Wealthy could get health benefits

Thousands of families who earn enough to pay a tax designed for wealthy Americans also would be eligible for government-subsidized health care for low-income children if proposals in the Democrat-controlled Congress become law.

In New York, almost 15,000 families who pay the alternative minimum tax would be covered under the healthcare program if the state’s plan to increase eligibility to those earning four times the poverty level — $83,000 for a family of four — is approved, according to an analysis by the Heritage Foundation, a conservative think tank.

“Only in Washington would you consider a family both rich and poor at the same time,” said Greg D’Angelo, a research assistant with the Heritage Foundation. “It’s the only place where one could be that creative.”

If every state raised its eligibility cap for the program to New York’s standard, then about 70,000 families nationwide who pay the tax — which applies to millions of households that make heavy use of certain tax breaks such as tax-exempt bonds and child credits — would be eligible.

The House and Senate last month passed bills to expand the State Children’s Health Insurance Plan, or SCHIP, to families earning several times the national poverty level. A conference to hammer out differences in the two versions is expected to begin this week.

The White House has threatened to veto both bills because of their hefty costs.

The Senate bill would expand eligibility in the program to families earning up to three times the national poverty level — about $62,000 annually for a family of four.

About 1.7 million children and a handful of adults enrolled in private health insurance plans would receive SCHIP coverage by 2012 under the bill, according to analysis of the program by the Congressional Budget Office.

“This bill essentially extends a welfare benefit to middle-class households,” stated a policy paper issued by the White House Office of Management and Budget.

The House bill would give SCHIP coverage to 1.5 million Americans who currently have insurance, the Congressional Budget Office says.

Both bills would allow states to seek waivers to exceed the eligibility caps in the legislation, provided that the states meet certain benchmarks ensuring that their poorest children are covered by the program.

Many states are expected to seek waivers for families earning three times or more above the national poverty level, thus extending SCHIP coverage to millions of middle-class Americans.

“If we just want to go to a government-run, socialized medicine, fine — this is it,” said Senate Minority Whip Trent Lott, Mississippi Republican, on the Senate floor last month. “I’ll be back in years to come and say: ’I warned ya.’ This thing is going to continue to grow.”

The Bush administration last month announced new rules that will make it more difficult for states to seek waivers. The policy includes a requirement that 95 percent of all children from families earning less than twice poverty level must first be enrolled in SCHIP or Medicaid before a waiver is granted.

Democrats have accused the president of obstructing the program, saying that locating and enrolling 95 percent of a state’s poorest families is almost a logistic impossibility.

State health officials in high-tax states such as New Jersey, which currently has the nation’s highest SCHIP income eligibility cap at 350 percent, or $72,275 for a family of four, say waivers are needed to keep pace with their state’s high cost of living.

More than 75 percent of the 122,525 New Jersey children receiving SCHIP assistance live in families earning no more than twice the federal poverty level — $41,300 for a family of four.

The median family income in New Jersey for a family of four is $90,261 — about $30,000 higher than the national median, according to the U.S. Census Bureau.

“Living in New Jersey, it’s a huge expenditure for a low-income family to have medical stability,” said Suzanne Esterman, a spokeswoman with the New Jersey Department of Human Resources. “This is a vital program in New Jersey.”

And SCHIP coverage isn’t free for everyone.

In New Jersey, only families at the lowest income levels escape paying monthly premiums and co-payments for doctor visits. Families earning 350 percent about the poverty level pay a $125 monthly premium, while families at the 300 percent level pay $74.50.

The House bill proposes a $50 billion spending increase for the program over five years, for a total of about $75 billion. The plan would add an estimated 5 million children to the 6 million already enrolled in the program, which expires Sept. 30.

The Senate version would spend an additional $35 billion over five years and would cover about 3 million children not currently enrolled.

To pay for the plans, House Democrats proposed a 45-cent-per-pack increase in the cigarette tax and cuts to the Medicare Advantage program.

The Senate version calls for a 61-cent-per-pack increase in the cigarette tax but no cuts to Medicare Advantage.