Bush Blocks SCHIP - States and Congressional Leaders Vow to Fight Back

President Bush has chosen political ideology and the corporate health insurance industry over the health and well-being of America's most needy and vulnerable people, our children. In a stealth and cowardly move to avoid the news cycle, at 7:30 PM last Friday [8]the Bush Administration sent states new restrictions for the State Children's Health Insurance Program (SCHIP) [9]; restrictions that will decimate state efforts to ensure children have access to health care. States [10]and Congressional leaders [11]are vowing to fight the changes. 

New SCHIP Restrictions

Under Bush's unilateral decree, any state that has already expanded or plans to expand SCHIP beyond 250% of the poverty level, a meager $51,625 for a family of four, will have to meet new guidelines that SCHIP experts and the non-partisan Congressional Budget Office say are impossible to meet. States must:

• show they've enrolled 95% of children below 200% of poverty who are eligible for either Medicaid or SCHIP,

• charge premiums that approximate private coverage and impose a one-year waiting period, during which children are uninsured, in order to prevent children from leaving private coverage, and

• show that children's coverage by the private market has not decreased by more than 2% over the past five years.

At least 19 states [12]and the District of Columbia have already set eligibility at 250% or above, many of which did so just this year. They are: California, Connecticut, Hawaii, Indiana, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, New Hamsphire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, Vermont, Washington. These states will have 12-months to comply with the new restrictions in order to maintain eligibility levels above 250%.  However, as reported, this will be virtually impossible to do, resulting in budget shortfalls or more uninsured children. New York [13], which recently expanded SCHIP to 400% of poverty, would have to find an additional $41 million next year to maintain eligibility and offset reduced federal funding as a result of these rules. 

Analysis of Restrictions

The one-year uninsured waiting period is purely punitive and harms children, who are susceptible to illness at young ages [14] and need timely access to immunizations and booster shots. Going without needed care jeopardizes a child's preparedness for school and their growth. The 95% enrollment requirement is nothing short of a brick wall impeding state efforts to respond to the needs of their residents. According to [8] SCHIP experts at Georgetown University, the CBO and Sen. Max Baucus, no state has achieved this level of enrollment. In fact, the nationwide enrollment rate [15] among eligible children in '04-'05 was 72%. This is not an indication that states are neglecting their responsibilities. Rather, states have taken unprecedented steps to notify families and enroll eligible children through simplified enrollment steps, advertising campaigns, and direct person-to-person outreach. 

Making matters worse, under the President's budget proposal no state would achieve 95% enrollment. The CBO reports the President's budget proposal for SCHIP - $30 billion for the next five years - is not enough to pay for current enrollment, about 6 million uninsured children nationwide, let alone those eligible but not enrolled. If states do not comply with these new restrictions, the Bush Administration has said that the federal government "may pursue corrective action?"  Really, like what?

States and Congressional Leaders to Fight New Resrictions - Public is on Their Side

We have repeatedly reported [16] this year how states are leading on health care reform while DC gets caught up in ideological battles. Children's health care has seen the most advancement [17] in 2007. All of this could be forsaken if Congress fails to reauthorize SCHIP at levels vastly exceeding the President's proposals and if it fails to roll back these draconian new guidelines. Fortunately, as we reported last month [18], both the House [19]and Senate [20] have proposed SCHIP budgets of $75 billion and $60 billion respectively. The Senate bill passed with a 68-31 veto-proof majority. Democrats and Republicans in Congress must come together on a veto-proof reauthorization package that supports state expansions of health care.

States [10] and Congressional leaders [11] are vowing to fight the new restrictions and should put up a very public fight. Besides being the right thing to do, the public is on their side. A February 2007 CBS/New York TImes poll found 84% of Americans support expanding SCHIP [21] to cover all uninsured children. The same poll found only 24% support President Bush's handling of health insurance issues.

Bush's True Colors Shine Through

Bush's public reason for these new draconian rules is to address "crowd-out," which is when privately insured people move to public coverage, and to prevent SCHIP from becoming a substitute for private insurance. But the Emperor has no clothes. According to Jonathan Gruber of MIT, a health care finance expert who is repeatedly cited by the Bush Administration, 77% of the benefits under the President's health care reform proposals, which include tax deductions and credits to finance private insurance, would go to people who are already insured [22]. In stark contrast, the Congressional Budget Office found that only 34% of children [23] receiving coverage under the Senate's SCHIP bill, for instance, would otherwise have private coverage. This, if there ever was one, is an instance of "throwing the baby out with the bath water."

Aside from being heartless, wrong-headed, and ignorant to the real-world financial realities of American families and the failure of the private insurance market to offer affordable health insurance, the Bush Administration's position on SCHIP is purely based on political ideology. Bush is trying to prevent universal health care in the U.S. and what the right-wing Wall Street Journal [24] editorial staff say is "health care on the installment plan." As the Governor of Oregon [17] said, referring to his proposal to cover all kids, "If you drive the plan into the middle class, it's not just viewed as a public assistance program. You build a base of support for the program to provide health care for all of us."

Political considerations aside, President Bush needs to get his head out of the line-in-the-sand he has drawn between himself and the states [25] and Congress over SCHIP. The obvious reality to the 64% of Americans who believe the government should guarantee health care for all [21], according to that same February CBS/NYT poll, is that we need to expand access to health care rather than revoke it. But as President Bush has repeatedly shown, evidence and opinions that run counter to his positions will not suade him. In this and many instances throughout his presidency, steadfastness is a poor excuse for stupidity.

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