CMS Postpones Enforcement of Directive Limiting SCHIP Expansion

The Bush administration has delayed enforcement of a directive that would have limited the ability of states to expand their health insurance programs for children. The move allows states to keep current eligibility standards for their respective programs intact for the time being.

In August 2007, CMS issued a directive requiring states to meet certain standards before they could qualify for enhanced federal matching funds under the State Children's Health Insurance Program, or SCHIP. The directive says states will not receive federal SCHIP funds to insure children whose families have incomes more than 250 percent of the federal poverty level -- that is, at least $53,000 per year for a family of four -- unless they can show that 95 percent of their states' children living in families with incomes below 200 percent of the poverty level -- $42,400 per year for a family of four -- are enrolled in Medicaid or SCHIP.

When issuing the directive last year, CMS gave states until Aug. 18 of this year to comply. But in a recent statement, the agency said it was "not taking compliance action at this time."

"We are determining whether the relevant states are in compliance with the existing requirements," said CMS spokesperson Jeff Nelligan in a prepared statement. "Moreover, we will continue to assist the states in developing policies that will ensure that the most vulnerable, low-income children are covered first, without moving them from private to public coverage."

The directive applies to states that plan to expand or have expanded their SCHIP eligibility requirements beyond 250 percent of the federal poverty level. Forty-four states currently cut off SCHIP eligibility at 200 percent of the federal poverty level or higher; 18 of those states set the cut-off threshold at 250 percent of the federal poverty level or higher.

If enforced, the directive would affect more than 20 states that either have expanded SCHIP eligibility or are contemplating such a move. That's according to First Focus, a bipartisan advocacy organization committed to making children and families a priority in federal policy and budget decisions.

"We would like to see the repeal of this directive," said Christopher Spina, vice president of communications for First Focus, in an interview with AAFP News Now. "The Government Accountability Office and the Congressional Research Service have both indicated that this directive exceeds the scope of the administration's power and is therefore illegal. This is an activity that is solely within the power of Congress."

Even though the Bush administration has delayed enforcement of the directive, and it remains unclear whether the administration will eventually enforce the measure or drop it altogether, the directive has had a chilling effect on states, convincing many to curtail or even forgo plans for SCHIP expansion and, thus, leaving thousands of children without access to the program, Spina said.

"In a lot of ways, the damage already has been done," Spina said.

Meanwhile, a new study (12-page PDF; About PDFs) describes the public health insurance coverage afforded by SCHIP and Medicaid as "a needed lifeline" for millions of children. The Robert Wood Johnson Foundation study, which was based on the CDC's most recent National Center for Health Statistics data, found that insured children are three times more likely than uninsured children to visit a physician's office during the course of a year.

Moreover, three out of four children in public health insurance programs received a well-child checkup during the past year, compared with less than half of all children without insurance, according to the study.

The study also looked at children with chronic health conditions, such as asthma and diabetes, and found that 3.6 million of the 10 million children nationwide with chronic illnesses are enrolled in SCHIP or Medicaid. These children receive health care services at levels similar to those of chronically ill kids with private insurance. Only about 10 percent of children with chronic health care needs who are enrolled in public health insurance programs postpone or skip needed care, compared with 41 percent of uninsured kids with chronic health care needs, the study shows.

In addition, children with chronic conditions who are enrolled in public insurance programs are more likely than uninsured kids to have a personal physician. Only 8 percent of children with chronic conditions who are enrolled in SCHIP or Medicaid nationwide do not have a personal physician, compared with 21 percent of uninsured kids, the study says. Moreover, just 16 percent of kids with special needs do not access mental health services; that compares with 43 percent of uninsured children with such needs who do not access these services.

"This report illustrates the type of access that Medicaid and SCHIP can provide," said Brian Quinn, Ph.D., program officer in the research and evaluation group for the Robert Wood Johnson Foundation. "A lot of times, public programs are maligned, and this report shows that kids who are enrolled in these programs get good access to care."