Spitzer Eyes Federal Suit Over Child Health Plan

Governor Spitzer said New York would sue the Bush administration unless the federal government grants the state a waiver to extend public health coverage to tens of thousands of more children.

A lawsuit would be a last resort for the Spitzer administration, which is hoping that Congress in September will pass a reauthorization of the State Children's Health Insurance Program, or SCHIP, that would allow states such as New York to set their own income eligibility cutoffs.

In April, state lawmakers in Albany agreed to increase the income eligibility for the program, which uses federal and state funds to provide health care to children whose families earn too much money to qualify for Medicaid. The income cutoff was raised to four times the federal poverty level, or $82,600 for a family of four, the highest level in the nation for such a program.

The Centers for Medicare & Medicaid Services, or CMS, has refused to permit New York to expand the coverage and released new regulatory guidelines earlier this month that effectively prevent New York from raising income eligibility above 2.5 times the poverty level.
Federal officials said the new standards are intended to stop the "crowding out" of private coverage.

"If they do not grant us this waiver, if they continue to be obdurate, continue to throw poison after poison pill, continue to say to us, ‘Don't worry about it there's an emergency room available for those kids…we will sue CMS," Mr. Spitzer said.

Mr. Spitzer said the new rules were illegal because they contradict provisions of the federal SCHIP law and the way the statute has been previously enforced, and because they were handed down without notice.

"With the war going the way it is, why would he select the children?" Rep. Charles Rangel said, joining the governor at a press conference in Mr. Spitzer's New York City headquarters on Third Avenue. "With Gonzales leaving, with Scooter Libby being pardoned, with Rove going, why would the president look for the most vulnerable of Americans to say that he's going to make it more difficult for them to have health care?"

The House and Senate earlier this month passed different versions of a plan to reauthorize and expand SCHIP. While the Senate version has bipartisan support, President Bush has vowed to veto either bill, saying both plans pose a threat to private insurers.

Mr. Spitzer has set a goal of covering the estimated 400,000 children in New York who are uninsured.

The overwhelming majority of those children, in fact, were already eligible for state-subsidized health care before the Legislature raised the income threshold. The change extends subsidized health insurance to only about 60,000 to 70,000 children who were not eligible.