SCHIP Rules Will Limit Number Of Children With Health Insurance

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State Children's Health Insurance Program

The National Association of State Medicaid Directors and the American Public Human Services Association on Tuesday sent a letter to HHSSecretary Mike Leavitt saying that recent Bush administrationguidelines that limit SCHIP enrollment to the lowest-income childrenwill reduce flexibility and make it difficult for states to expandcoverage, CQ HealthBeat reports (Wayne, CQ HealthBeat, 9/4).

Under the new standards -- announced on Aug. 17 in a letter from Dennis Smith, director of the Center for Medicaid and State Operations-- states must demonstrate that they have enrolled at least 95% ofchildren in the state below 200% of the federal poverty level who areeligible for Medicaid or SCHIP before expanding eligibility to childrenin families with incomes greater than 250% of the poverty level. Statesseeking to expand SCHIP eligibility also must establish a minimum of aone-year period of uninsurance for individuals in families with incomesgreater than 250% of the poverty level to prevent them from switchingfrom a private insurance plan to a public program.

In addition,states that insure children in families with annual incomes greaterthan 250% of the poverty level must prove that the number of childrenin the target population insured through private employers has notdecreased by more than two percentage points over the prior five-yearperiod. States also will need to adopt policies to prevent employersfrom changing dependent-coverage policies that would favor a shift topublic coverage (Kaiser Daily Health Policy Report, 8/22).

Letter Details

NASMD and the American Public Human Services Association called on theBush administration to rescind the new rules, but they did not say thatthey plan to sue the government to block the new standards, accordingto CQ HealthBeat. According to the NASMD letter, thepolicy "effectively changes the nature of the SCHIP program byseriously limiting the states' flexibility in designing programs,imposing mandatory cost-sharing requirements, requiring additionalreporting mandates and imposing burdensome waiting periods" (CQ HealthBeat, 9/4).

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Themajor concern for the Medicaid directors is the 95% enrollmentrequirement, which "would be very difficult for most states," NASMDspokesperson Frank Solomon said. According to Solomon, "We think thatmost states cover between 70% and 80% of the eligible children" (Lopes,Washington Times, 9/5).

Smithin a statement said, "The fact is, we are strongly trying to convey tothe states that as more seek to expand SCHIP to children inhigher-income families, we need to ensure that states first find theirlow-income children, the children for whom SCHIP was created, beforethe program is expanded to higher-income children" (CQ HealthBeat, 9/4).

Conference Committee

Meanwhile, Senate Republicans on Tuesday blocked a request to appointconferees to begin negotiations on the House and Senate versions ofSCHIP legislation, making it unlikely that a conference committee willconvene this week, CongressDaily reports (Johnson, CongressDaily, 9/4).

SenateMinority Leader Mitch McConnell (R-Ky.) objected to a request by SenateMajority Leader Harry Reid (D-Nev.) to appoint conferees to thecommittee and begin negotiations as soon as the House legislation wasreceived. McConnell said he objected because the House had not formallyrequested a conference on the bills (CQ HealthBeat, 9/4).

Senate Finance Committeeranking member Chuck Grassley (R-Iowa) said he wants assurances beforethe conference committee meets on the size and scope of the SCHIPpackage, according to an aide. An aide for Senate Finance CommitteeChair Max Baucus (D-Mont.) said that discussions would begin regardlessof whether a formal conference committee convenes (CongressDaily, 9/4).

However,Republicans do not expect that conferees will be able to produce aconference report before the program expires on Sept. 30 because ofSenate opposition to Medicare Advantage cuts and other issues presentin the House bill (HR 3162),Republican aides said on Tuesday. Without a conference report,lawmakers would need to pass an extension for the program, which likelywould maintain current funding levels. It is not clear how long theextension would last, according to CongressDaily (Johnson/Bourge, CongressDaily, 9/5).

Editorials, Opinion Piece

  • Baltimore Sun:"Congress should treat" the Bush administration guidelines "asinspiration to quickly come to terms on how the program can be evenmore effective in making medical services available to this vulnerablegroup of young people," according to a Sun editorial. Itcontinues, "Ensuring that children get screenings and other preventivecare early in their lives is a bargain compared with dealing later withchronic ailments," adding, "Congress should not allow Mr. Bush to sourthe deal" (Baltimore Sun, 9/5).
  • Chicago Tribune:"The new rules go too far in straitjacketing some states," and greater"flexibility is necessary because of variations in cost of living andin the price of insurance coverage," a Tribune editorialstates. However, the "thrust of the rules is correct: Instead ofaggressively expanding benefits further into middle-income families,the better way is to focus on signing up the poorest kids who arealready eligible," according to the editorial. The administration "isright to fight what amounts to an ill-considered case of mission creepfor this vital program," the Tribune concludes (Chicago Tribune, 9/5).
  • Shikha Dalmia, Detroit News:"By dwelling on" a provision of the House SCHIP bill that would allowstates to determine proof-of-citizenship requirements, Republicans"only distract attention from the real problems with what Democrats aredoing," Dalmia, a senior analyst at the Reason Foundation, writes in a Newsopinion piece. Dalmia continues that under an SCHIP expansion, "morekids might well grow up under government coverage than privatecoverage," which "would be a giant step away from market-basedreforms." However, Dalmia writes that "it's far from clear thatAmericans want a government takeover of health care," and if "that'swhat Democrats want, Republicans should force them to openly debatetheir plans," concluding, "That won't happen so long as Republicanskeep obsessing about phantom problems like illegal immigration"(Dalmia, Detroit News, 9/5).
  • Evansville Courier & Press:"The financing of the congressional plans" for SCHIP "leaves a lot tobe desired" because it "relies on big tax increases on tobacco, aproblematic source of revenue, and proposed cuts and savings inMedicare that may not survive," according to a Courier & Presseditorial. It concludes, "How Bush and Congress resolve this under theadded pressure of the presidential campaigns will do much to determinethe direction of federal health care policy in this nation" (Evansville Courier & Press, 9/2).
  • Pittsburgh Post-Gazette:"Congress must stand up against this bullying from the Bushadministration" by reauthorizing SCHIP "at meaningful levels so it cancontinue to grow, and they must do so in sufficient numbers to quietthe threat of a veto," the Post-Gazette writes in an editorial. According to the Post-Gazette,"Legislation also can be crafted to get around the new backdoor rulesthat take away the flexibility that has enabled states to tailor[S]CHIP to fit their needs." The editorial concludes, "Otherwise, therewill be one more black eye on how this nation takes care of its health"(Pittsburgh Post-Gazette, 9/5).

Reprinted with permission from kaisernetwork.org. Youcan view the entire Kaiser DailyHealth Policy Report, search the archives, and sign up for email deliveryat kaisernetwork.org/email. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, afree service of The Henry J. Kaiser Family Foundation.

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