Late Twists for Kids Health Program

[December 26, 2007]  WASHINGTON (AP) -- The modest spending increase that Congress approved for a popular children's health insurance program will maintain coverage for those already enrolled. But many lacking insurance will have to look elsewhere.

Few expected such a result when 2007 began. Democrats proposed a huge spending increase on the federal-state partnership known as the State Children's Health Insurance Program. Many Republicans embraced the idea. Meanwhile, states all over the country were drawing up plans to expand health coverage.

A lot of those plans have been scuttled. The spending increase most lawmakers supported has been vetoed twice by President Bush, who balked at the $35 billion price tag and method of payment - a tobacco tax.

"We were all very, very hopeful. Now, we feel like they are farther apart than they were a year ago," said Cindi Jones, who oversees Virginia's SCHIP program.

Virginia was one of several states going into the year thinking about expanding eligibility limits for SCHIP. It's a typical state in that it provides health coverage for families with incomes up to twice the federal poverty level - $34,340 for a family of three. Jones said officials considered moving the eligibility limit to at least $42,925.

"This just didn't seem like the right time to raise the eligibility with the uncertainty of what's going on at the federal level," Jones said.

Lawmakers across the state line in West Virginia approved an expansion that would have raised the eligibility level to $51,510 for a family of three. It's now at $37,774. The increase would have led to about 4,000 more children getting coverage.

"That potential growth is on hold," said Sharon L. Carte, who oversees West Virginia's program.

Some analysts say the number of children getting SCHIP coverage may still decline next year - a bitter prospect for Democrats who promised they would expand enrollment from 6 million children to 10 million.

"We are left with a package that addresses the most immediate concerns, but leaves any real health care improvements for another day," Rep. Frank Pallone, D-N.J., said during last week's SCHIP debate. "I think that is very unfortunate."

Republican lawmakers say they want to work out a compromise. But many are satisfied with the extension the House approved Wednesday. Republican leader John Boehner, R-Ohio, said the extension "provides all the resources necessary to cover low-income children who need quality health insurance."

Republicans say any expansion should not allow middle-income families to drop private coverage for the public kind. They insisted that SCHIP retain a new Bush administration directive that makes it harder for states to cover middle-income children. Democrats criticized the directive for months. They promised to rescind it, but failed.

The directive said that before states cover higher-income children, they must meet the following threshold: At least 95 percent of children eligible for Medicaid and SCHIP with incomes less than twice the poverty level must be enrolled in those programs.

Many states say meeting that threshold is nearly impossible. But that's not all the directive said. Even if states meet that threshold, the middle-income children will have to go without private coverage for a full year before they can enroll in SCHIP, and their families will have to pay premiums or co-payments that are 5 percent of their income.

The directive will affect about half the states. Fourteen are already covering children above $42,925 for a family of three and 10 more were planning to do so, says the Center for Children and Families at Georgetown University.

One of those states, California, is considering a proposal that would require all Californians to have health insurance coverage, but a central piece of that proposal also increases the threshold for SCHIP eligibility - from the $42,925 level for a family of three to the $51,510 level.

Cindy Mann, the center's executive director, said she believes the administration's directive means fewer children will get health coverage through SCHIP next year.

"It's definitely a step backward from where we started in 2007," Mann said. "We would have seen growth in the program. We're not going to see that growth, and by August, we'll start to see a ratcheting down."

Overall, about 9.4 million children ages 18 and under are uninsured, according to the Census Bureau.

Bush administration officials say the directive will require states to do the hard work of finding and enrolling poor kids before they move on to less needy families. Health and Human Services Secretary Mike Leavitt said the administration believes the government has a role in providing health coverage to the elderly, poor and disabled.

"The SCHIP question was: Who do we consider to be in that category," Leavitt said.

Lawmakers from both parties say that when they return in January, they will try to work out a compromise on SCHIP. Differences over who should get coverage have clearly narrowed over the past months. But differences over how to pay for expansion remain considerable.

The president has said a tax increase is a deal-breaker. Democrats, meanwhile, say the same thing about cutting Medicaid and Medicare.

"We'll certainly reach out, but it's going to be hard because they do challenge the basic premise that there are these additional kids that need to be covered," Pallone said. "And they don't seem to want to come up with a way to pay for the coverage."

The administration says the president recommended $96 billion in spending reductions in his last budget. Lawmakers can choose from that list.

[Associated Press; By KEVIN FREKING]

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