Bush adds new restrictions to SCHIP

The Bush administration, fighting efforts by states and Congress to expand a popular U.S. health program for children in low-income families, is making it more difficult for families to sign up.

In an Aug. 17 letter to state health officials, the administration imposed new standards that White House spokesman Tony Fratto said today would prevent the State Children's Health Insurance Program, or SCHIP, from becoming "essentially a middle-class entitlement."

The 10-year-old program was designed to provide medical insurance to children whose families earn too much to qualify for Medicaid, the federal-state program for the poor, and can't afford to buy private health coverage. President Bush has threatened to veto bills passed by the House and Senate to expand funding for SCHIP, which now covers 6 million children.

"The ultimate effect of this new policy is that tens of thousands of children who have health insurance will effectively lose that insurance," said Rachel Klein, deputy director of health policy for Families USA, a Washington-based consumer group, in a telephone interview Tuesday.

The new policy sets more restrictive standards for states that want to expand eligibility above 250 percent of the poverty level, which amounts to $51,625 in annual income for a family of four. Eighteen states already provide coverage that exceeds these limits, and at least five other states are seeking approval to do so, Klein said.

The Bush administration does "not expect any effect on current enrollees" as a result of these changes, according to the letter sent to states.

"As states have expanded into higher income levels, we actually are seeing SCHIP become a substitute for private insurance," White House spokesman 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."

States must implement the new policies within 12 months or face "corrective action" from regulators, according to the letter.

"We're appalled," said Claudia Hutton, a spokeswoman for the New York Department of Health. "This looks like the beginning of an effort to dismantle the child health-care program."

New York has been seeking a waiver to increase eligibility to $83,000, or 400 percent of the poverty level.