At Least Nine of 17 States With SCHIP Income Eligibility Thresholds Above 250% of Federal Poverty Level Will Meet Federal Enrollment Guidelines for Expanding Coverage, CMS Says

At least nine states will meet federal SCHIP enrollment guidelines that will allow them to offer coverage to children in families with incomes greater than 250% of the federal poverty level, CMS Center for Medicaid and State Operations Director Dennis Smith said Wednesday in testimony before the Senate Finance Subcommittee on Health Care, CongressDaily reports (Johnson, CongressDaily, 4/10). The Bush administration in a letter to state lawmakers on Aug. 17, 2007, outlined new standards for SCHIP enrollment. The new guidelines state that before expanding SCHIP eligibility to children in families with incomes greater than 250% of the poverty level, states must demonstrate that they have "enrolled at least 95% of children in the state below 200% of the federal poverty level" who are eligible for Medicaid or SCHIP (Kaiser Daily Health Policy Report, 8/21/07).

According to Smith, 17 states have SCHIP income thresholds above 250% of the poverty level. He said, "That's who this applies to. We have been talking to the states, and we believe at least nine, again at this point, because we haven't been everywhere, are going to meet the 95%." Smith did not comment on the other eight states, saying only that their data are being reviewed (CongressDaily, 4/10).

Subcommittee Chair John Rockefeller (D-W.Va.) said the 95% requirement was not possible to meet, noting that a number of outreach programs have failed to reach that goal. He also said that CMS does not have the legal authority to limit enrollment at 250% of the poverty level or to require that states fund coverage of beneficiaries with incomes above that level. Rockefeller has introduced legislation (S 2819) that would place a moratorium on implementation of the rules. Senate Finance Committee Chair Max Baucus (D-Mont.) said the directive "goes in the wrong direction. It restricts coverage when we should insure as many kids as possible."

Smith said that the rules were meant to prevent "crowd out," or the substitution of public health care for private coverage. Finance Committee ranking member Chuck Grassley (R-Iowa) said the rules were "laudable" because "states should be covering their lowest-income kids first." Sen. Orrin Hatch (R-Utah) said, "Congress should do everything possible to discourage crowd out."

Congressional Budget Office Director Peter Orszag said the policy directive would not have a significant impact on SCHIP enrollment "given the way the administration appears to be implementing it, and more important, given the funding levels assumed in this baseline" (Carey, CQ HealthBeat, 4/9). According to Orszag, 5% of SCHIP beneficiaries are in families with incomes greater than 250% of the poverty level (CongressDaily, 4/10).

CBO testimony from the hearing is available online.

NPR's "Morning Edition" on Thursday reported on the hearing. The segment includes comments from Rockefeller, Smith, Orszag and a parent who testified at the hearing (Rovner, "Morning Edition," NPR, 4/10). Audio of the segment is available online.