According to the Star Tribune, the administration buried the $135 million budget cut “in a 29-page document outlining federal changes affecting the state’s subsidized health program,” MinneostaCare:
Most of those affected are parents of children who have been enrolled in the state children’s health insurance program (known as SCHIP)…The Bush administration’s opposition to covering parents with children’s health program funds, a practice used by Minnesota and a half-dozen other states that have their own programs for children’s health coverage.
The Bush administration argues that by denying coverage to parents, they can cover more low-income children. But a growing body of evidence shows that “expansions of parents’ coverage lead to enrollment gains among children.” In fact, “states that have expanded Medicaid coverage for low-income parents have experienced significantly greater gains in enrollment among eligible children than states that did not expand parents’ coverage.”
From a report by the Center for Policy and Budget Priorities:
Families USA also estimates that reducing federal funds to Medicaid acts “like a giant anti-stimulus package” that will lead to a loss in jobs and wages and “will force governors and state legislators to make increasingly difficult choices about providing state services.”