Gotham Gazette

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Insuring New York's Children

Lanette Murphy is raising four children on the Lower East Side, one with a form of autism and two with chronic asthma, by herself. At one point when a health maintenance organization, or HMO, covered her kids, she was spending $100 a week on doctors visits on a salary of $34,000. Murphy, 43, is uninsured.

"I didn't have enough money to feed them," said Murphy shaking her head at the cost of medical care under the HMO. "For me, OK. Don’t worry about me. But what about the children?"

Murphy has since abandoned her HMO and, at the insistence of a community health center on the Lower East Side, enrolled three of her children in a state and federally subsidized children's insurance program.

Known as Child Health Plus in New York and referred to as the State Children's Health Insurance Program throughout the country, the program allows some low-income families that are ineligible for Medicaid to receive free or at least discounted health care for their children.

Earlier this year, the state legislature and Governor Eliot Spitzer approved an expansion of the state subsidized program, which receives federal matching funds, and increased the income families could receive and still be eligible. The move promised to provide health care to all of New York's 400,000 uninsured children, many of whom live in families that, despite being well above the poverty line, can still not afford health insurance.

But then New York and other like-minded states ran into a huge obstacle. Last month, the federal Centers for Medicare and Medicaid Services announced regulations rolling back the program, making it nearly impossible for states to expand coverage to families whose income was more than 250 percent of the poverty line. The regulations, advocates and New York's state, city and federal officials say, are a leap backward and could potentially spark a heated battle between the federal government and the Empire State. That fight could wind up in court.

Expanding Coverage

Approved in 1997, the State Children's Health Insurance Program was financed for a decade and is slated to expire at the end of the month. The federal program targets children from families making less than 250 percent of the federal poverty level, or $51,630 for a family of four. (The federal poverty level is $20,650 for a family of four.) Under the federal program, states had been given flexible guidelines to design insurance plans and were granted waivers to expand coverage under special circumstances.

Prior to Spitzer's proposal to expand coverage, New York enrolled uninsured children in households below 250 percent of the poverty line.

Earlier this year, the state easily approved the program's expansion to children below 400 percent of the poverty line, or nearly $83,000 a year for a family of four. Seventeen other states and the District of Columbia have all attempted to similarly expand their coverage.

If it had been approved for a required federal waiver, New York State would have had the highest enrollment ceiling in the country.

But the state's plan was rejected by the federal government earlier this month.

“Together, with New York’s congressional delegation, we will ensure that the issue remains at the forefront of the national agenda," said Spitzer in a prepared statement following the plan's rejection. "We will continue reaching across state borders and, if necessary, making the case in the courts to ensure that the nation’s 11 million children have access to check-ups, immunizations and developmental screenings that put them on the path to a brighter, healthier future.”

Under the new federal regulations, which take effect next year, states are not allowed to expand coverage to children in higher income brackets until they cover 95 percent of children below 200 percent of the poverty line.

Not a single state has reached that level of enrollment. New York's participation rate is 88 percent – one of the highest in the country.

Congress and the Bush administration are currently battling over expansion and continuation of the insurance program. While both the House and Senate have approved legislation to expand funding for the program and several senators have introduced a bill that would effectively roll back the new regulations established by the Centers for Medicare and Medicaid Services, President George Bush has promised to veto any legislation that includes insuring "the middle class."

The Effects on New York City

By Mayor Michael Bloomberg's estimates, half of the state's uninsured children live in New York City. So, any cutback or limit on insurance, advocates said, could slash the number of kids covered in the five boroughs.

“Half of all the uninsured children in the state live in the five boroughs of New York City, and providing these youngsters with affordable health insurance is a goal that I wholeheartedly share with the governor," said Bloomberg in a prepared statement.

At the Ryan-NENA Community Health Center in the Lower East Side – the center Murphy has attended for over a decade – 30 percent of all patients are uninsured, said Dr. Roxana Cruz, the medical director. When confronted with uninsured children in particular, Cruz said, the center recommends the state's subsidized insurance program.

Any reduction in coverage within that plan, she added, is sure to affect them.

"If we're not able to do something about it at this time for children, the consequences are far greater than the costs are right now," said Cruz. "It seems each time SCHIP is looked at it gets cut even more. The battle is harder."

Murphy's children have been enrolled in Child Health Plus for less than a year, but she is already more satisfied with this program than any of her previous insurance plans. Because of her income and number of children, Murphy is not at risk of completely losing Child Health Plus eligibility, but she may have to pay a higher premium if she receives a raise in her job as a parent coordinator with the city's Department of Education.

Advocates fear similar consequences from the new federal guidelines, especially for those on the cusp of the program's income eligibility requirements. In New York City, where the cost of living is far higher than the rest of the country, increases in premiums could be difficult to afford.

"If you're living at 300 percent of the poverty level and you're in New York City and you were going to be able to get your kids on a low cost health plan and you can't now, it has a huge effect," said Elizabeth Swain, the chief executive officer for the Community Health Care Association of New York State. "It's a real tragedy."

Insuring the Middle Class

According to the United Hospital Fund, a New York City-based research and policy group, about 7 percent of all kids in New York City -- or approximately 140,000 children -- are uninsured. Of the uninsured children, more than 70 percent of them live in families with incomes under 200 percent of the federal poverty level.

Given that the vast majority of the uninsured already qualify for the program, some see Spitzer's proposal as unnecessary.

A New York Post editorial called Spitzer's proposed expansion "nonsense on stilts." Like many other opponents, the Post argues that the State Children's Health Insurance Program was designed to cover low-income families that could not afford insurance - not the middle class.

"The argument that a program designed for children from low-income families ought to be expanded to a large number of families way above, I think is highly questionable," said Benjamin Zycher, a senior fellow at Center for Medical Progress at the Manhattan Institute. Insuring children from higher income families, Zycher said, would inevitably squeeze doctors, hospitals and pharmaceutical companies and make health care less accessible through low reimbursement rates from public entities.

Statewide, 82 percent of the uninsured children are already eligible for either Medicaid or Child Health Plus. Spitzer's expansion would cover the remaining 18 percent.

Even so, advocates claim that expanding the program could improve its visibility, enabling it to infiltrate a larger population of the poor and get more of New York City's children covered . Even with the program as is, the state has seen its uninsured rate for children climb slightly from 2005 to 2006–an increase of 7.4 percent to 8.4 percent, according to the U.S. Census Bureau.

"I think it's a big problem," said Danielle Holahan, United Hospital Fund's senior health policy analyst. "This being step one of a universal coverage agenda, to derail on your first building block out of the gate is frustrating."

Other advocates add that since the insurance program's premiums are on a sliding scale, families that make more would pay more.

A Legal Battle Ahead?

In both the Daily News and the Huffington Post, Spitzer has charged the Bush administration with abandoning the country's children and compared the new insurance regulations to a "poison pill." Last week, he joined the state's congressional delegation to call for a repeal of the restrictions or else.

Spitzer argues that because the Centers for Medicare and Medicaid Services did not give the public a comment period for the new regulations – state agencies learned of the changes in a letter sent out in August – the rules should be voided.

New Jersey Governor Jon Corzine is also reportedly looking into a lawsuit over the new regulations and is threatening noncompliance.

But those, like Murphy, who have been juggling HMOs and policies for years and who wait in doctor's offices and watch their children suffer from chronic illnesses, are not looking for a lawsuit – only health insurance.

" It's very stressful thinking, 'Oh my god I hope my child doesn't get sick,'" said Murphy. "If you are unable to afford health care for your children you shouldn't be penalized."



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