Bush Administration Rejects New York Plan To Expand SCHIP; Gov. Spitzer Threatens To Sue Unless Decision Is Reversed

Main Category: Medicare / Medicaid / SCHIP
Article Date: 12 Sep 2007 - 3:00 PDT

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CMS on Friday denied New York's request to expand SCHIP coverage to children in families with incomes up to 400% of the federal poverty level, which would have provided health coverage to an additional 70,000 children in the state, the New York Times reports (Pear, New York Times, 9/8). The decision "sent a clear signal" that the administration will enforce new rules that limit SCHIP enrollment to the lowest-income children, according to the Times. The decision is the first time that the rules have been applied (Alonso-Zaldivar, Los Angeles Times, 9/8).

The administration's decision on New York, announced in a letter from acting CMS Administrator Kerry Weems, said that the state "has failed to provide assurances that the state has enrolled at least 95% of the children in the core targeted low-income child population," as required under the new rules (Evans, Long Island Newsday, 9/8). New York officials have said that state covers 88% of children in families with incomes below 200% of the poverty level who are eligible for Medicaid or SCHIP (New York Times, 9/8). CMS also said that the state "has not demonstrated that its program operates in an effective and efficient manner with respect to the core population of targeted low-income children" (Johnson, CongressDaily, 9/7).

The Bush administration maintains that expanding SCHIP would encourage people to switch from private insurance coverage to the public program (Long Island Newsday, 9/8). The state had requested a six-month period of uninsurance to deter residents from dropping private coverage. However, Weems wrote, "I cannot find that New York meets the requirement for reasonable procedures to prevent substitution of coverage" (AP/Boston Herald, 9/7).

Eligibility for the program in New York currently is set at 250% of the poverty level. The state has 60 days to ask CMS to reconsider its decision (Wayne, CQ Today, 9/7).

Response
New York Gov. Eliot Spitzer (D) said that the decision is a "cruel blow to New York's uninsured children and to uninsured families across the country." Spitzer said the state is preparing a lawsuit to contest the new guidelines, which claims that the rules violate the intent of SCHIP, as created in 1997, and that policy was adopted without the required period for public notice and comment (New York Times, 9/8).

House Ways and Means Committee Chair Charles Rangel (D-N.Y.) said the administration's decision is "unconscionable," adding that New York has "made every effort to increase the number of children with health care, starting with the lowest-income families" (CongressDaily, 9/7). Rangel said, "It is clear the administration is spoiling for a fight, and it's unfortunate (President Bush) has chosen children's health care" (Los Angeles Times, 9/8). He added, "We have a moral imperative to work to overturn this arbitrary and mean-spirited policy."

House Energy and Commerce Committee Chair John Dingell (D-Mich.) said that he was "saddened to see the administration taking another step that would deny affordable coverage to the most vulnerable among us" (New York Times, 9/8).

CMS spokesperson Jeff Nelligan defended the letter, saying the agency is "confident that we have the legal authority and acted appropriately in using it" (CQ Today, 9/7).

Senate Finance Committee ranking member Chuck Grassley (R-Iowa) said, "I'm glad the administration has used its authority to enforce coverage levels in keeping with congressional intent. We don't have unlimited funds. Setting limits keeps the program going for the children who need it" (CongressDaily, 9/7).

SCHIP Progress
In related news, talks to reach a compromise on SCHIP legislation "have stalled over a dispute on whether to pay for the program with cuts to Medicare," the Washington Times reports. Grassley said, "The House bill is more expensive by billions of dollars and contains cuts to Medicare Advantage -- both of those items are poison pills for some Senate Republicans."

However, House Democrats said they have little incentive to compromise because House Republicans have not said that they would support a bill that does not include MA plan cuts. "This is a complete red herring for House Republicans to talk about wanting Medicare cuts taken out of the bill," a House Democratic aide said.

Even without the cuts to MA plans, the bill still faces a veto threat from Bush. White House spokesperson Tony Fratto said that removing the MA provision "would remove one flaw, but there are lots of others" (Lengell, Washington Times, 9/10).

Lawmakers are not yet considering a short-term extension of the program, according to Rangel. He added, "There are some major differences, but the choices are expiration of the childcare bill, not putting anything on the president's desk -- that would be a total embarrassment for the House and the Senate -- or the Senate and the House making major adjustments for Medicare reform and SCHIP" (Johnson, CongressDaily, 9/7).

Editorial
The rejection of New York's application to expand SCHIP "shows the White House at its most ideological and intransigent," according to a New York Times editorial. The editorial continues, New York "probably should" petition for CMS to reconsider its decision, although the "likelihood that the administration might change its mind is vanishingly small."

States officials "should also consider a legal challenge," the New York Times states. According to the editorial, "The best guarantee of success -- and protection for America's children -- would be for Congress to block implementation of the White House's arbitrary and destructive new requirements, perhaps in SCHIP reauthorization bills that are now before a conference committee," concluding that if that "can't be done by a veto-proof margin, voters will have to elect more legislators committed to solving the health care crisis afflicting middle-class families" (New York Times, 9/8).

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