October 10, 2007

SCHIP Income Eligibility: $100K, $120K ….. Hey, It Looks Like the Sky’s the Limit!

Filed under: Health Care,Taxes & Government — Tom @ 9:43 pm

Or, Maybe We Should Rename It the Government-Paid Health Plan for Paris Hilton’s Kids

It looks like SCHIP expansion opponents owe an apology to fellow Wide Open blogger Jeff and all the other libs and leftists who support it.

You see, we apparently haven’t been telling the truth when we’ve claimed that families with incomes as high as $80,000 a year could qualify under the program.

We were wrong, and we are sorry.

You see, depending on what type of income is involved, the threshold is much higher. It may even be true that in all but a few states, there is no upper limit.

Democracy Project’s Bruce Kesler made the point earlier today (HT Michelle Malkin) as he investigated California’s SCHIP program (bolds are mine):

I just phoned California’s SCHIP program, Healthy Families, and found that my family could qualify.

This is the scenario I laid out:

  • Husband, age 62 (which I’ll be in 2-years), collecting early Social Security; Wife, age 41;
  • Two minor dependent children, ages 2 and 7;
  • ….. Mutual fund capital gains of $50,000 and ordinary dividends of $30,000;
  • Earned income of $2289 a month by wife at job without medical benefits.

….. Thus, even though having substantial liquid assets, saved through a lifetime of scrimping in order to fund retirement, I would qualify for California’s Healthy Families SCHIP program. Assets and unearned income (e.g., Social Security, capital gains, ordinary dividends) do not count against SCHIP qualification.

Yes, the exercise was theoretical, because Bruce is two years away from 62, and his wife is two years away from re-entering the workforce. But when that happens, their kids and (if I’m interpreting correctly) the couple themselves would be SCHIP-eligible under current law, even before considering the expanded nonsense the President Bush just vetoed.

For those keeping score, Kesler’s income as described would be:

  • $80,000 in investment returns — not considered income by SCHIP.
  • Social Security benefits of at least $12,000 a year (probably more) — not considered income by SCHIP.
  • Roughly $27,000 in wages earned by Mrs. Kesler — the only item of the three considered income by SCHIP.

That’s at least $119,000 in income (27 + 12 + 80); yet the Keslers qualify (though Mr. Kesler has quite eloquently stated why he won’t apply).

In California, then, it appears (based on Democracy Project’s inquiry) that there’s nothing stopping a trust fund baby, if their ONLY income comes from investment returns (i.e., it’s “unearned”), from qualifying for SCHIP! Paris Hilton and Nicole Ritchie could sit at home and stop boring us with their TV show, appearances, and commercials, have babies by any number of entourage members, and join in the SCHIP party. Is this a great country or what?

Seriously folks, 46 states and the District of Columbia (HT Democracy Project) do not have an asset test for SCHIP (see “UPDATE for mind-boggling detail” below). It seems likely that they, like California, as Kesler has just shown, don’t include “unearned” income either. Such laxity in regards to assets and “unearned” income may also be present in some or all of these states’ much larger Medicaid programs.

This is nuts.

How about we fix what’s broken in SCHIP and Medicaid before embarking headlong on an ill-advised expansion? President Bush was right to veto SCHIP; the minority in Congress will be right should they sustain it.

Meanwhile, I hope Jeff and other SCHIP advocates accept our sincere apologies for underestimating just how messed up the existing system that is supposed to be delivering health care to the poor really is.

Cross-posted at Wide Open.

_________________________________

UPDATE for Mind-Boggling Detail, Oct. 11: Let’s start with the 50 states and work backwards from the Kaiser link pointed to by Democracy Project (limits noted are for a family of 3, per Kaiser) –

