Bush cracks down on child insurance program

New rules limit states' options

The Bush administration, continuing its fight to stop states from expanding the popular Children's Health Insurance Program, has adopted new standards that would make it much more difficult for states to extend coverage to children in middle-income families.

Administration officials outlined the new standards in a letter sent to state health officials Friday evening, in the middle of a monthlong congressional recess. In interviews, they said the changes were designed to return the Children's Health Insurance Program to its original focus on low-income children and to make sure the program does not become a substitute for private health coverage.

After learning of the new policy, some state officials said Monday that it could cripple their efforts to cover more children and would impose standards that could not be met.

"We are horrified at the new federal policy," said Ann Clemency Kohler, deputy commissioner of human services in New Jersey. "It will cause havoc with our program and could jeopardize coverage for thousands of children."

Stan Rosenstein, the Medicaid director in California, said the new policy was "highly restrictive, much more restrictive than what we want to do."

The poverty level for a family of four is set by the federal government at $20,650 in annual income. The program originally focused on children below twice the poverty level, but many states have received federal permission to go higher.

California wants to increase its income limit to 300 percent of the poverty level, from 250 percent. Pennsylvania recently raised its limit to 300 percent, from 200 percent. New Jersey has had a limit of 350 percent for more than five years.

The Children's Health Insurance Program has strong support from governors of both parties.

When the Senate passed a bill to expand the program this month, 18 Republican senators voted for it, in defiance of a veto threat from Bush.