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As Congress was finalizing
bipartisan legislation to reauthorize the State Children’s Health Insurance
Program (SCHIP), the Center for Medicaid and Medicare Services (CMS)
circulated, on August 17, 2007, a new federal directive in the form of a letter
to program directors. The directive dramatically alters rules that had governed
SCHIP for the past ten years, limits states’ ability to design and finance
their own programs, and gives them exactly one year to amend their individual
SCHIP programs or risk corrective action by the federal government.

CMS imposed a uniform, federal gross income cap of 250
percent of the federal poverty level or $42,925 for a family of four. CMS does
not have legal authority to set income caps on SCHIP, so CMS accomplished a de
facto cap by limiting states’ flexibility to cover children above 250 percent
of the federal poverty level, allowing the higher coverage only when states
prove that they meet new federal guidelines.

The directive demands that, before raising income
eligibility to higher levels, states must show that they have enrolled at least
95 percent of all uninsured children already eligible for SCHIP or
Medicaid—that is, children with incomes below 200 percent of the federal
poverty level. Based on estimates by the Urban Institute of the Census Bureau’s
Current Population Survey, state Medicaid and SCHIP participation rates among
low-income children range from a low of 51 percent in Nevada to a high of 89
percent in Vermont. Overall, enrollment rates vary widely among states and are
difficult to measure. What data CMS will accept to show participation numbers
among the already eligible but uninsured is still not clear.

Once the participation rate
requirement is met, states are allowed to expand their programs above 250
percent of the federal poverty level only if they can show that they have
reasonable procedures to prevent “crowd-out,” a process where parents move
children from private coverage to the publicly funded SCHIP program. States
must prove that private employer-based coverage for lower-income children has
not declined by more than 2 percent over the past five years. Employer coverage
has been on the decline for many years. According to a survey conducted in
October 2007 by the Employee Benefit Research Institute, employer-sponsored
coverage between 2000 and 2005 dropped almost 9 percent for children under 18.
This is a trend that states have little control over, and once again CMS has not
issued clear guidelines for “reasonable procedures” that states may use to
measure such trends.

The CMS directive, effective
August 2008, has already had a significantly negative impact on children’s
coverage. The directive is not only slowing down the coverage of
uninsured children but also leaving more children uninsured as some states pull
back on SCHIP eligibility or scrap planned expansions. Congress must repudiate
the CMS directive as inconsistent with CMS authority and with good policy. The
focus should be on insuring all children, a goal that is within sight if CMS
gets out of the way.

To learn more, contact Melissa Cubria at melissacubria@povertylaw.org or
312.263.3830 ext. 241.

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Thirty-seven million Americans live in the state of poverty,
but who cares and what are we going to do about it? As a country, we were
forced to confront our progress when the Gulf hurricanes revealed places of
deep poverty. Like the task of building levees and responding to an immense
national catastrophe, the job of taking on the complex structural causes of
poverty is well beyond what compassionate individuals can do. To address the
root causes of poverty, Congress and the President must adopt the right
priorities, enact needed laws, and adequately fund essential programs. This
week the Shriver Center released its 2007 Poverty Scorecard to hold leaders
accountable to that very task.

The 2007 Poverty Scorecard: Rating Members of Congress
assigns letter grades to each member of the U.S. Senate and House of Representatives
according to his or her voting records on poverty-related issues that came to a
vote in 2007—legislation on affordable housing, health care, education, labor,
tax policy, and immigrants’ rights. With the help of a national advisory board
and other antipoverty experts, the Shriver Center identified and analyzed
fourteen Senate votes and fifteen House votes.

“This Scorecard is important because it looks at a whole
range of critical issues, all of which have to be addressed by the country in
order to deal with millions of Americans, more than the population of
California, who live in poverty every single day,” said John Edwards, the
former senator, Democrat of North Carolina, during the teleconference release
of the Scorecard. “We can get the congressional leadership that we need, but
it’s crucial that voters be educated, that they know who’s doing the right
thing and who’s not.”

Edwards noted that many of the bills—such as increasing the
minimum wage and making it easier for workers to unionize—that failed in
Congress last year would have easily helped pull Americans out of poverty.
These policy changes reflect the view that if you are working full-time, you
should not be struggling to pay the bills, Edwards said.

“People who are working ought to be able to provide for
their family,” he said. “People who are working full-time should not be in
poverty.”

The goal of the Shriver Center’s Poverty Scorecard is not
just to identify poverty-fighting initiatives that Congress acted upon in 2007
and grade each member on how they voted. The Shriver Center also hopes that the
evaluation will shine a light on how Congress is doing, that it will elevate
the issue of poverty on the national agenda, and that members of Congress will
be moved to pay greater attention and perform better in the fight against
poverty.

For further information, contact Joanna VanderWoude at jvanderwoude@povertylaw.org or
312.263.3830 ext. 253.

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