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GOVERNOR SPITZER ANNOUNCES FILING OF BI-PARTISAN MULTI-STATE LAWSUIT TO SECURE HEALTH INSURANCE FOR CHILDREN

Governor Eliot Spitzer today announced that New York, Illinois, Maryland and Washington filed a lawsuit against the federal Department of Health and Human Services (HHS) to challenge its unlawful action in imposing new rules governing the State Children’s Health Insurance Program (SCHIP). Arizona, California, Connecticut, New Hampshire and New Mexico are submitting friend of the court briefs in support of the action, and New Jersey filed a similar lawsuit. Together, these states represent millions of uninsured children.

SCHIP provides affordable health coverage for children in families that cannot afford to buy private health insurance. The original SCHIP statute was designed as a federal-state partnership that allows states flexibility in how they provide health insurance coverage to children. This week, President Bush vetoed a reauthorization of the program that had passed both houses of Congress by a wide bi-partisan margin.

“It is a tragic day when we have to sue our own President for denying health care coverage to children who cannot afford it,” said Governor Spitzer. “If a country is judged on how it treats its most vulnerable citizens, then civilized nations around the world must be marveling that our President is fighting to withhold health care from our children.”

In addition to reauthorizing this vital program that is now set to expire November 16, the legislation vetoed by the President would have rolled back the new rules issued by HHS through its Center for Medicare and Medicaid Services (CMS) on August 17, 2007. The litigation filed today challenges those rules on grounds that they impermissibly conflict with the SCHIP statute and were unlawfully issued without an opportunity for public comment as required by the federal Administrative Procedure Act. The states are asking the court to declare that the rules are unlawful and to prohibit CMS from applying the rules when reviewing individual state plans submitted under SCHIP.

The August 17 rules impose arbitrary new requirements that block states from expanding their children’s health insurance programs. For example:

• CMS declared that a state cannot provide coverage to children in families making above 250 percent of the Federal Poverty Line (FPL) unless it can show that until it enrolls 95 percent of those eligible for SCHIP in households making under 200 percent of the FPL. While all states aspire to cover every eligible child possible, no state has yet reached the 95 percent threshold. In New York, 88 percent of such children are enrolled; the national average is 74 percent.
• CMS announced that states must adopt specific strategies to prevent “crowd out,” which would occur if SCHIP coverage were to substitute for private insurance. All states that participate in SCHIP already have strategies to prevent crowd out, including waiting periods which had been approved by CMS. The new procedures required by CMS are extremely onerous. They require, in part, that an otherwise eligible child must wait 12 months after the termination of private insurance coverage before enrolling in SCHIP, with no exceptions for any reason, even the death of a working parent.

The case was filed in the United States District Court for the Southern District of New York by New York Attorney General, Andrew Cuomo, on behalf of the state.

“We continue to urge Congress to override the President’s veto, and we will continue to fight from both sides of the political spectrum to ensure that children get the health care they need,” said Governor Spitzer. “With the health of our nation’s children at stake, we will not stand by and allow the Bush Administration’s ideology to trample a program that has proven successful and is critical to children’s well-being.”