For immediate release: May 6, 2008 Contact: Trudi Renwick, Ph.D.,…

For immediate release:
May 6, 2008


Contact:
Trudi Renwick, Ph.D., Senior Economist, Fiscal Policy Institute
518-786-3156
Martha Pofit, Co-Chair, New York Children's Action Network Health Committee
518-453-6626
Lara Kassel, Advocacy Coordinator, Medicaid Matters New York
518-320-7100
Cindy Mann, Executive Director, Center for Children and Families
202-687-0883

Report ­ available at http://ccf.georgetown.edu:
Out of Touch: A Status Report on the Impact of CMS's August 17th Directive on
Children's Health Care Coverage.


      New Report: Fed Directive Threatens to Cut Funds
         for New York Children's Health Coverage
Washington ­ About 50,000 New York children were forced to wait a year for the
opportunity to receive affordable health care coverage because of a directive issued last
August by the Bush administration, according to a report released today by Georgetown
University's Center for Children and Families (CCF). The directive forced New York's
Child Health Plus program to delay offering coverage to uninsured children in moderate-
income families who are unable to find affordable health care coverage from private
insurers.

The report also concludes that although most New York children are now covered, the
administration's directive--which bypassed Congress--will cut current and future
federal funding for their insurance.

"This federal policy change couldn't come at a worse time for New York families and the
state of New York," said Trudi Renwick, senior economist with the Fiscal Policy Institute.
"As more families are experiencing financial hardship and the state is trying to balance its
budget with lower than expected revenues, the administration's actions make it more



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FPI, New York CAN, Medicaid Matters: Federal Directive Hurts the State           May 6, 2008


expensive for New York to soften the impact of the economic downturn on their most
vulnerable residents--uninsured children."

"When families struggle to regain financial stability during this economic downturn, the
least we can offer them is the peace of mind that their children's health will be covered,"
said Martha Pofit, co-chair of the New York Children's Action Network Health
Committee (New York CAN). "When a child is ill, how can we tell him to just wait a
year to get health care?"

According to the report, the administration bypassed Congress in issuing the directive,
which drastically alters the rules that have governed the State Children's Health
Insurance Program (SCHIP) for ten years. SCHIP is a federal-state partnership designed
to provide affordable healthcare coverage to children.

By bypassing Congress, the administration overstepped its legal authority in issuing the
policy changes, according to newly issued General Accountability Office (GAO) and
Congressional Research Service (CRS) analyses cited in the report. Thirty governors and
numerous members of Congress have called on the Bush administration to rescind the
directive. A number of legal challenges have also been filed against the directive,
including one from a New York family.

"The Bush Administration deliberately undermined the intent of Congress in issuing this
rule. Congress should move swiftly to overturn the rule before more children are
harmed," said Lara Kassel, coordinator of the Medicaid Matters New York coalition.

New York's Child Health Plus Program provides affordable health care for 394,200
children in families with incomes up to 250 percent of the federal poverty level ($44,000
in pretax income for a family of three). Families are charged monthly premiums and co-
pays based on a sliding scale.

The 2007-2008 state budget included a provision to expand the Child Health Plus
program to cover children in families with incomes up to four times the federal poverty
level. This expansion was scheduled to take effect September 1, 2007, but was
conditioned on federal approval. When the federal government refused to approve the
expansion, it was suspended.

There are approximately 400,000 children in New York without health insurance and the
Census Bureau estimates that 77,000 of these children live in families with incomes
between 250 percent of the poverty line and 400 percent of poverty. The CMS directive
has delayed insurance coverage for these New York children.

This year, the 2008-09 state budget includes a Child Health Plus expansion that is not
conditioned on federal approval. It is scheduled to go into effect on September 1, 2008
and expects to enroll 50,000 children. The federal share of this expansion for 2008-09
would be $19 million but would grow to $70 million in 2009-10 when the expansion is in
effect for a full year. At a time when Governor Paterson and the New York State Division



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FPI, New York CAN, Medicaid Matters: Federal Directive Hurts the State            May 6, 2008


of the Budget are predicting large budget gaps for the next three years, the CMS directive
deprives New York's Child Health Plus program of federal support for this critical
initiative.

"Unpaid medical bills piling up on the dining room table are not as obvious signals of
trouble as foreclosure signs cropping up in yards, but the pain they can inflict is just as
harmful," said Cindy Mann, executive director of the Georgetown University Center for
Children and Families. "This policy is clearly out of touch with the economic reality
faced by uninsured families and states trying to help them."

As the economy weakens, unemployment rises and more families lose access to
affordable health insurance. According to a Kaiser Family Foundation study cited in the
report, an estimated 1.1 million Americans become uninsured when unemployment rises
by one percentage point.

The report is based on a growing body of new data and analyses by state officials,
research organizations and legal experts. Copies of the report, "Out of Touch: A Status
Report on the Impact of CMS's August 17th Directive on Children's Health Care
Coverage," are available at http://ccf.georgetown.edu.

The Fiscal Policy Institute (FPI) is a nonpartisan research and education organization
that focuses on the broad range of tax, budget, and economic public policy issues that
affect the quality of life and the economic well being of New York State residents.

New York CAN is a broad-based initiative that brings together over 160 coalitions,
organizations and individuals concerned about issues affecting children and families.

Medicaid Matters New York is a coalition of over 130 groups representing those most
affected by Medicaid policy debates: the four and a half million New Yorkers who rely on
this crucial public program for basic, lifesaving health care.

The Center for Children and Families (CCF) is an independent, nonpartisan policy and
research center whose mission is to expand and improve health coverage for America's
children and families. CCF is based at Georgetown University's Health Policy Institute.

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