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Arizona joins suit against Bush over kids' health care

By HOWARD FISCHER
Capitol Media Services
Tuesday, October 02, 2007

PHOENIX -- Arizona and at least seven other states are asking a federal judge to overturn new regulations by the Bush administration limiting the growth of the federal children's health program.

The lawsuit charges that the administration illegally changed the rules of the State Children's Health Insurance Program without going through the required procedures. Those changes will make it more difficult for states to expand their programs to cover children in families earning less than 250 percent of the federal poverty level, about $51,625 for a family of four. Those changes currently have no effect Arizona, where the Legislature has refused to expand the program here, known as Kids Care, beyond 200 percent of the federal poverty level. In fact, the proposal earlier this year by Gov. Janet Napolitano did not even get a hearing.

But gubernatorial press aide Jeanine L'Ecuyer said the political conditions might someday exist where Arizona might want to enroll more children.

And L'Ecuyer said Arizona is adding its weight to efforts to convince a federal judge to overturn those Bush administration rules because "it's the right thing to do."

The federal Medicaid program -- known as the Arizona Health Care Cost Containment System here -- provides free care to anyone in families making below the federal poverty level. That translates to $20,650 for a family of four.

S-CHIP covers children in families above that income level, with the federal government providing $3 for every state dollar.

States have been allowed to have eligibility as high as 350 percent of the federal poverty level, more than $72,000 a year for a family of four.

Arizona's Kids Care program, with its 200 percent cap, covers about 65,500 children in families who earn up to twice the poverty level. Napolitano had sought to take it to 300 percent.

The new administration rules, in essence, effectively limit the programs to 250 percent of the federal poverty level by imposing new requirements on states that want to go above that.

Tim Nelson, the governor's chief legal adviser, said the states who are suing contend the administration did not follow the legal requirements for changing the regulations. That includes seeking public input.

Nelson said that, technically speaking, Arizona will not be a full-fledged plaintiff in the lawsuit. Instead, he said Arizona will provide legal briefs in support of the leading states including New York and New Jersey.

The litigation comes as the Democrat-controlled Congress is fighting with the administration about how much money to allocate to continue -- and potentially expand -- the program.

Bush has asked for a $5 billion increase over the next five years. But the Congressional Budget Office has argued it will take $14 billion just to keep the program operating at current levels.

And congressional Democrats are pushing for at least $35 billion more to expand the program, financing that with higher tobacco taxes.

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