Bush Administration May Limit SCHIP

Congressional attempts to expand the mission of the State Children's Health Insurance Program (SCHIP) are nothing new to readers of this blog. What is new, however, is the Bush administration's latest attempt to stop this expansion. From The New York Times:

The Bush administration, continuing its fight to stop states from expanding the popular Children’s Health Insurance Program, has adopted new standards that would make it much more difficult for New York, California and others to extend coverage to children in middle-income families.

Predictably, the states are screaming bloody murder. According to the Times:

After learning of the new policy, some state officials said yesterday that it could cripple their efforts to cover more children and would impose standards that could not be met.

“We are horrified at the new federal policy,” said Ann Clemency Kohler, deputy commissioner of human services in New Jersey. “It will cause havoc with our program and could jeopardize coverage for thousands of children.”

Stan Rosenstein, the Medicaid director in California, said the new policy was “highly restrictive, much more restrictive than what we want to do.”

And that's the whole point of the new rules - to be more restrictive and bring the program back to its original intent. To quote again from the Times:

The poverty level for a family of four is set by the federal government at $20,650 in annual income. Many states have received federal permission to cover children with family incomes exceeding twice the poverty level — $41,300 for a family of four. In New York, which covers children up to 250 percent of the poverty level, the Legislature has passed a bill that would raise the limit to 400 percent— $82,600 for a family of four — but the change is subject to federal approval.

California wants to increase its income limit to 300 percent of the poverty level, from 250 percent. Pennsylvania recently raised its limit to 300 percent, from 200 percent. New Jersey has had a limit of 350 percent for more than five years....

In his budget in February, President Bush proposed strict limits on family income for the child health program. Both houses of Congress voted this month to renew the program for five years, but neither chamber accepted that proposal. Legal authority for the program expires on Sept. 30....

[In a statement, Dennis G.] Smith [, director of the federal Center for Medicaid and State Operations,] set a high standard for states that want to raise eligibility for the child health program above 250 percent of the poverty level.

Before making such a change, Mr. Smith wrote, states must demonstrate that they have “enrolled at least 95 percent of children in the state below 200 percent of the federal poverty level” who are eligible for either Medicaid or the child health program....

In an interview yesterday, Mr. Smith said, “The program was always meant for children in lower-income families.” As a state increases its income limits, he said, “it’s more likely to substitute for private coverage.”

Kudos to the administration for attempting to arrest the mission creep infecting SCHIP. No one wants to deny health coverage to low income children, but if a line is not drawn, SCHIP could easily expand into the basis for a state run health system, which is not a pretty prospect in my book.