Children's Health Insurance Coverage Changes

The Congressionally approved spending increase children's health insurance program will maintain health insurnce coverage for those already enrolled, but those currently lacking health coverage will have to look elsewhere. This development could not have been foreseen a year ago. Democrats proposed a huge spending increase on the federal-state partnership known as the State Children's Health Insurance Program. In addition, Many Republicans embraced the idea, while states were drawing up plans to expand health insurance coverage.

Virginia was one of several states going into the year thinking about expanding eligibility limits for SCHIP. It's a typical state in that it provides health coverage for families with incomes up to twice the federal poverty level. Lawmakers across the state line in West Virginia approved an expansion that would have raised the eligibility level to $51,510 for a family of three. It's now at $37,774. The increase would have led to about 4,000 more West Virginia children receiving health insurance coverage.

Republicans say any expansion should not allow middle-income families to drop private health coverage for the government sponsored coverage. They insisted that SCHIP retain a new Bush administration directive that makes it harder for states to cover middle-income children. Democrats criticized the directive for months. They promised to rescind it, but failed.

The directive said that before states cover higher-income children, they must meet the following threshold: At least 95 percent of children eligible for Medicaid and SCHIP with incomes less than twice the poverty level must be enrolled in those programs.

Many states say meeting that threshold is nearly impossible. But that's not all the directive said. Even if states meet that threshold, the middle-income children will have to go without private health insurance coverage for a full year before they can enroll in SCHIP, and their families will have to pay premiums or co-payments that are 5% of their income.

The directive will affect about half the states. 14 are already covering children above $42,925 for a family of three and 10 more were planning to do so, says the Center for Children and Families at Georgetown University.
One of those states, California, is considering a proposal that would require all Californians to have health insurance coverage, but a central piece of that proposal also increases the threshold for SCHIP eligibility — from the $42,925 level for a family of three to the $51,510 level.