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Bush Administration Further Restricts Children's Access to Health Coverage

Last year, the government released new data showing that more than one million children had joined the ranks of the uninsured over the past two years alone, bringing the total number of uninsured children in America to 9.4 million, or one out of every eight children. But rather than address the growing problems of rising health coverage costs, shrinking employer coverage, and the increasing number of uninsured children, the Bush Administration is focusing its efforts on tightening access to health coverage programs — exactly the wrong priority.

Last Year the Bush Administration Battled Congress Over Children's Health Coverage

Throughout 2007, Congress and the Bush Administration battled over the reauthorization of the State Children's Health Insurance Program (SCHIP), which provides health coverage to more than six million children. Despite strong public support for covering more children, President Bush twice vetoed legislation that would have extended health coverage to more than three million uninsured children.

Congress failed to override the vetoes and ultimately passed a short-term extension of the SCHIP program that neither expanded coverage to some of the 9.4 million uninsured children nor made the policy changes needed to ensure that eligible, uninsured children get enrolled and stay enrolled in health coverage.

Now the Bush Administration Is Bypassing Congress to Further Limit Children's Access to Health Coverage
Now the Bush Administration is bypassing Congress altogether by making sweeping changes to Medicaid rules that will severely limit states' ability to expand coverage to uninsured children. (These changes are in the form of eight problematic new regulations issued so far, and a policy directive.) Fortunately, there is still time for Congress to stop these harmful new regulations.

Take action now! Tell Congress to pass legislation to stop the Bush Administration from further limiting children's access to health coverage.

Bush Administration Regulations to Change Medicaid

The Bush Administration is using a backdoor strategy to dramatically reduce children’s access to needed health services by unilaterally adopting new federal rules without Congressional approval. In recent months, Bush Administration officials at an agency called the Centers for Medicare and Medicaid Services (CMS) have issued new regulations that will force states to make significant changes to their Medicaid programs. These programs provide critical health services to millions of children, including low-income children, disabled children, children with special health needs, and foster youth.

The regulations will shift roughly $15 billion in costs from the federal government to states, according to estimates reported February 22. The regulations restrict how Medicaid pays for hospital services, services for individuals with disabilities, and case management services.

" Without your action, states will be forced to make choices that are more than just unpleasant, but wasteful, costly, impractical and ultimately harmful to our common interests in good personal and economic health." - The Honorable Deval L. Patrick, Governor of Massachusetts 2/26/08

One of the regulations would eliminate the ability of schools to provide administrative services, such as enrollment, eligibility counseling, and referrals, for children who qualify for Medicaid. To extend appropriate health and mental health care to children, it is essential to go to where children are and there is no more universal service offered to children than education! 

The Bush Administration should be expanding rather than severely limiting the ability of school personnel to assist with important outreach, enrollment, and treatment tracking activities.  (Read the comments CDF submitted to the Centers for Medicare & Medicaid Services (CMS) in response to this regulation.)

Congress Can Stop the President's Attempt to Make Sweeping Changes
The Bush Administration's backdoor approach of making sweeping policy changes solely through regulation is one of the biggest challenges faced by children's advocates this year, and stopping the implementation of these regulations must be a high priority for this Congress. The first regulation already went into effect in March, and without Congressional action, many more will go into effect in the next few months, putting the health and well-being of our nation's most vulnerable children in serious jeopardy.

Our nation's most vulnerable children need your help!
The Children's Defense Fund calls on Congress to take immediate action to prevent implementation of all these regulatory policy changes, and to remain vigilant for other regulatory changes that the Administration is expected to release before President Bush leaves office. Contact your Member of Congress today and tell them to put a stop to these harmful Medicaid regulations.

Bush Administration Policy Directive to Deny Health Coverage to Uninsured Children

In August 2007, Bush Administration officials circumvented Congress and used an administrative procedure called a directive that they thought they could use to unilaterally changed the rules for the State Children’s Health Insurance Program (SCHIP). Under the directive they issued, states must meet strict new standards before they can get federal funding to provide SCHIP health coverage to children with family incomes above 250% of the federal poverty level ($53,000 for a family of four). These requirements would be nearly impossible for states to meet.

Subsequently, and again without an official announcement, Congressional approval, a comment period, or any warning, in December 2007, the Bush Administration began applying these harsh new rules to Medicaid as well, fundamentally altering the scope of the program. This policy change took states by surprise. In fact, the first time this new policy was publicly articulated was through CMS' rejection of several proposed state Medicaid expansions in December 2007.

