The Bush administration sent a letter Friday to state health officials saying they must show they have enrolled 95 percent of the eligible children within the 200 percent federal poverty level before adding those at higher income levels to the State Children's Health Insurance Program, the New York Times reported.
Dennis Smith, director of the Center for Medicaid and State Operations that operates the program, said in the letter such a move would actually ensure that the goal of insuring the most at-risk children would be met before expanding the program.
"We would not expect any effect on current enrollees from this review strategy," Smith wrote. He added that this focus on "the core uninsured targeted low-income population" will strengthen the program.
A number of states, including California, New York and Pennsylvania, either want to or have increased the number of children eligible for state-provided health insurance beyond those within the poverty line. California, for example, wants to allow families with income levels at 300 percent of the poverty level to enroll their children in the program.
While the poverty level for a family of four is set by the federal government at $20,650 in annual income, some states have doubled that amount. In New York, the level is set at 250 percent, and the legislature passed a bill extending it to 400 percent, according to the New York Times.
Congress is considering legislation to increase funding for the program by $35 billion or $50 billion over five years. President Bush, however, has proposed an increase of $5 billion over five years to the current $25 billion funding level in order to ensure that the program does not become a substitute for private coverage, he has said.
Bush administration officials said they imposed the change because state and possible congressional action would fundamentally alter what the SHIP program was established to do.
"As states have expanded into higher income levels, we actually are seeing SCHIP become a substitute for private insurance," White House spokesman Tony Fratto said. "States are looking to vastly expand eligibility for SCHIP at a time when no states are making adequate progress in enrolling the target populations, which are families with children at, or below, 200 percent of the poverty line."
The move drew fire from Senate Finance Committee Chairman Max Baucus, D-Mont., who said, "This drastic change in policy sets states up to fail and jeopardizes coverage for tens of thousands of children in low-income, working families."
House Democrats also blasted the president's decision.
"States want to get these kids enrolled, and they will get them enrolled," said Democratic Caucus Chairman Rahm Emanuel, D-Ill., who helped create the program as a staff member in the Clinton administration. "I think states will see the letter for what it is, and that's a political ploy by the president. This is a political attempt by the administration to try to intimidate states."