insurance and legal status for all children. Only the Census Bureau's population survey measures these factors, and it includes potential sampling errors, she said.

In addition, 95% is a very high enrollment standard, said Robin Rudowitz, principal policy analyst at the Kaiser Commission on Medicaid and the Uninsured. SCHIP and Medicaid programs, on average, have enrolled about 75% of eligible children.

Dr. Kenney also said measuring "crowd out," or the effect of SCHIP replacing private insurance, is problematic. There's no easy way to verify whether a drop in children's private insurance enrollment is because of SCHIP or other factors.

The program already focuses heavily on lower-income families, Dr. Kenney noted. The Congressional Research Service estimates 91% of SCHIP enrollees are from families earning less than 200% of the poverty level, or $20,650 for a family of four.

A popular program

Wide bipartisan support exists among members of Congress and the general public to reauthorize SCHIP, which expires Sept. 30. But lawmakers disagree on who it should serve.

President Bush and some Republicans favor an SCHIP focused on families earning, at most, 250% of the federal poverty level, with safeguards to ensure it serves lower-income children first. Many Democrats and some other Republicans want SCHIP to cover children in families earning 300% or more of the poverty level and to make it easier to enroll.

Eighty-six percent of Americans support and 11% oppose a five-year SCHIP reauthorization, according to a new poll of 900 likely voters conducted in early August for the Robert Wood Johnson Foundation.