Obama Reverses Bush’s Restrictions on SCHIP

The big healthcare news from the Obama administration over the last few weeks has been that the State Child’s Health Insurance Program will be expanded, but another SCHIP-related change that happened around the same time hasn’t received as much attention.

This change is a reversal of enrollment rules imposed in August 2007 by the Bush administration. Controversial at the time, the new rules made it much more difficult for states to allow certain families to use SCHIP. For families whose income totaled more than 250% of the federal poverty line (that equates to around $50,000 per year for a family of four), it suddenly became all but impossible to use SCHIP. Several states actually sued the federal government over this change, including Maryland, Illinois and Washington.

In May 2008, Bush relented a little by reducing the income restriction to around 200% of the federal poverty line, or about $40,000 per year for a family of four.

Obama Lifts SCHIP Income Requirements

Now, President Obama has sent a memo to Health and Human Services, explicitly lifting those enrolment rules. In the memo, Obama states that since the 2007-2008 eligibility restrictions, “tens of thousands of children have been denied health care coverage.”

A different picture from Bush’s stated intention to prevent SCHIP providing healthcare for children who would otherwise be covered privately. But the 2007-2008 rulings simply didn’t work – with one single eligibility rule covering fifty states with widely different costs of living. Not to mention the fact that for any family with income at 250% of the federal poverty line to even be eligible, the state first had to cover 95% of children at less than 200%.

SCHIP Expansion Funded by Tobacco Revenue

Critics of Obama’s plans to expand SCHIP are mindful of the fact that funds for the scheme are coming from the tobacco industry in the form of a new consumer tax. Other criticism from the public includes that the new administration is needlessly expanding the government’s role in health care, and encouraging families with access to private insurance to rely on the government instead (however, the fact is that SCHIP will only be eligible to families who can’t afford insurance by any other means – families with insurance available through an employer won’t be eligible, for example.)

On the other hand, there are many advantages to expanding SCHIP that aren’t necessarily obvious. One is that covering kids will help provide more preventative health care for families who wouldn’t otherwise have access. Many people living below or near the poverty line simply don’t visit doctors, instead relying on emergency medical treatment. With the country’s emergency health care system already stretched to near breaking point, the possibility of easing the strain is a distinct advantage.

photo credit: Bah Humbug

This entry was posted on Thursday, February 12th, 2009 at 3:25 pm and is filed under Health & Politics, Health Insurance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.