World and Nation

Moves to Insure More Children Face Possible Federal Obstacles

In the absence of federal action, governors and state legislators around the country are transforming the nation’s health care system, putting affordable health insurance within reach of millions of Americans in hopes of reversing the steady rise in the number of uninsured, now close to 47 million.

But the states appear to be on a collision course with the Bush administration, whose latest budget proposals create a huge potential obstacle to their efforts to expand coverage. While offering to work with states by waiving requirements of federal law, the Bush administration has balked at state initiatives that increase costs to the federal government.

State efforts have almost invariably begun with children, building on the Children’s Health Insurance Program, which is jointly financed by the federal and state governments. Many states are eager to expand eligibility for that program, and some are going far beyond the income levels deemed appropriate by the White House. In his budget last week, President Bush said he wanted to return the program to its “original objective” of covering children with family incomes less than twice the poverty level.

Sixteen states already cover children in families with incomes above 200 percent of the poverty level, and some want to go higher, even as the president seeks to reduce federal payments for children in families with higher incomes.

In New York, Gov. Eliot Spitzer, a Democrat, has proposed raising the state’s income limit to 400 percent of the poverty level, from 250 percent. A family of four is considered poor if its annual income is less than $20,650. Arizona and Wisconsin are also proposing raising income ceilings.

In California, as part of a plan to cover all state residents, Gov. Arnold Schwarzenegger, a Republican, proposed increasing the income limit for the children’s insurance program to 300 percent of the poverty level, from 250 percent.

Gov. Rod R. Blagojevich of Illinois, a Democrat, said Bush’s proposal “would seriously hamper the efforts of Illinois and other states” to ensure that all children have coverage — the goal of a state law he signed in November 2005.

The movement to expand coverage is by no means limited to children any more.

The National Conference of State Legislatures has reported: “Health care reform was hot in legislatures across the nation in 2006, and the forecast for this session may be even hotter. Fueled by the increasing number of uninsured Americans, the declining number of employers offering insurance to their employees, the improved fiscal conditions in the states and the lack of federal action, states are leading the way in health care reform.”

Officials cite a groundswell of state activity: Arkansas, Kentucky, Montana, Oklahoma, Rhode Island and Tennessee have new laws and programs to reduce the cost of insurance for small employers. Massachusetts and Vermont passed laws in 2006 to achieve universal or nearly universal coverage, while addressing the cost and quality of care.