The Bush Administration will not crack down on states that are out of compliance with its controversial rules on state children's health insurance programs (SCHIP).
At least, not for now.
The Centers for Medicare and Medicaid Services (CMS) says it will not sanction states who expanded SCHIP coverage without meeting criteria set out in an August letter from CMS to state Medicaid directors.
"At this time, we are not taking compliance action," CMS wrote in response to an inquiry from the National Association of State Medicaid Directors. "We are determining whether the relevant states are in compliance with the existing requirements."
To cover youth in families that lived more than 250 percent above the poverty line before, the new rules require a state to ensure that 95 percent of its lowest-income youth were enrolled, a test that many state agencies viewed as impossible. The rules also require states to make children go uninsured for a year before switching between private and SCHIP-funded coverage.
The news undoubtedly came as a relief to officials in California, who said last week that they would not comply with the rules imposed in August. New York and New Jersey, as well as California, filed lawsuits hoping to avoid the rules as they expanded their programs to cover more families at higher income levels.
Other states, including West Virginia and Louisiana, have backed off plans to expand SCHIP because of CMS' August letter.