SCHIP Reauthorization Sparks Debate on Health Insurance Plans for reauthorization of the State Children’s Health Insurance Program (SCHIP), the popular state/federal program to insure children of families too well off for Medicaid but unable to afford private insurance, collapsed in confusion last month, as the Bush administration took steps to preempt congressional action and state governors vowed to overturn the administration’s move. • The Census Bureau in a report released August 28 said the number of uninsured children in this country increased from 8 million (10.9 percent) in 2005 to 8.7 million (11.7 percent) in 2006. • Both the House and Senate passed bills in late July reauthorizing the SCHIP program, which is slated to expire September 30 this year. The bills differ in some details, but both would provide increases of at least $35 billion to $50 billion over five years in federal matching funds to allow states to enroll more children in SCHIP. • President Bush has said he will veto the SCHIP reauthorization if the bill exceeds his budget request for a more modest increase of $5 billion over the next five years. That would be enough money to allow states to continue to serve children now enrolled in SCHIP, but with no expansion. • At 4:30 on Friday afternoon, August 17, the Centers for Medicare and Medicaid in the U.S. Department of Health and Human Services announced that it had sent a letter to state governors informing them of new conditions that must be met by SCHIP programs before they extend income eligibility levels beyond 250 percent of poverty. Specifically, the new directives require states to have enrolled at least 95 percent of all children in a state whose family incomes are below the 250 percent level before they expand enrollment beyond that level; they must show that employer-based coverage for children has not declined by more than 2 percentage points over the past five years; and there must be a 12-month waiting period before SCHIP enrollment for children who had employer-based coverage in the past. • The HHS action was not announced in the Federal Register with an opportunity for public comment, as is usual when changes are proposed in federal regulations. State governors say they will challenge the procedure in court, and they have also asked congressional leaders to add language to the pending reauthorization bills negating the administration’s directive. • States are allowed under the SCHIP law as it now stands to set their own income eligibility levels, and both the House and Senate bills leave that policy intact though with minor adjustments. What Does It All Mean? As of August 1 this year, 19 states have SCHIP income eligibility levels at or near 300 percent of poverty, which in most states would be an annual income of approximately $62,000 for a family of four. Those states and several other who are contemplating but have not yet implemented such income eligibility would be unable to expand their SCHIP enrollments under the administration’s proposed rules and might have to roll back children who have been insured for years, according to Cindy Mann, executive director of the Center for Children and Families at Georgetown University in Washington. Robert Greenstein, executive director of the Center on Budget and Policy Priorities estimates that the administration’s directive puts coverage for as many as “several hundred thousand” children at risk. Pennsylvania Governor Edward Rendell, whose state is launching a major effort to insure children, warns that if Congress does not intervene to stop the new directives, the legislation already passed by the House and Senate will be meaningless. “SCHIP will whither on the vine,” he said. Critics of the administration’s new initiative speculate that President Bush’s vow to veto generous new SCHIP legislation may be seen in hindsight to put many Republican members of the House and Senate in an awkward position --either to part company with the President by voting to override the veto or having to explain to constituents when they stand for reelection in 2008 that they voted against health insurance for children. “The new rules may give the administration room to bargain about the final SCHIP bill,” one observer commented. Whatever happens in the next few weeks, it is unlikely that Congress will let SCHIP die when the current law expires September 30. If no agreement has been reached by that time, Congress is expected to resort to a time-honored device for keeping unauthorized programs going—a continuing resolution that funds the program at current levels until a new law is passed. Also see: “SCHIP—The Second-Hottest Item on Congress’ Agenda” |
