06.18.07

Cantwell Urges Fix to Help Washington Extend Health Insurance to More Uninsured Kids

state forced to turn back millions each year that could go to expanding coverage

WASHINGTON, DC – U.S. Senator Maria Cantwell (D-WA), a member of the Senate Finance Committee, asked Committee Chair Max Baucus (D-MT) to help correct State Children’s Health Insurance Program (SCHIP) rules that needlessly punish Washington and other states that have long led the way in covering uninsured children. The Finance Committee is set to reauthorize SCHIP this year.

In a letter sent late Friday to Baucus and Finance Committee Ranking Member Charles Grassley (R-IA), Cantwell and 17 of her Senate colleagues from similarly affected states asked that SCHIP be revised so that these states can use their full SCHIP allotment. SCHIP is a federal program that helps states cover uninsured low-income children from families with incomes above Medicaid eligibility levels.

Before this new federal-state partnership was ever envisioned, Washington was leading the charge to cover the uninsured by stretching Medicaid dollars to cover children who would typically be ineligible to receive help from Medicaid—the group SCHIP now aids. Today, Washington covers 140,000 of these kids through Medicaid. Unfortunately, when SCHIP was created, Washington was penalized. States that never covered this group of children received extra federal dollars, but SCHIP rules blocked Washington and other similar states from using the program to cover anyone eligible for coverage under another program. As a result, Washington state has been forced to turn back more than $200 million in federal funds over the past 10 years. As the Finance Committee prepares to reauthorize SCHIP, Cantwell is working to make sure the problem gets fixed.

[The full text of the senators’ letter follows below]

Senator Max Baucus, Chairman
Senate Finance Committee
Washington, DC 20510
Senator Charles Grassley, Ranking Member
Senate Finance Committee
Washington, DC 20510

Chairman Baucus and Ranking Member Grassley:

We represent states that led the way in increasing children’s health care coverage prior to the creation of the State Children’s Health Insurance Program (SCHIP). As part of the upcoming SCHIP reauthorization, we urge you to correct an inequity in the SCHIP law that penalizes this leadership.

When SCHIP was created, our states were already covering low-income kids up to at least 185 percent of poverty – in some cases higher – through our Medicaid programs. The original SCHIP statute prohibited our states from using federal SCHIP dollars for these targeted low-income kids. A handful of states that had expanded coverage using state dollars were allowed to grandfather their programs into SCHIP. Our states were completely locked out.

Most states waited to expand kids’ coverage until after SCHIP was created in 1997 and were rewarded with an enhanced federal SCHIP matching rate. Our states, which were the early movers on kids’ coverage, were denied the enhanced match for kids at exactly the same income levels.

The impact of the penalty grows as our states cover more low-income kids. Rather than all states having the same incentive to enroll low-income children, for every new child we enroll that falls under our expansion programs, we miss out on the enhanced federal SCHIP payment.

A temporary measure, the so-called "qualifying states" provision, has allowed our states access to up to 20 percent of our SCHIP allotment for our expansion populations. While helpful, the 20 percent provision falls far short of equity for our states. We should not continue to be penalized for our leadership in covering kids. We need access to our full SCHIP allotment to support our coverage of low-income kids.

We urge you to ensure that any SCHIP reauthorization package allows qualifying states full access to our SCHIP allotment to support coverage for kids in our expansion populations. Further, any new baseline for determining SCHIP state allotments should count our expansion populations to help prevent our states from being further penalized for being leaders in kids’ coverage.

Thank you for your consideration of our views. We look forward to working with you to ensure full equity for our states in SCHIP reauthorization.

Sincerely,

Senator Maria Cantwell
Senator Pete Domenici
Senator Patty Murray
Senator Daniel Akaka
Senator Jeff Bingaman
Senator Chris Dodd
Senator Sheldon Whitehouse
Senator Ben Cardin
Senator Daniel Inouye
Senator Barbara Mikulski
Senator Bernie Sanders
Senator Amy Klobuchar
Senator Patrick Leahy
Senator Jack Reed
Senator Norm Coleman
Senator Herb Kohl
Senator Russ Feingold
Senator Joe Lieberman