N.J. Wants Rules for Health Plan Blocked

By Christopher Lee
Washington Post Staff Writer
Tuesday, October 2, 2007

New Jersey officials asked a federal judge yesterday to block new Bush administration rules that would make it harder for states to enroll middle-income kids in a popular government-subsidized health insurance program for children.

Seven other states, including Maryland, promised to do the same if President Bush vetoes legislation that would renew and extend the State Children's Health Insurance Program. The program, known as SCHIP, targets children whose families earn too much to qualify for Medicaid but not enough to buy insurance.

The New Jersey lawsuit, filed yesterday in U.S. District Court, contends that the federal Centers for Medicare and Medicaid Services (CMS) violated the law by not going through a formal rulemaking process when it announced the new regulations. That process would require CMS to publish a notice in the Federal Register and provide the public an opportunity to comment.

"The CMS letter is . . . a sudden and unfounded reversal of long-standing federal policy and nine years of express federal approval of New Jersey's SCHIP programs and procedures," New Jersey Attorney General Anne Milgram wrote in the 21-page complaint. "This reversal would eviscerate New Jersey's health insurance programs and result in the denial of coverage to thousands of children."

Gov. Jon Corzine (D) has said that the rules, which are to take effect next summer, will jeopardize health coverage for as many as 10,000 of the 122,000 children in New Jersey's version of the program, known as FamilyCare. The state's program offers coverage to children from families earning up to 3 1/2 times the poverty level, or $72,275 for a family of four, higher than in any other state.

The new rules would prevent states from enrolling children whose families earn more than 2 1/2 times the poverty level -- $51,625 for a family of four -- until the children have gone without health coverage for at least a year.

Another change would prevent states from enrolling such children unless they had already enrolled at least 95 percent of eligible children from families earning less than double the poverty level ($41,300 for a family of four) in Medicaid or SCHIP. Critics say no state can meet that requirement.

CMS spokesman Jeff Nelligan said the agency is confident that the new rules will be upheld. "Our chief goal with SCHIP is to ensure that the poorest kids and those with no health insurance are placed at the front of the line," he said.

Yesterday, officials from Arizona, California, Illinois, Maryland, New Hampshire, New York and Washington said they would file or support lawsuits challenging the rules if the president does not sign the SCHIP legislation passed by Congress last week.

The bill, which would raise taxes on tobacco and provide $60 billion for the 10-year-old program over the next five years, would roll back the new rules. Bush has promised to veto the bill, saying it would inappropriately expand the federal role in health care and prompt some middle-class families to drop private coverage.

The bill has the backing of lawmakers and governors from both parties, as well as the health insurance industry and groups such as AARP. Supporters are vigorously campaigning for Bush to sign it this week -- or for Congress to override his veto if necessary.

"It is time for President Bush to do his part and join the consensus and invest dollars in protecting the health of our children here at home," Maryland Gov. Martin O'Malley (D) said yesterday.

Staff writer John Wagner contributed to this report.

© 2007 The Washington Post Company