Dear Mr. Secretary:
We were very concerned to learn of your recent approval of the Michigan Section 1115Medicaid and State Children's Health Insurance Program (CHIP) waiver, which permits the state todivert funds designated by Congress solely for children's' health coverage to programs servingchildless adults. While we are all sympathetic to the need to expand coverage for childless adults,as you know, we continue to be extremely concerned that similar section 1115 waivers are in directconflict with Congress' intent in enacting the CHIP program. In addition, the U.S. GeneralAccounting Office has twice indicated that such waiver approvals may not be in compliance withthe statute.
Our bipartisan concern with your action stems from our respective roles as chief authors ofthe CHIP legislation and as the Chairman and Ranking Member of the Committee on Finance,which has jurisdiction over the program. We have an oversight responsibility to ensure that fundsset aside by Congress for certain purposes are spent on those purposes.
As you know, in adding CHIP to the Social Security Act, Congress explicitly specified thatCHIP allocations could only be used "to enable [States] to initiate and expand the provision of childhealth assistance to uninsured, low- income children in an effective and efficient manner." [SocialSecurity Act Section 2101(a)]. Note that the statute references children, not adults.
We find particularly weak the agenc y’s justification for this breach of congressional intent.In approving the Michigan waiver, the Administrator of the Centers for Medicare and MedicaidServices (CMS) wrote that the purposes of the Children’s Health Insurance Program would be metbecause coverage of childless adults would nonetheless "foster[] a broader awareness of health carecoverage in low- income communities, and... improv[e] the overall health of low-incomecommunities." He also pointed out that uninsured childless adults "can become parents at a futurepoint, and can be involved in decisions concerning children in the community." While we do notdoubt that these statements could be true, the connection they describe between a new healthinsurance program for adults and the health of uninsured American children is tenuous at best.Indeed, those vague statements could be used to justify using CHIP funds for a variety of purposesnot contemplated in the law, including education, child care, family planning and unemploymentinsurance. In brief, in enacting CHIP, Congress did not write the Department a blank check to usethese children’s health funds for other purposes.
As recent deficit projections point out, Federal funding is extremely constrained. Simplyput, using CHIP dollars for adults takes funding away from children. Through P.L. 108-78,Congress approved legislation to redistribute unspent CHIP funds to states that are eager and able tocover children through this program. As you know, the redistribution process allows states thathave spent their allotments on congressionally-authorized purposes to continue to enroll eligiblechildren in their programs. If CHIP funds are spent on childless adults, there will be less money toredistribute to states with robust programs for children. Our concern with limiting the availabilityof funds for redistribution is underscored by recent findings that over five million children who arefully eligible for low- income health programs are not yet enrolled in these programs and remainuninsured. Furthermore, projections show that federal CHIP allotments are expected to run out ineleven states in the next three years. Until all children in America who are eligible for CHIP havehealth insurance coverage, we do not believe that money should be diverted from the purposesspecifically set out when we passed legislation implementing this targeted, very successful program.For these reasons, we strongly oppose the Department's view that CHIP funds can be used toinsure adults without children at the cost of the health of low- income children. It is our continuedbelief that you are acting outside the scope of your waiver authority when you approve waivers thatdivert funds set aside by Congress for children to insure childless adults.
We appreciate your willingness to engage in an ongoing dialogue on the important issuesraised by waivers, and we appreciate your own commitment to increase accountability and integrityin the Medicaid and CHIP programs. We hope that you will view our stated concerns as anopportunity to work together to ensure that the integrity of the CHIP program is maintained and thatthe needs of the uninsured receive the highest attention. However, if legislation is needed to ensurethat the legislative intent of the Congress is not bypassed, we will redouble our efforts to clarify theCHIP law and raise the profile of this issue within the Congress to ensure that consider suchlegislation is enacted.
Finally, we thank you for your continuing attention to this very important matter, and welook forward to working closely with you to develop a plan for expanding health insurancecoverage to all Americans.
Sincerely,
Charles E. Grassley Max Baucus Edward M. Kennedy Orrin G. Hatch
