Insuring Poor Children (The Washington Post)

The Bush administration tries to preempt a debate about how broad federally sponsored coverage should be.

President Bush and congressional Democrats are battling over how high up the income scale states should be allowed to go in offering health insurance to poor children under the decade-old program known as SCHIP. Now, the administration has moved to short-circuit the legislative debate and, in effect, impose by administrative fiat a limit of 250 percent of the federal poverty level, about $43,000 for a family of three.

States were told this month that they will no longer be allowed to enroll children whose families earn above 250 percent of the poverty level unless they can prove that they have managed to cover 95 percent of children below 200 percent of the poverty level and unless they require that children who previously had private health insurance wait a full year without coverage before enrolling in the State Children's Health Insurance Program. The debate is a complicated one, since offering coverage for children in higher-earning families risks displacing existing private insurance. But for SCHIP the administration's income cap is too strict, given variations in the cost of living and the price of health insurance. Its linked coverage target is too hard to reach -- few states even come close. A year is too long a time for a child to go uninsured. And the administration's way of implementing a major policy shift that would affect at least 19 states and the District of Columbia is too highhanded.

Certainly, insurance efforts ought to concentrate -- as the competing SCHIP measures that have passed the House and Senate do -- on covering children in families with the lowest incomes. Certainly, states that offer SCHIP coverage above 200 percent of poverty, the limit the Bush administration is pressing for in Congress, ought to require -- as most now do -- that families pay premiums and that the premiums rise as incomes go up.

Evidence suggests that families enrolling their children in SCHIP aren't doing so because it's more convenient or cheaper than paying the cost of private insurance, but because it's the only real option they have. The average monthly premium paid by employees for family coverage has risen from $135 in 2000 to $248 in 2006. Meanwhile, the share of companies offering health coverage has dropped -- from 66 percent to 61 percent -- and coverage is even scarcer at companies that employ a greater number of lower-paid workers.

A recent study of SCHIP recipients in 10 states conducted by the Urban Institute for the Department of Health and Human Services found that 28 percent had private coverage at some point in the six months before they enrolled in SCHIP. Of those, half -- 14 percent -- reported losing coverage involuntarily, because of job loss, their employer's decision to stop offering health insurance or some other change in circumstance. "This suggests that relatively few SCHIP enrollees could have retained private coverage and that even fewer had parents who felt the option was affordable," the researchers concluded.

Granted, the risk of parents dropping private coverage to sign up for SCHIP is greater for parents with higher incomes. But there is a risk, too, when society allows children to remain uninsured.