Thousands of Massachusetts children from low-income families could be denied health insurance under new rules imposed by the Bush administration late last week. The rules could cut federal matching funds for a state-run program that is a key component of the state's health insurance initiative.
But congressional leaders, including Senator Edward Kennedy, a Massachusetts Democrat, said yesterday that they would fight the changes, which are the latest volley in the national battle over the future of the State Children's Health Insurance Program, or SCHIP.
Using a combination of state and federal funds, the program covers some 6.6 million children nationally and 90,500 in Massachusetts in low-income families.
As part of its health insurance reform, Massachusetts expanded eligibility to children in families earning up to 300 percent of the federal poverty level, or $61,950 for a family of four. The change was made last year with federal approval and brought coverage to about 14,000 more Massachusetts children.
In Massachusetts, the program is the main means of insuring children in families above the poverty level who do not qualify for Medicaid and who frequently cannot afford private insurance. The state's health insurance initiative did not include any other effort to cover children.
The new federal rules could block enrollment of more children above 250 percent of the poverty level and could make it tougher for the state to continue covering about 4,500 already enrolled. State officials said they do not yet have a count of the number who are eligible but not enrolled.
"We need to do further analysis to determine how these new requirements translate for Massachusetts," Stephanie Anthony, the state's deputy Medicaid director, said in a prepared statement. Healthcare advocates said the requirements would hurt the Massachusetts insurance initiative.
"It would result in more kids in Massachusetts going without needed health insurance," said Brian Rosman, research director for Health Care for All. "It would . . . take away one of the essential components of comprehensive reform."
At least 17 other states similarly expanded their coverage in recent years, and five more are considering these changes, according to Families USA, a healthcare advocacy group.
But the Bush administration has become concerned about those expansions, and on Friday, the office that oversees the program sent a letter to state officials across the country imposing rules that would make it extremely difficult for most states to enroll new children from families with incomes above 250 percent of the federal poverty level.
Children already enrolled in the program should not be cut off, according to Dennis Smith, the federal official who sent the letter, although Kennedy's staff and Massachusetts advocates suggested it might have that effect.
"SCHIP was created for children in low-income families," said Smith, director of the federal Centers for Medicare & Medicaid Services. "We want to make sure those kids are covered before we go to the higher-income kids."
Smith said the administration is enforcing rules designed to ensure that the program is not substituting for private insurance.
But supporters of the coverage expansion said the requirements were an attempt to circumvent congressional plans to extend the program and expand its funding. Both the House and Senate have passed bills to continue the SCHIP program for five years and allow enrollment of children from higher-income families, although Congress recessed for a summer break before resolving differences between the two bills. President Bush has previously threatened to veto the measures.
"Once again, the Bush administration has shown itself to be out of touch and out of step with the priorities of working Americans," Kennedy said yesterday in a prepared statement. "The administration's action denies the promise of good health to thousands of children in communities across America."
The federal government is requiring states to take a number of steps over the next year if they want to continue to cover children at higher incomes, and Anthony said Massachusetts meets only some of these requirements.
Under the requirements, children must be without insurance for a year before they can be enrolled, and families of children in the program must pay fees for care similar to those paid by families with private insurance. In addition, the state must show that it has enrolled at least 95 percent of children below 200 percent of poverty and that the number of children insured through private companies has not dropped more than 2 percentage points over five years. The latter requirement is supposed to ensure that employers aren't dropping family coverage.
The new requirements were first reported yesterday by The
In Massachusetts, a national survey from 2005 showed that 94.4 percent of children below 200 percent of poverty were insured, she said, close to the 95 percent requirement.
But the state only imposes a six-month waiting period. She said the state will have to analyze whether its policies comply with the other rules.
Alice Dembner can be reached at Dembner@globe.com.