Bush Sinks the SCHIP


President Bush has chosen political ideology and the corporate health insurance industry over the health and well-being of America’s most needy and vulnerable people, our children.

In a stealthy and cowardly move to avoid the news cycle, at 7:30 PM last Friday the Bush Administration sent states new restrictions for the State Children’s Health Insurance Program (SCHIP); restrictions that will decimate state efforts to ensure children have access to health care.

States and Congressional leaders are vowing to fight the changes.
New SCHIP Restrictions

Under Bush’s unilateral decree, any state that has already expanded or plans to expand SCHIP beyond 250% of the poverty level, $51,625 for a family of four, will have to meet new guidelines that SCHIP experts and the non-partisan Congressional Budget Office say are impossible to meet.

States must:

  • show they’ve enrolled 95% of children below 200% of poverty who are eligible for either Medicaid or SCHIP,
  • charge premiums that approximate private coverage and impose a one-year waiting period, during which children are uninsured, in order to prevent children from leaving private coverage, and
  • show that children’s coverage by the private market has not decreased by more than 2% over the past five years.

At least 19 states and the District of Columbia have already set eligibility at 250% or above, many of which did so just this year. They are: California, Connecticut, Hawaii, Indiana, Louisiana, Maryland, Massachusetts, Minnesota, Missouri, New Hamsphire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, Vermont, Washington.

These states will have 12-months to comply with the new restrictions in order to maintain eligibility levels above 250%.  However, as reported, this will be virtually impossible to do, resulting in budget shortfalls or more uninsured children.

New York, which recently expanded SCHIP to 400% of poverty, would have to find an additional $41 million next year to maintain eligibility and offset reduced federal funding as a result of these rules.

The one-year uninsured waiting period is purely punitive and harms children, who are susceptible to illness at young ages and need timely access to immunizations and booster shots. Going without needed care jeopardizes a child’s preparedness for school and their growth. This waiting period parallels the purpose of the 6 month "bare period" required to join Arizona’s Healthcare Group for small business; to prevent people who need it from being able to obtain it.

The 95% enrollment requirement is nothing short of a brick wall impeding state efforts to respond to the needs of their residents. According to SCHIP experts at Georgetown University, the CBO and Sen. Max Baucus, no state has achieved this level of enrollment. In fact, the nationwide enrollment rate among eligible children in ’04-’05 was 72%. This is not an indication that states are neglecting their responsibilities. Rather, states have taken unprecedented steps to notify families and enroll eligible children through simplified enrollment steps, advertising campaigns, and direct person-to-person outreach.

Making matters worse, under the President’s budget proposal no state would achieve 95% enrollment. The CBO reports the President’s budget proposal for SCHIP – $30 billion for the next five years – is not enough to pay for current enrollment, about 6 million uninsured children nationwide, let alone those eligible but not enrolled.

If states do not comply with these new restrictions, the Bush Administration has said that the federal government "may pursue corrective action."  Really, like what?

Children’s health care has seen the most advancement in 2007. All of this could be forsaken if Congress fails to reauthorize SCHIP at levels vastly exceeding the President’s proposals and if it fails to roll back these draconian new guidelines.

Fortunately, both the House and Senate have proposed SCHIP budgets of $75 billion and $60 billion respectively. The Senate bill passed with a 68-31 veto-proof majority. Democrats and Republicans in Congress must come together on a veto-proof reauthorization package that supports state expansions of health care.

States and Congressional leaders are vowing to fight the new restrictions and should put up a very public fight. Besides being the right thing to do, the public is on their side. A February 2007 CBS/New York TImes poll found 84% of Americans support expanding SCHIP to cover all uninsured children. The same poll found only 24% support President Bush’s handling of health insurance issues.

Bush’s public reason for these new draconian rules is to address "crowd-out," which is when privately insured people move to public coverage, and to prevent SCHIP from becoming a substitute for private insurance. But the Emperor has no clothes.

According to Jonathan Gruber of MIT, a health care finance expert who is repeatedly cited by the Bush Administration, 77% of the benefits under the President’s health care reform proposals, which include tax deductions and credits to finance private insurance, would go to people who are already insured. In stark contrast, the Congressional Budget Office found that only 34% of children receiving coverage under the Senate’s SCHIP bill, for instance, would otherwise have private coverage.

This, if there ever was one, is an instance of "throwing the baby out with the bath water."

Aside from being heartless, wrong-headed, and ignorant to the real-world financial realities of American families and the failure of the private insurance market to offer affordable health insurance, the Bush Administration’s position on SCHIP is purely based on political ideology. Bush is trying to prevent universal health care in the U.S. and what the right-wing Wall Street Journal editorial staff say is "health care on the installment plan."

As the Governor of Oregon said, referring to his proposal to cover all kids, "If you drive the plan into the middle class, it’s not just viewed as a public assistance program. You build a base of support for the program to provide health care for all of us."

Political considerations aside, President Bush needs to get his head out of the line-in-the-sand he has drawn between himself and the states and Congress over SCHIP. The obvious reality to the 64% of Americans who believe the government should guarantee health care for all, according to that same February CBS/NYT poll, is that we need to expand access to health care rather than revoke it. But as President Bush has repeatedly shown, evidence and opinions that run counter to his positions will not persuade him. In this and many instances throughout his presidency, steadfastness is a poor excuse for stupidity.

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Michael founded BlogForArizona as the Howard Dean campaign blog for Arizona in 2003, and has been blogging ever since. Michael is an attorney living in Tucson with his wife Lauren Murata. In 2008, following some health issues and new time constraints, Michael stepped back from regular blogging and began remaking BlogForArizona into a collaborative project. Michael now contributes occasionally to the blog and provides editorial and publishing direction. Also if you want to keep up with the latest Arizona and National political news that Mike finds important, check out the BlogForArizona twitter feed, which he curates.


  1. Finally the President gets one right.

    An $82,600 annual income is considered “poverty level?”

    A new tax on private insurance policies to include life insurance, medical insurance, and dental insurance? At least you guys stopped short on car insurance but that probably won’t be too long either.

    25-year-olds considered “children” and eligible for free healthcare? Maybe 25 is still a child in liberal households but to most Americans 18 is the cut-off.

    Pulling money out of Medicare to pay for it? The House bill will eliminate $50 billion (that’s with a “B”) in Medicare Advantage funding over the next five years and $157 billion through 2017.

    According to the Congressional Budget Office, the funding cutbacks will likely result in three million seniors losing their Medicare Advantage coverage, and the rest facing reduced benefits and higher out-of-pocket costs.

    Raising the Federal Tax on cigars from 5¢ to $10.00? Holy Smoke!!! You guys are going to make lots of friends in Cigar rolling and manufacturing Florida and the Tobacco growing South just in time for ’08.

    What are you guys going to do nest raise the tax on bourbon to take care of Tennessee and Kentucky? While you’re raising sin taxes don’t forget those beer producing states of Wisconsin, Missouri and Colorado.

    Come on, nobody is buying the “We’re doing it for the cheel-dren” BS anymore. You guys will have to do a better job of hiding your socialized medicine schemes.

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