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New Jersey Fights Bush Over S-CHIP Cutbacks

September 17, 2007

In August, the Bush administration fired a shot across the bow of those advocating the expansion of the State Children's Health Insurance Program (S-CHIP). Last week, New Jersey Governor John Corzine fired back.
First, a little background. Last month, the House and Senate overwhelmingly passed separate packages adding an additional 3.3 million children to the 6.6 million already insured under the program covering low income families. The White House, hoping to block the expansion of the popular S-CHIP program, retaliated by issuing draconian new regulations designed to cap limit benefits to families below 200% of the poverty line. As I wrote on August 23rd:

With Congress out of session, Dennis Smith of the federal Center for Medicaid and State Operations notified states that they must reach 95% enrollment of families below 200% of the poverty level before they can expand their programs. Of course, no state currently approach the 95% figure today (nationally, almost 30% of eligible children remain unenrolled in S-CHIP). Worse still, several states previously received the federal government's OK to extend their coverage to even higher income levels and more are considering further expansion still.
In New York, which covers children up to 250 percent of the poverty level, the Legislature has passed a bill that would raise the limit to 400 percent - $82,600 for a family of four - but the change is subject to federal approval.
California wants to increase its income limit to 300 percent of the poverty level, from 250 percent. Pennsylvania recently raised its limit to 300 percent, from 200 percent. New Jersey has had a limit of 350 percent for more than five years.
It's no wonder incredulous state health care officials are horrified by the Bush administration's new regulations. Ann Clemency Kohler, deputy commissioner of human services in New Jersey, said "It will cause havoc with our program and could jeopardize coverage for thousands of children."

On Friday, New Jersey Governor John Corzine responded, telling President Bush that the Garden State will not obey the new federal rules. Calling the Bush regulations "onerous," Corzine insisted the state would act to add 10,000 more children to the 122,000 covered by its FamilyCare program:

"I am deeply concerned about the devastating impact that this misguided policy will have on our efforts to address the growing problem of the uninsured."

While Corzine made it clear that his state is prepared to sue to halt the new administration rules, White House spokesman Tony Fratto made it clear that New Jersey is on it own:

"New Jersey is free to use its own funds to cover children who are not eligible under the federal guidelines. It's premature to say what CMS would do if they are not in compliance."

In the growing battle over S-CHIP, New Jersey's Corzine does not stand alone. On August 30th, California Republican Governor Arnold Schwarzenegger and New York Democratic Governor Eliot Spitzer jointly sent a letter to Bush decrying the new rules. "It is bad policy," Spitzer wrote, adding, "It is a violation of the basic decency that argues in favor of giving kids health insurance." On Sunday, Maryland Governor Martin O'Malley followed suit, telling Bush that his harsh approach will slash 3,700 children from his state's program.
While his administration and the states are at loggerheads over children's health coverage, President Bush has his own solution. As he told an audience in Cleveland:

"I mean, people have access to health care in America. After all, you just go to an emergency room."

For more background on George W. Bush's war on S-CHIP, see:

UPDATE: With fiscal funding for S-CHIP due to expire at the end of the month, the New York Times reports that Senate and House negotiators are poised to send President Bush a compromise bill extending coverage to 4 million more children. The White House's Fratto insists the veto threat remains, declaring, "the House and the Senate still appear to be far away from legislation that we would find acceptable."


Jon Perr
Jon Perr is a technology marketing consultant and product strategist who writes about American politics and public policy.

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