The CMS has outlined a series of conditions that states must meet in order to expand the State Childrens Health Insurance Program to higher-income populations. For example, states must certify they are already covering 95% of eligible children from families with incomes below 200% of the federal poverty level, or $41,300 for a family of four, under SCHIP or Medicaid.
The new Bush administration policy, sent out as a letter from the CMS to state officials, also says states cannot cover children in families with incomes above 250% of the poverty level if the states have experienced a decline in employer-sponsored insurance coverage of more than 2% among those families over the past five years.
This is to prevent states from adopting so-called crowd out strategies that involve substituting SCHIP for other health coverage programs, such as employer-sponsored coverage. It has become clear that the potential for crowd out is great for higher income beneficiaries, the letter stated.
But according to Kathleen Stoll, director of health policy for Families USA, this will effectively establish a new income limit for SCHIP at 250% of poverty, undermining states authority to tailor their own programs. Under current law, states can decide for themselves what the income limit for SCHIP should be, she said.
The House and Senate expect to resume negotiations on their respective SCHIP reauthorization bills after the summer recess. Both call for more money and additional expansions to the program than what the Bush administration wants. President Bush has threatened to veto the legislation. -- by Jennifer Lubell
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