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Clinton health program backfires

A federal children’s health insurance program has such stringent
regulations that states involved in the plan are unable to get their
spending plans approved by the government, resulting in denial of
health-care coverage for millions of poor children — the very purpose
of the program.

Meanwhile, as the November presidential election draws near, the
Clinton-Gore administration is trumpeting the $24 billion, 10-year
program as being among its

greatest accomplishments.

Documents from the federal government obtained by WorldNetDaily show that in just a few weeks, states will lose almost $2 billion in federal money set aside for the program due to a failure to meet strict Clinton administration guidelines.

The loss of money by the states has already become an issue in the presidential race, with Vice President Al Gore attacking Texas Gov. George W. Bush and his administration for not spending $449 million of the funds set aside for uninsured children. But critics are responding that the Clinton-Gore administration may be more to blame than Texas lawmakers for not using the money.


State Children’s Health Insurance Program
was developed by Hillary Clinton and her health-care advisors in the wake of the devastating political loss of her national health-care system campaign in the first term of the Clinton-Gore administration. The intent of SCHIP was to expand public health insurance programs, particularly Medicaid, to cover children under 200 percent of the Federal Poverty Limit that did not meet traditional Medicaid coverage requirements.

Backed by organizations pushing for a universal health-care system, such as the

Children’s Defense Fund,
legislation authorizing the program was sponsored by Sen. Orrin Hatch, R-Utah, and Sen. Ted Kennedy, D-Mass., and passed as part of the Balanced Budget Act of 1997.

But several years after Congress approved the SCHIP program, many states are unable to draw down funds for the program in part because officials from the Health Care Financing Administration who oversee the program delayed approval of many state programs, preventing them from utilizing the money.

Another reason states are failing to spend the federal money is that they are finding it difficult to locate children in need of the benefit. While the Clinton administration anticipated covering an additional 5 million children through the SCHIP program, Health and Human Services Secretary Donna Shalala admitted recently that less than 2.5 million children have been enrolled.

Due to these factors, states are spending less than 20 percent of the money Congress allocated to them for the SCHIP program. According to documents obtained by WorldNetDaily, 41 states will lose more than $1.9 billion for their 1998 SCHIP allotments on Sept. 30 as a result of the states’ inability to get their programs up and running in time. During 1998, 32 states were not able to spend any of their designated SCHIP allotments.

Other problems with the SCHIP program have also developed. WorldNetDaily

recently reported
that a

new study
by the Center for Studying Health System Change found that the SCHIP program has resulted in millions of low-income children being forced off their private insurance coverage as employers look to shift health-care costs to taxpayers.

The study also shows that there has been no net reduction in the percentage of children that are uninsured. Thus, the SCHIP program may be exacerbating the problem it was designed to solve, calling into question the success of the program that the Clinton-Gore administration is heralding as one of its biggest success stories.

Critics say it is the Clinton administration’s use of the program as a back door for the first lady’s failed national health-care system that is at the heart of the problem of states losing their SCHIP allotments. The administration advocated for expansion of state Medicaid programs under SCHIP to enlarge the prospects for universal health-care coverage, rather than allowing states to experiment with less-costly public and private initiatives to cover uninsured children. Many states were reluctant to pursue Medicaid expansion because federal rules and coverage requirements make Medicaid coverage very expensive, frequently at a greater cost than private insurance plans.

Grace-Marie Arnett, president of the

Galen Institute
— a not-for-profit research and education organization that focuses on free-market tax and health-care reform initiatives — told WorldNetDaily that the unused SCHIP money is a testament to numerous obstacles that the Clinton administration erected for states who wanted to assist uninsured children, but didn’t want to use Medicaid as the vehicle to do it.

“The Clinton administration threw up roadblocks for the states all along the way. There are so many options that states could use to solve the problem of uninsured children, but most haven’t been tried because of the inflexibility of HCFA (the Health Care Financing Administration) trying to use SCHIP to expand the Medicaid entitlement program,” Arnett said. “Their determination to expand a government entitlement program under the guise of helping the children has backfired.”

The statistics from HCFA verify Arnett’s contention that Medicaid expansion was the real goal of the program, not covering uninsured children. Of the 14 states that did not use Medicaid to cover uninsured children, only one state, North Carolina, was able to use all of its funds. Those states will collectively lose $315 million once the Sept. 30 deadline passes. On the other hand, four of the eight states that used all of their SCHIP allotment used Medicaid programs exclusively to cover uninsured children.

Jim Frogue, a health-care policy analyst with the

told WorldNetDaily that the unused money demonstrates that the federal government needs to loosen the strings for states to draw down the funds.

“If the federal government is going to provide this money, the states should be allowed to experiment with a number of options, not just rely on Medicaid expansion,” Frogue said. “The money should be made available to states as block grants without strings attached. But as long as HCFA is reluctant to approve state plans that don’t use Medicaid, the ability to experiment with these options will be very limited.”

In a perverse twist, Mary Khan, a spokesperson for HCFA, told WorldNetDaily that the money forfeited by those states that were unable to use their allotments will be given to the nine states that overspent their SCHIP allotments.

“This is nothing short of showering states with more money as a reward for their inefficiency,” said Frogue.

The dilemma of states losing the federal money is particularly felt in California and Texas, where 29 percent of all uninsured children in the country live. According to the HCFA documents, California is scheduled to lose $590 million and Texas another $449 million after using less than 25 percent of the money allotted by Congress.

Texas was particularly hampered in its efforts to establish a program because the state legislature, which meets only biennially, did not even convene until more than a year after Congress authorized the program. The loss of funds for 1998 was compounded by HCFA’s waiting until June 15, 1998, to authorize the Texas plan, leaving the state only three months in the federal fiscal year in which to use any SCHIP money. Consequently, Texas was able to use only $1.3 million of its 1998 SCHIP allotment.

In response to the call from state health-care officials, Sen. Lincoln Chafee, R-R.I., introduced a bill in April to give states another two years to spend the money, but supporters admit that the bill is likely to die in the Senate Finance Committee when Congress adjourns in October.

Related story:

Kids losing private health insurance