WASHINGTON, DC — New Bush Administration guidelines on the State Children's Health Insurance Program would completely undermine the basic authority of states to set their own limits on SCHIP coverage, even as the House and Senate work toward a compromise on renewal of the program.
Issued on Friday, the new guidelines set insurmountable hurdles for states that provide coverage to children in families with incomes over 250 percent of the federal poverty level, currently $42,925 for a family of three. At least 18 states provide coverage that exceeds these new limits, and others states are looking at similar expansions of eligibility for the program
"The Administration's new requirements will effectively establish a new income limit for SCHIP at 250 percent of poverty," Kathleen Stoll, Director of Health Policy for Families USA. "Under current law, states can decide for themselves what the income limit for SCHIP should be. This new policy guts the ability of states to tailor their own SCHIP programs. Even worse, it eliminates health coverage for tens of thousands of children in at least 18 states and it blocks other states from enrolling additional uninsured children.
"To make matters worse, the Administration is taking this outrageous action in the middle of a Congressional debate over the reauthorization of SCHIP where members of Congress on both sides of the aisle have announced their intention to expand the program and reduce the overall number of uninsured children," Stoll said. "Moreover, both Houses of Congress have passed legislation that rejects these very same changes to SCHIP. These Administration polices, which were quietly made public at 8 p.m. on Friday, are nothing more than an end-run around Congress, and the net effect of these new policies will be to add to the already more than 9 million uninsured children in America."
As one roadblock to expanded coverage, the Administration asserts that states must certify they are covering 95 percent of eligible children below 200 percent of the federal poverty level. "This misguided policy was offered as an amendment to the Senate CHIP Reauthorization Act of 2007 by Senator Ensign (R-NV) and was withdrawn when it became clear that it would have been defeated," Stoll said. "It is an unreasonable standard that no state currently meets. If the Administration really wants more children enrolled in SCHIP, it should support -- not threaten to veto -- the bipartisan proposals efforts moving through Congress."
As a second roadblock, the Bush Administration says states can't cover children in families with incomes over 250 percent of poverty if they have experienced a decline in employer-sponsored insurance coverage of more than 2 percent over the previous five years among these families.
"Employer-sponsored coverage can decline for many reasons -- such as natural disasters, economic slowdowns, and industry failures -- that are completely unrelated to the availability of SCHIP," Stoll said. "Over the past 10 years, SCHIP has provided health cover for families who have lost access to private health coverage, reducing the number of uninsured children by one-third at the same time that the number of uninsured adults has increased. The new policies seek to undermine a successful bipartisan program that would aid an untold number of children in the future."
Another roadblock forces states to adopt 12-month waiting periods and unaffordable cost-sharing amounts for children in families with incomes over 250 percent of poverty.
"Rather than allowing states to implement policies that make sense for them, the administration will require every state that chooses to cover children in families with incomes over 250 percent of poverty to adopt the same onerous policies -- even if there is no evidence of crowd-out related to the availability of SCHIP." Stoll said. "These policies will mean more children going uninsured for longer periods of time, and more children who will remain uninsured because they cannot afford SCHIP."
Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality, affordable health care for all Americans.