The Bush administration adds restricting and distracting limits to the State Children’s Health Insurance Program when it sets new standards for coverage expansions and new caps on who gets coverage. The administration’s apparent goal is to prevent privately covered children from being switched to the federally supported coverage, but the cost it exacts to reduce this potential problem is too high.

With Congress in recess, after both the House and Senate passed significant expansions of SCHIP, the administration announced that before any state could expand coverage beyond the current 200 percent of the federal poverty level, it must enroll 95 percent of children below 200 percent. No state has ever reached that figure; Maine does very well by enrolling 90 percent of eligible children.

There was more. In order to demonstrate that SCHIP wasn’t siphoning off privately ensured children, states would have to show there had been no more than a 2 percent decline of those children in that coverage over the last five years. But the Congressional Budget Office has already examined this issue, concluding, for instance, that 66 percent of the new enrollees in the Senate-passed bill would come from the uninsured; the 34 percent that had some form of private coverage is a consequence of having a fragmented system of partial coverage and underinsurance. (Compare the 34 percent figure with the crowd-out number for the president’s health-insurance tax proposals, in which 77 percent of the benefits would go to those who already have coverage.)

SCHIP provides Maine with a $3-to-$1 match to cover children. Unlike many other states, Maine covers children up to only 200 percent of the poverty line, so would be affected by the president’s proposal only if it tried to expand its coverage. The program, which often includes means-tested premiums, co-pays and deductibles, gives children access to health care they otherwise would not have. It gives kids from families with lower incomes a chance to compete with families that have health care.

The choice policymakers must face is whether the shift from private to public funding among a minority of children is worth covering many more who otherwise would not get coverage at all. It’s not an absolute choice, but an incremental one – given the current, inefficient, expensive system of health care in this country, at some point along the income line, taxpayers cannot be expected to add to their costs by picking up the cost of children’s care when their parents could afford it.

But telling a parent with an annual income of $36,000 or $38,000 that she’s too rich to receive help to pay insurance costs for her kids is not where Congress should want to draw the line. When members of Congress return from their August recess they should start working with the administration to find ways to expand care affordably.

Punishing working-class families to protect the insurance industry is not good policy and shouldn’t be acceptable in Washington.