1. National: Unexpected Turn for Kids Health Bill The modest spending increase that Congress approved for a popular children's health insurance program will maintain coverage for those already enrolled. But many lacking health insurance will have to look elsewhere. Few expected such a result when 2007 began. Democrats proposed a huge spending increase on the federal-state partnership known as the State Children's Health Insurance Program (CHIP). Many Republicans embraced the idea. Meanwhile, states all over the country were drawing up plans to expand health coverage. A lot of those plans have been scuttled. The spending increase most lawmakers supported has been vetoed twice by President Bush, who balked at the $35 billion price tag and method of payment--a tobacco tax. "We were all very, very hopeful. Now, we feel like they are farther apart than they were a year ago," said Cindi Jones, who oversees Virginia's CHIP. Virginia was one of several states going into the year thinking about expanding eligibility limits for CHIP. It's a typical state in that it provides health coverage for families with incomes up to twice the federal poverty level--$34,340 for a family of three. Jones said officials considered moving the eligibility limit to at least $42,925. "This just didn't seem like the right time to raise the eligibility with the uncertainty of what's going on at the federal level," Jones said. Lawmakers across the state line in West Virginia approved an expansion that would have raised the eligibility level to $51,510 for a family of three. It's now at $37,774. The increase would have led to about 4,000 more children getting coverage. "That potential growth is on hold," said Sharon L. Carte, who oversees West Virginia's program. Some analysts say the number of children getting CHIP coverage may still decline next year--a bitter prospect for Democrats who promised they would expand enrollment from 6 million children to 10 million. "We are left with a package that addresses the most immediate concerns, but leaves any real health care improvements for another day," Rep. Frank Pallone, D-N.J., said during last week's CHIP debate. "I think that is very unfortunate." Republican lawmakers say they want to work out a compromise. But many are satisfied with the extension the House approved Wednesday. Republican leader John Boehner, R-Ohio, said the extension "provides all the resources necessary to cover low-income children who need quality health insurance." Republicans say any expansion should not allow middle-income families to drop private coverage for the public kind. They insisted that CHIP retain a new Bush administration directive that makes it harder for states to cover middle-income children. Democrats criticized the directive for months. They promised to rescind it, but failed. The directive said that before states cover higher-income children, they must meet the following threshold: At least 95 percent of children eligible for Medicaid and CHIP with incomes less than twice the poverty level must be enrolled in those programs. Many states say meeting that threshold is nearly impossible. But that's not all the directive said. Even if states meet that threshold, the middle-income children will have to go without private coverage for a full year before they can enroll in CHIP, and their families will have to pay premiums or co-payments that are 5 percent of their income. The directive will affect about half the states. Fourteen are already covering children above $42,925 for a family of three and 10 more were planning to do so, says the Center for Children and Families at Georgetown University. One of those states, California, is considering a proposal that would require all Californians to have health insurance coverage, but a central piece of that proposal also increases the threshold for CHIP eligibility--from the $42,925 level for a family of three to the $51,510 level. Cindy Mann, the center's executive director, said she believes the administration's directive means fewer children will get health coverage through CHIP next year. "It's definitely a step backward from where we started in 2007," Mann said. "We would have seen growth in the program. We're not going to see that growth, and by August, we'll start to see a ratcheting down." Overall, about 9.4 million children ages 18 and under are uninsured, according to the Census Bureau. Bush administration officials say the directive will require states to do the hard work of finding and enrolling poor kids before they move on to less needy families. Health and Human Services Secretary Mike Leavitt said the administration believes the government has a role in providing health coverage to the elderly, poor and disabled. "The CHIP question was: Who do we consider to be in that category," Leavitt said. Lawmakers from both parties say that when they return in January, they will try to work out a compromise on CHIP. Differences over who should get coverage have clearly narrowed over the past months. But differences over how to pay for expansion remain considerable. The president has said a tax increase is a deal-breaker. Democrats, meanwhile, say