Letter from Bush administration indicates states have more flexibility to prove they enrolled 95% of currently eligible children in SCHIP

May 8 2008

The Bush administration on Wednesday sent letters to state health officials to clarify a policy directive issued last year that restricts states' ability to expand their SCHIP programs, CQ HealthBeat reports (Carey, CQ HealthBeat, 5/7).

According to guidelines issued in August 2007, before expanding SCHIP eligibility to children in families with incomes greater than 250% of the federal poverty level, states first must demonstrate they have enrolled at least 95% of eligible children with family incomes below 200% of the poverty level (Kaiser Daily Health Policy Report, 4/21).

According to the Wall Street Journal, most states do not meet the requirements, which has meant that several states, including New York and Ohio, have had to abandon their SCHIP expansion plans. The letter sent Wednesday will qualify "many" of the states that did not meet the 95% requirement by using data from the Current Population Survey, Herb Kuhn, deputy administrator and acting director for the Center for Medicaid and State Operations at CMS, said (Zhang, Wall Street Journal, 5/8).

The recent letter says that states can use data on Medicaid, SCHIP or private insurance to demonstrate they had reached the 95% requirement. "This is an achievable, goal and based on conversations with states, we are convinced that a number of states have already reached this goal," Kuhn wrote in the letter.

The letter also clarifies that the guidelines do not apply to children already enrolled in SCHIP. It also says that state health officials can recommend other ways to prevent families from substituting SCHIP coverage for private insurance, CQ HealthBeat reports (CQ HealthBeat, 5/7). The guidelines currently say that states seeking to expand SCHIP eligibility must establish a minimum of a one-year period of uninsurance for individuals in families with incomes greater than 250% of the poverty level (Kaiser Daily Health Policy Report, 4/21).

Reaction

It is not clear how the clarified guidelines will affect states, the Journal reports. Cindy Mann, executive director of the Georgetown University Center for Children and Families, said, "We still don't have any clear, transparent guidelines as to what data will be available or what data will be sufficient." She noted that the Bush administration has already used the guidelines to reject state SCHIP expansion proposals (Wall Street Journal, 5/8).

According to an aide to Senate Finance Committee Chair Max Baucus (D-Mont.), "it is immediately clear that the letter does not seek to reverse the Aug. 17 directive, as requested by Chairman Baucus," adding, "The directive was issued in violation of the Congressional Review Act" (CQ HealthBeat, 5/7).

According to a Government Accountability Office legal opinion released last month, the guidelines did not follow the process of the Congressional Review Act, which establishes the formal rule-making process that includes submission to Congress and a public review period. As a result, the directive is invalid, GAO said (Kaiser Daily Health Policy Report, 4/21).