Editorial: Moving backward on children's health care

For the better part of a decade, Minnesota has made ingenious use of a federal program known as SCHIP to provide health insurance for infants, pregnant women and low-income parents who would otherwise fall through the cracks of the health care system.

Last month, with no warning and little explanation, federal authorities issued a letter with new rules that would almost certainly cut Minnesota off at the knees. The rules are unrealistic and unjustified --the result of a political battle between the Bush administration and Congress -- and Congress needs to countermand them now that lawmakers are back from the August recess.

The fight involves the State Children's Health Insurance Program (SCHIP), created by Congress in 1997 to help insure children whose parents don't qualify for Medicaid but can't afford private insurance. It has cut the number of uninsured children by one-third, and has been pronounced a success by several studies.

But now it's up for renewal. A large bipartisan majority in Congress wants to expand it; the Bush administration says it doesn't have enough money even to continue coverage at current levels.

The rules issued last month by the U.S. Department of Health and Human Services were plainly designed to accomplish by fiat what the administration could not do in Congress. Minnesota, for example, would apparently have to prove that its subsidized programs are not causing a measurable decline in employer-based coverage. But no state can prove that: Employer coverage is dropping in many states for many reasons quite beyond a state's control. Minnesota could also have to require that children go without health insurance for a year before enrolling in subsidized coverage. That's a terrible approach for a population where steady, preventive health care is vital.

Behind the new rules is a fear that public programs such as SCHIP are "crowding out" private insurance and reaching too far into the middle class. The fear is legitimate as a theoretical matter, but it simply doesn't square with the facts. Last week the U.S. Census Bureau reported that 2 million Americans lost private coverage in 2006 and none were picked up by public programs. In other words, employers are dropping insurance because they can't afford it, not because they want to dump their employees onto government programs. And as Gov. Ed Rendell of Pennsylvania told reporters last week, if working-class families could afford private health insurance, they would buy it.

A few weeks ago Gov. Tim Pawlenty joined 42 other governors in a letter urging Congress and the Bush administration to reauthorize SCHIP with adequate funding and the flexibility that states have used successfully in the past. That's the right strategy, and it's the one Minnesota's delegation should endorse.