the same thing about cutting Medicaid and Medicare. "We'll certainly reach out, but it's going to be hard because they do challenge the basic premise that there are these additional kids that need to be covered," Pallone said. "And they don't seem to want to come up with a way to pay for the coverage." The administration says the president recommended $96 billion in spending reductions in his last budget. Lawmakers can choose from that list. [Kevin Freking, Associated Press, 12/26/07] 2. New York: Insure More Children Despite Veto The Spitzer administration is likely to press ahead with its plan to extend subsidized health care coverage to children in families earning more than $80,000 a year, sources said, despite President Bush's veto of a bill that would have had the federal government pay for such coverage with an increase in the federal tax on cigarettes. Facing an uphill legal battle to force the Bush administration to allow New York to provide subsidized health care to children in families with incomes of up to four times the federal poverty level, Governor Spitzer is signaling that he intends to expand coverage even without federal assistance. In recent weeks, the Spitzer administration has moved closer to the position that it would rather foot the bill itself than wait out a legal and appeal process that may not even succeed. Hopes that Congress would come to the rescue have faded, with Mr. Bush successfully defeating attempts by federal lawmakers to expand the federal State Children's Health Insurance Program and ease eligibility requirements. Mr. Spitzer is now leaning toward having New York pay its own way, a move that many health care advocates in the state have strongly urged. The loss of federal support would cost New York $25 million to $30 million in the first year--money that would likely come out of other parts of the health care budget. Albany is contending with a more than $4 billion deficit. "It's under consideration because we believe the expansion is absolutely critical to the governor's efforts to reach every child in this state," Mr. Spitzer's Medicaid director, Deborah Bachrach, said in an interview. "Our backs are against the wall because the federal government and Congress haven't been able to act." [Jacob Gershman, The New York Sun, 12/27/07] 3. Arizona and Kentucky: Effects of CHIP Premiums In a Health Services Research Paper titled "Assessing Potential Enrollment and Budgetary Effects of CHIP Premiums: Findings from Arizona and Kentucky," Genevieve Kenney, James Marton, Joshua McFeeters, and Julia Costich examined the impact of premiums on disenrollment and reenrollment in the Arizona and Kentucky CHIP programs. In both states, they found that when premiums were introduced, higher disenrollment and lower reenrollment in premium-paying CHIP were observed for children who had been in the program before premiums were implemented. They also found that many of these children left public coverage altogether and did not seek coverage in other public programs such as Medicaid. The authors conclude that imposing nominal premiums may reduce state spending on CHIP, but projected savings may be small relative to total state CHIP spending. Further, if these children become uninsured, spending on other public coverage programs or uncompensated care costs would increase offsetting any CHIP savings. Objective. To assess whether new premiums in CHIP affect rates of disenrollment and reenrollment in CHIP and whether they have spillover enrollment effects on Medicaid. Principal Findings. In both states, the new premiums increased the rate of disenrollment and decreased the rate of reenrollment in premium-paying CHIP among the children who were enrolled in those categories before the premiums were implemented. The competing hazard models indicated that almost all of the increased disenrollment is caused by recipients leaving public insurance entirely. The time-series models indicated that the new premium reduced caseloads in premium-paying CHIP, but that it might have increased caseloads for other types of public coverage. The amount of premiums collected net of the costs associated with administering premiums is small in both states. Estimating the full budgetary effects with certainty was not possible given the imprecision of the key time-series estimates. Conclusion. These results suggest that the new premium reduced enrollment in the premium-paying group by 18 percent (over 3,000 children) in Kentucky and by 5 percent (over 1,000 children) in Arizona with some of these children apparently leaving public coverage altogether. While most children enrolled in these categories did not appear to be directly affected by the imposition of $10–$20 monthly premiums, the premiums may have caused some children to go without health insurance coverage which in turn could have adverse effects on their access to care. Imposing nominal premiums may reduce state spending, but projected savings appear to be small relative to total state CHIP spending and resulting increases in enrollment in other public programs and in uninsurance rates could offset those savings.