  • Texas has a meaningful asset test — “In Texas, the SCHIP asset test applies only to families with income above 150 percent of the federal poverty line. There is a $2,000 asset limit for Medicaid and a $5,000 asset limit for separate SCHIP program.” I would argue that this one seems a bit harsh, but without seeing the definition of “asset,” one can’t be sure. 49 states remain.
  • Utah is described as having a Medicaid test, but no SCHIP test is indicated, even though there is a separate SCHIP program. Same goes for Montana. Still at 49.
  • Rhode Island “has adopted a $10,000 asset limit, however no implementation date has been set. No separate SCHIP program.” If it’s not implemented until sometime “out there,” it doesn’t exist. Still at 49.
  • Oregon has “a $10,000 asset limit for separate SCHIP program.” Make that 48.
  • Missouri “has eliminated the asset test for children’s “regular” Medicaid. Children in the Medicaid expansion group are subject to a “net worth” test of $250,000. No separate SCHIP program.” That’s a pretty loose and limited test (ridiculously loose if tax-deferred retirement accounts are excluded), but that takes it down to 47.
  • South Carolina is described as having a $30,000 asset limit for Medicaid; it’s unclear from the table whether there’s a separate SCHIP program. Without further investigation, this is a “not sure.”

There are no other indications at the Kaiser link of asset tests for SCHIP or Medicaid programs. So, based on the Kaiser information, 46 or 47 states don’t have an asset test.

Note that this does NOT address the definition of “income.” As noted above, Democracy Project reported that “unearned” income isn’t considered “income” for eligibility purposes in California.

Other states could be more all-inclusive in their definitions of “income.” For example, Ohio, which doesn’t have a separate SCHIP program with its own set of rules, does pick up “unearned income” as part of “countable income” (type the word “countable” into your browser’s find feature at the link). But it’s also worth noting that “Resource limits” don’t apply to the “Low Income Family (LIF) group.” There otherwise appear to be resource tests for eligibility outside the LIF group, but they specifically exclude retirement accounts (with the apparent exception of what can be withdrawn without penalty). This means that any “income” within the retirement accounts (capital gains, dividends, and interest) is not considered.

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5 Comments

  1. [...] Large numbers of these adults, also growing in number, are by no sane definition “working poor.” As Tom Blumer at BizzyBlog points out: In California…it appears that there’s nothing stopping a trust fund baby, if their ONLY income comes from investment returns (i.e., it’s “unearned”), from qualifying for SCHIP! Paris Hilton and Nicole Ritchie could sit at home and stop boring us with their TV show, appearances, and commercials, have babies by any number of entourage members, and join in the SCHIP party. Is this a great country or what? [...]

    Pingback by Michelle Malkin » My reply to Respectable Liberal Blogger Ezra Klein and his fellow travelers — October 11, 2007 @ 12:09 am

  2. [...] By the way, in Mexifornia, the sky’s the limit to qualify for BullSCHIP. Tom Blumer at BizzyBlog points out that families with income in excess of $100,000 or more can qualify for BullSCHIP. In California, then, it appears (based on Democracy Project’s inquiry) that there’s nothing stopping a trust fund baby, if their ONLY income comes from investment returns (i.e., it’s “unearned”), from qualifying for SCHIP! Paris Hilton and Nicole Ritchie could sit at home and stop boring us with their TV show, appearances, and commercials, have babies by any number of entourage members, and join in the SCHIP party. Is this a great country or what? [...]

    Pingback by CHILDREN AS HUMAN SHIELDS « Texas Hold ‘Em Blogger — October 11, 2007 @ 11:32 am

  3. I’m going to suggest that conservatives take your cue and start referring to the SCHIP expansion as “ParisCare.” It’s catchy. I like it.

    Comment by Mike — October 11, 2007 @ 6:50 pm

  4. Another BizzBlog classic!

    Along the same line, a while back I posted on the proposed expansion of SCHIP by one advocate in Denver and noted:

    …Ms. Susan Molina of Denver (the single-mother, activist and subject of the Ms. Rovner’s NPR report) has testified before Congress and supports benefits for families up to 300% of the federal poverty guidelines (see Table: 2006 HHS POVERTY GUIDELINES) of $16,600 for a family of 3. With that policy, a family like Ms. Molina’s (1 parent, 2 children) would be eligible for assistance while still having an income up to $49,800 (300% of $16,600).

    $49,800 is more than the $47,250 the Economic Policy Institute found (see figure B and Table 1) would be needed for the basic budget of a family of 4 (2 parents, 2 children) in Denver, Colorado which includes health care!…

    Comment by Porkopolis — October 11, 2007 @ 10:37 pm

  5. #3, I like that ParisCare idea. Would hope it catches on.

    Comment by TBlumer — October 12, 2007 @ 7:27 am

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