N.Y. is denied on health program

In a decision that could set a precedent for California and other states but also generate sharp resistance, the Bush administration on Friday denied New York’s request to expand a popular children’s health insurance program to reach some uninsured middle-class families.

The ruling by the Health and Human Services Department sent a clear signal that the administration intends to enforce a new policy aimed at refocusing the State Children’s Health Insurance Program on the children of the working poor. The program operates as a partnership with the states, and in the past, administration officials had allowed some states to cover some middle-class children, and even some adults.

However, it’s unclear whether the administration will be able to get very far with its new limits. The House and Senate recently passed bills to expand the program, and leading lawmakers are vowing to block the latest administration restrictions. Many governors also oppose them.

“It is clear the administration is spoiling for a fight, and it’s unfortunate [President Bush] has chosen children’s healthcare,” said Rep. Charles B. Rangel (D-N.Y.), chairman of the House Ways and Means Committee, which plays a central role in healthcare.

In California, where the program is known as Healthy Families, Gov. Arnold Schwarzenegger and Democratic leaders in the Legislature want to cover uninsured children in families that earn up to about $60,000 for a family of four.

That would be well above the administration’s cutoff mark of 2 1/2 times the federal poverty level, or about $50,000. Program defenders say the higher limits are needed in states such as California and New York, where living costs are higher than average.

“The administration through its [policy] is having a chilling effect on a number of states, so it definitely would have an effect on California,” said Edwin Park, an analyst with the Center on Budget and Policy Priorities, a liberal group that advocates for the poor. “Whether or not California’s healthcare reform is done, child advocates in the state have been saying they still want to see this expansion enacted.”

New York officials wanted to expand their program to cover uninsured children in families up to four times the poverty level, or about $80,000 for a family of four.

But the administration has placed high hurdles in front of states seeking such expansions. They must prove that they have insured 95% of low-income children and must impose a one-year waiting period for middle-class youth, among other requirements.

“New York has not demonstrated that its program operates in an effective and efficient manner with respect to the core population of targeted low- income children,” Kerry Weems, acting administrator of Medicare and Medicaid, wrote in denying New York’s request. The administration is concerned that increasing numbers of middle-class parents will drop coverage for their children to get on the government program.

States that cover some middle-class children could be forced to drop hundreds of thousands from the rolls if the policy remains in place, academic experts say.

“I guarantee you we’ll have a bill to correct that,” said Rep. Pete Stark (D-Fremont), chairman of a key House healthcare panel. “It just seems to me that one is so universally unpopular, we’ll find a way.”

The children’s health insurance program covers about 6 million youths whose parents make too much to qualify for Medicaid but too little to afford private coverage. It will expire Sept. 30 unless Congress and the president renew it or approve a temporary extension.

ricardo.alonso-zaldivar@ latimes.com