Governors Schwarzenegger and Spitzer Lead Bipartisan 30 State Push to Protect Federal Funding for Children’s Health Insurance

09/17/2007 -- California Governor Arnold Schwarzenegger and New York Governor Eliot Spitzer today sent a letter to the federal government, signed by 28 additional governors, urging the U.S. Department of Health and Human Services to reconsider new rules that could significantly reduce the number of children with health insurance.

“We cannot roll back the clock on a program that has helped to ensure children who need it most have a healthy start in life. Protecting funding for this program is one of my highest priorities this year. With the power of the 30 governors who signed this letter – representing both sides of aisle - I know we can convince the federal government that saving SCHIP is the right thing to do,” said Governor Arnold Schwarzenegger.

“All across the country, states are standing up to fight for a program that provides a brighter, healthier future for our children,” said Governor Spitzer. A bi-partisan effort achieved health insurance for all children in New York, but the President’s actions mean that 70,000 children will lose that coverage.”

The new federal rules would:

* Require children to go without coverage for a full year. This is an incredibly harsh standard inconsistent with the goal of getting uninsured children health care they need. CMS will allow no exceptions. Thus, even if a parent dies or loses their job, a child must wait twelve months before she can apply for affordable health insurance under SCHIP.
* Ban state SCHIP expansion unless there has been less than a 2 percent decline in employer sponsored insurance. This fails to recognize that employer-based coverage is declining for lower income families, but not because public coverage is available for children.
* Levy a costly administrative burden. One rule would require cost-sharing to be established on a family-by-family basis. Another requires enrollment of 95 percent of eligible children under 200 percent of the federal poverty level. While we are committed to enrolling all eligible children, achieving a standard of 95 percent is virtually impossible. This is not a static population, and there is no valid way to measure this standard.

In August, Governors Schwarzenegger and Spitzer sent a similar letter to the President.

Full text of the letter sent today:

September 17, 2007

The Honorable Michael O. Leavitt
Secretary
U.S. Department of Health and Human Services
200 Independence Avenue, SW
Washington, D.C. 20201

Dear Secretary Leavitt:

Governors are deeply troubled by new Centers for Medicare and Medicaid Services (CMS) mandates that limit state flexibility under the State Children’s Health Insurance Program (SCHIP) for those states that provide SCHIP eligibility for children of families with income levels at or above 250 percent of the Federal poverty level (FPL). In fact one state has already been a victim of these new rules, which sets an unfortunate precedent that will negatively affect all states with existing programs or plans to expand coverage for children. Released as a measure to address the substitution of SCHIP for private insurance, the requirements amount to a unilateral restriction on state authority to provide health insurance coverage for children and undermine the foundation of the state-federal partnership upon which SCHIP was built.

The requirements articulated in the CMS letter of August 17, 2007, fundamentally alter the authority given to states under SCHIP to craft and operate health care programs that best serve their constituents. Flexibility to set coverage levels is a basic tenet of this vital and successful program and one repeatedly endorsed by this Administration when it granted permission to multiple states to expand their coverage options. The CMS clarification reverses this policy by mandating administrative requirements that could result in hundreds of thousands of children and tens of thousands of adults losing health insurance.

States stand at the forefront of policy innovation and governors are leading the way to create meaningful and sustainable coverage options for their uninsured populations. Governors have repeatedly called upon Congress and the Administration to reauthorize SCHIP before it expires in September. The CMS decision to limit coverage options for states and unilaterally alter existing state plans is contrary to our shared responsibility of working cooperatively to provide health coverage for uninsured children.

Governors call upon CMS to reiterate its commitment to the state-federal partnership under SCHIP by immediately rescinding its August 17, 2007, letter and joining governors in our efforts to reauthorize SCHIP this year.

Sincerely,

Governor Eliot Spitzer
State of New York

Governor Arnold Schwarzenegger
State of California

Governor Christine O. Gregoire
State of Washington

Governor Jon S. Corzine
State of New Jersey

Governor Jennifer M. Granholm
State of Michigan

Governor Kathleen Sebelius
State of Kansas

Governor Ted Strickland
State of Ohio

Governor Rod Blagojevich
State of Illinois

Governor M. Jodi Rell
State of Connecticut

Governor Brad Henry
State of Oklahoma

Governor John Lynch
State of New Hampshire