The Bush Administration’s backdoor Directive has, however, been declared unenforceable by the Government Accountability Office (GAO) and Congressional Research Services (CRS). On April 18, the GAO issued a report that said the directive “amounts to a marked departure” from a longstanding interpretation of federal law. It is therefore a rule (not a directive) and, under 1996 law, rules must be submitted to Congress for review before they can take effect. Since this rule did not undergo Congressional review, the GAO opinion argues that it is invalid. While this is an important victory for the states, the GAO opinion does not have a binding legal effect. Thus, the Bush Administration has said it will not change its position and the directive will still go into effect in August 2008. Read the story "President is Rebuffed on Program for Children" in the New York Times.

Senators Jay Rockefeller (D-WV), Edward Kennedy (D-MA), and Olympia Snowe (R-ME) have introduced legislation (S.2819) that would delay the Directive until August 2009, as well as eight of the harmful Medicaid regulations. This legislation would also provide $12 billion in temporary financial relief to the states to assist them in providing necessary services during the economic downturn ($6 billion would be in additional Medicaid assistance). On April 9, a week after the legislation was introduced, the Senate Finance Committee held a hearing to discuss the directive.

Rockefeller, in his opening statement, explained the impact of the President's agenda: "With the stroke of a pen, and for less than $100 in postage -- the Administration has unleashed a tidal wave of financial uncertainty that will be measured in the loss of billions of dollars in state-aid, and hundreds of thousands of children being denied access to health insurance." The testimony of the six witnesses is online, including the emotional story of Paula Novak of Lebanon, Ohio -- a mother of three children, the youngest of whom has Down Syndrome, who are uninsured because of the Directive.

President Bush's Budget Goes Even Further to Limit Health Coverage

As currently stated, the Directive limits coverage to families under 250 percent of the poverty level. However, President Bush has made it clear that he wants to further restrict funds for SCHIP and Medicaid. The President's budget for fiscal year 2009 -- released in February 2008 -- assumes implementation of the August directive to Medicaid and SCHIP and further lowers the income eligibility threshold of both programs to 200% of the federal poverty level ($42,400 for a family of four).

"The Center on Medicare and Medicaid Services' August 17 directive is a blatant attempt to thwart the will of Congress and its apparent extension to Medicaid is without any basis in law. The result in Ohio is that 20,000 uninsured children with family incomes between 200 and 300 percent of the federal poverty level remain uninsured." - The Honorable Ted Strickland, Governor of Ohio 2/26/08

Twenty-six states currently provide or plan to provide Medicaid or SCHIP coverage to children above 200% of the federal poverty level. If the changes in the President's budget go into effect, millions of currently insured children will be at risk of losing coverage, and states seeking to expand coverage will be unable to do so.

States Start to Adhere to Damaging Bush Administration Restrictions
Some states have already taken steps to comply with the Bush Administration's damaging regulations and directives. These actions could not come at a worse time, tearing bigger holes in the health care safety net during an economic downturn, when more families are starting to turn to states for critical services. These actions by the Bush Administration will only serve to shift more costs to states, most likely requiring them to make drastic cuts to critical health services for children, among others.

The New Requirements in the Bush Administration's August 2007 Directive

In order to receive federal funds, states must meet these requirements:

• 95% of all eligible children under 200% of the federal poverty level ($42,400 for a family of four) in a state must have health coverage before a state could expand eligibility to children in families with incomes above 200% of the federal poverty level.
  This standard is virtually impossible to achieve. Current estimates for SCHIP and Medicaid participation rates range from 63% to 79% depending on the state.
• States must certify that coverage levels under employer-sponsored health insurance have not fallen by more than 2 percentage points over the previous two years.
  States have virtually no control over rates of employer-sponsored insurance for families and dependents. Employer-sponsored health insurance has been declining sharply for Americans at all income levels and for all ages, including children -- for example, the percentage of children (from birth to 17) covered by employer-sponsored health insurance dropped to 59.7% in 2006—down from 65.2% in 1999.

States that somehow met the above conditions would also be required to make additional changes to limit enrollment in SCHIP:

• Without exceptions, children would have to be uninsured for a full 12 months before enrolling in SCHIP, even in the case of parental loss of employment or death.
• States must impose premiums and co-payments that are much higher than what the majority of states currently require families to pay.

Take action now! Tell Congress to pass legislation to stop the Bush Administration from further limiting children's access to health coverage.

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