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Lawmakers Blast CMS Actions to Restrict Medicaid Expansions

By Mary Agnes Carey, CQ HealthBeat Associate Editor

January 15, 2008 -- House and Senate Democrats said Tuesday the Centers for Medicare and Medicaid Services (CMS) has no authority to limit states' efforts to extend health coverage to more children through Medicaid.

In a letter sent to Department of Health and Human Services (HHS) Secretary Michael O. Leavitt, the lawmakers wrote that recent actions by CMS regarding several states—including Ohio, Louisiana, New York, Wisconsin, and Oklahoma—will "deny health care to the uninsured children of working families who are lawfully entitled to care at a time when economic pressures on families are high."

In December CMS denied Ohio's state plan amendment to expand coverage to uninsured children through the Medicaid program, applying an Aug. 17 directive to state officials that stops states from extending Medicaid coverage to children in families with incomes above 250 percent of the federal poverty line without first showing that 95 percent of those eligible below 200 percent of poverty have been enrolled in the program. Advocates of wider government coverage of uninsured Americans with modest incomes say that standard is impossible to meet.

Last year, President Bush twice vetoed Democratic attempts to expand the State Children's Health Insurance Program (SCHIP). Democrats were unable to muster the votes to override Bush's first veto and postponed considering an override attempt of the second veto until Jan. 23. Meanwhile, they cleared a short-term extension that will keep the program running until March 31, 2009, signaling that they have little hope of enacting an expansion under Bush.

"Despite repeated warnings about the legality of the Aug. 17, 2007 directive and the absence of a formal rulemaking process, your administration has continued to pursue a policy that is contrary to federal law and that limits children's access to health care," the lawmakers wrote to Leavitt. "Federal law does not authorize CMS to effectively impose an income eligibility cap in [SCHIP] or Medicaid, nor does it require states wanting to cover children at levels higher than 250 percent of poverty [or $43,000 a year for a family of three] to have to use 100 percent state-only funds to do so."

Nothing in the SCHIP statute "affects underlying Medicaid eligibility or states' ability to expand coverage to children using Medicaid funds," the letter states. The lawmakers said the net effect of the administration's actions "is that fewer children will have access to comprehensive health care coverage including fewer children in families earning below $35,000 a year."

The lawmakers, who include Senate Finance Committee Chairman Max Baucus, D-Mont., House Energy and Commerce Committee Chairman John D. Dingell, D-Mich., and House Oversight and Government Reform Committee Chairman Henry A. Waxman, D-Calif., request CMS to reverse its decision immediately and ask Leavitt for a response to the letter by Jan. 31.

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