State of CT Asks Federal Court To Strike Down Rules That Will Restrict Access To Children's Health Insurance

April 9, 2008 -- Connecticut Attorney General Richard Blumenthal, in a brief filed today, urged the federal court to strike down an illegal rule change by the U.S. Department of Health and Human Services that could severely restrict access to a highly successful state-federal children's health insurance program.

Blumenthal filed the amici curiae brief jointly with the Massachusetts Attorney General Martha Coakley, in coordination with Department of Social Services (DSS) Commissioner Michael Starkowski.

The brief supports New Jersey's challenge against new federal rules for the State Children's Health Insurance Program (SCHIP). The rule changes, which must be implemented by August 2008, potentially slash the number of children eligible for the program, force kids to wait a year before enrolling, impose impossible-to-meet requirements on states and significantly increase user costs.

About 16,000 to 17,000 Connecticut children currently receive health insurance under HUSKY B, the state SCHIP program affected by the rule changes.

"We must stop the federal government's attempt to shove thousands of Connecticut children off of health insurance," Blumenthal said. "SCHIP helps families on the brink of poverty - children with parents who cannot afford private health insurance, but earn just enough to bar them from Medicaid access.

Blumenthal added, "The federal government is arbitrarily abandoning and undermining longstanding policies that protect thousands of Connecticut children. There is no excuse or moral and legal basis to deprive innocent children of what is potentially their only source of health insurance. Once again, the Bush administration has defied reality facing countless citizens, as well as common sense and the law."

The rule change would affect almost 5,000 Connecticut children immediately, and almost 7,500 over the course of a year due to the number of children with family income over 250 percent of poverty coming onto and off the program over time as their family's financial circumstances change.

Connecticut stands to lose approximately $6 million per year as a result of the federal directive.

Congress created the SCHIP program in 1997 to provide medical coverage for children whose parents earn too much to qualify for Medicaid, the state-federal insurance program for the poor. All 50 states and the District of Columbia established SCHIP programs serving about 6.6 million children nationwide.

The program has income caps, but the law and DHHS regulations traditionally have granted states flexibility in setting those caps. The law and DHHS also dictate how much recipients pay and how long children must be without insurance before enrolling, as well as safeguards to assure the program does not crowd out private insurers. As with income levels, DHHS traditionally has given states significant latitude in meeting these requirements.

In an Aug. 17, 2007 letter, DHHS' Centers for Medicare and Medicaid Services informed the states that it is taking away their flexibility to set program rules and imposing draconian new restrictions including:

* Ordering states to certify that 95 percent of children whose parents earn 200 percent of the poverty level (or $42,000 annual income for an entire family of four) or below are covered by SCHIP, Medicare or Medicaid before they can expand coverage to families with higher incomes. Because this requirement is virtually impossible to meet, the new rules effectively bar from the program anyone earning above 250 percent of the poverty level (or $53,000 annual income for a family of four). Connecticut's cap is 300 percent above the poverty line; the state has long had federal permission to cover families earning up to 300 percent over the federal poverty line. Children in those families may be at risk of losing coverage if the rules remain in place.

* Requiring children to go without insurance for a year before enrolling in SCHIP. Connecticut currently has a two-month waiting period. Connecticut currently has a two-month waiting period, with numerous exceptions where alternative, employer-sponsored health insurance is not available, for example, in cases of death, disability, or loss of employment. The unavailability of exceptions under the recent federal directives means that thousand of Connecticut children with no available, alternative health insurance will have to wait a whole year for coverage, notwithstanding that they may be suffering from untreated, debilitating conditions."

* Requiring states to certify that the number of children in the program's targeted population covered by private medical insurance has not decreased by more than 2 percent in the previous five years. Such a mandate is impractical given the large number of private insurers, the multitude of plans and the difficulty of identifying all potential SCHIP recipients. The states will be unable to make this required assurance because national data indicates that the percentage of children in families of all income levels who are covered by employer-sponsored insurance has declined significantly more than 2 percent over the most recent five-year period.

* Introducing a complicated formula that virtually assures at least some recipients will pay higher fees.

New Jersey's lawsuit seeks an order staying the rules and alleges multiple violations of the SCHIP law and federal statutes requiring public notice and comment on program rule changes.

Source: Connecticut Attorney General

Bookmark/Search this post with:

 •    •    •    •    •    •    •    •    •    •    •    •