GAO, Congressional Research Service Say Bush Administration Improperly Issued Directive That Limits States’ Abilities To Expand SCHIPs

The Bush administration improperly issued a policy directive last year that restricts states' abilities to expand their SCHIP programs, the Government Accountability Office and the Congressional Research Service said on Thursday during a House Energy and Commerce Health Subcommittee hearing, CQ Today reports. The Aug. 17, 2007, policy directive requires states to enroll 95% of children in families with incomes up to 200% of the federal poverty level before expanding coverage to children in families with incomes greater than 250% of the poverty level. During the hearing, Morton Rosenberg, a legal specialist for CRS, and Dayna Shah, managing associate general counsel for GAO, said the directive amounted to a regulation and should have been vetted in Congress using the same process as other administrative rules, according to CQ Today.

The opinions from GAO and CRS "lend weight to Democrats' efforts to nullify the directive, something they have promised to do since it was issued," according to CQ Today. Subcommittee Chair Frank Pallone (D-N.J.) is sponsoring legislation (HR 5998) that would reverse the directive. He said, "The Aug. 17 directive would impose strict new requirements on states and beneficiaries that are not only impossible to achieve but make little, if any, sense." However, according to CQ Today, "Many Republicans support the principle behind the [directive], so Pallone's bill stands little chance of passing the Senate, where it could be filibustered."

States have argued that meeting the enrollment requirement is impossible, and several states have filed lawsuits against the federal government to block the directive. The Bush administration says the directive is aimed at preventing families from dropping private health coverage to enroll in SCHIP.

During the hearing, Rosenberg said a disproval resolution probably could still be passed by Congress to nullify the directive. Unlike stand-alone bills, disapproval resolutions cannot be filibustered in the Senate. Pallone said he would prefer to pass his bill because it also would require CMS to reconsider a request from New York state to expand its SCHIP, which the agency previously denied. According to a House Democratic aide, CMS officials were invited to testify at Thursday's hearing but said they would only do so if the hearing were held behind closed doors. CMS spokesperson Jeff Nelligan said he was unaware that the agency had been invited to testify (Wayne, CQ Today, 5/15).

The GAO opinion is available online.