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Restrictions On States' Abilities To Expand Medicaid Eligibility

Armen Hareyan's picture

Medicaid Eligibility

The Bush administration is imposing restrictions on the ability ofstates to expand their Medicaid programs that mirror a policydirective announced in August 2007 that limits states' abilities toexpand SCHIP, the New YorkTimes reports. According to the Times, theadministration "had not openly declared that it would apply theAugust directive to Medicaid," but "[s]tate officials inLouisiana, Ohio and Oklahoma said they had discovered theadministration's intent in negotiations with the federal governmentover the last few weeks" (Pear, New York Times,1/4).

The Bush administration in a letter to state officialson Aug. 17, 2007, outlined new standards for SCHIP enrollment thataim to limit coverage to the lowest-income children. The guidelinesstate that before expanding SCHIP eligibility to children in familieswith incomes greater than 250% of the federal poverty level, statesmust demonstrate that they have "enrolled at least 95% ofchildren in the state below 200% of the federal poverty level"who are eligible for Medicaid or SCHIP, according to the letter sentby Dennis Smith, director of the Centerfor Medicaid and State Operations (Kaiser Daily Health PolicyReport, 8/21/07).

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Ohio Medicaid Director Cristal Thomas said,"Federal officials told us that they would apply the criteriaset forth in the Aug. 17 letter to our proposal for expansion ofMedicaid." The state had planned to expand its Medicaid programto cover an additional 35,000 children by extending eligibility tofamilies with incomes up to 300% of the poverty level.

Smithconfirmed that account, according to the Times. He said,"To be consistent and logical, you have to apply the criteria toMedicaid and [SCHIP]." According to Smith, there is concernunder both programs that people would drop private coverage to enrollin a government-sponsored plan. Smith said states will not be able to"sidestep the Aug. 17 policy directive" by expandingMedicaid. White House spokesperson Tony Fratto said, "We wantstates to focus on enrolling their neediest population before theyconsider expanding Medicaid and [SCHIP] to middle-income families."Fratto added, "This policy demonstrates the president'scompassion. He wants to direct scarce tax dollars to those with thegreatest needs."


According to the Times, some state officialscriticized the policy and the way it was adopted. Mike Fogarty, CEOof the OklahomaHealth Care Authority, said, "The Aug. 17 letter is [anSCHIP] policy. But it's being applied in a much broader way. We areseeing many more roadblocks." The Oklahoma Legislature in May2007 voted to expand Medicaid eligibility to 42,000 children infamilies with incomes up to 300% of the poverty level. However,Fogarty said, "In recent weeks, we got a very clear signal fromfederal officials that we would not be allowed to go beyond 250% ofthe poverty level."

Louisiana lawmakers in June 2007approved legislation to increase SCHIP income eligibility limits from200% of the poverty level to 300%. However, J. Ruth Kennedy, deputydirector of the state's Medicaid program, said the state has had to"change course" after the August letter from the Bushadministration. "We found that we have much less flexibility tomake changes in Medicaid than we thought," Kennedy said (NewYork Times, 1/4).

Reprinted with permission fromkaisernetwork.org.You can view the entire KaiserDaily Health Policy Report, search the archives, andsign up for email delivery at kaisernetwork.org/email. The Kaiser Daily Health Policy Report ispublished for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.