Bush Administration Imposing Restrictions On States' Abilities To Expand Medicaid Eligibility

Main Category: Medicare / Medicaid / SCHIP
Article Date: 07 Jan 2008 - 9:00 PDT

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

The Bush administration in a letter to state officials on Aug. 17, 2007, outlined new standards for SCHIP enrollment that aim to limit coverage to the lowest-income children. The guidelines state that before expanding SCHIP eligibility to children in families with incomes greater than 250% of the federal poverty level, states must demonstrate that they have "enrolled at least 95% of children in the state below 200% of the federal poverty level" who are eligible for Medicaid or SCHIP, according to the letter sent by Dennis Smith, director of the Center for Medicaid and State Operations (Kaiser Daily Health Policy Report, 8/21/07).

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

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

States
According to the Times, some state officials criticized the policy and the way it was adopted. Mike Fogarty, CEO of the Oklahoma Health Care Authority, said, "The Aug. 17 letter is [an SCHIP] policy. But it's being applied in a much broader way. We are seeing many more roadblocks." The Oklahoma Legislature in May 2007 voted to expand Medicaid eligibility to 42,000 children in families with incomes up to 300% of the poverty level. However, Fogarty said, "In recent weeks, we got a very clear signal from federal officials that we would not be allowed to go beyond 250% of the poverty level."

Louisiana lawmakers in June 2007 approved legislation to increase SCHIP income eligibility limits from 200% of the poverty level to 300%. However, J. Ruth Kennedy, deputy director of the state's Medicaid program, said the state has had to "change course" after the August letter from the Bush administration. "We found that we have much less flexibility to make changes in Medicaid than we thought," Kennedy said (New York Times, 1/4).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.