And they have.
By requiring states to cover lower-income children first.
In the letter sent to state health officials about 7:30 p.m. on Friday, Dennis G. Smith, the director of the federal Center for Medicaid and State Operations, set a high standard for states that want to raise eligibility for the child health program above 250 percent of the poverty level.
Before making such a change, Mr. Smith said, states must demonstrate that they have “enrolled at least 95 percent of children in the state below 200 percent of the federal poverty level” who are eligible for either Medicaid or the child health program.
The reason why is very simple; as the 2007 Congressional Budget Office(CBO) report on SCHIP showed, while SCHIP has reduced the number of uninsured children in its target demographic (for families who make between 100% - 200% of the Federal poverty level) from 22.5% to 16.9%, it has also reduced the number of families opting for private employer-sponsored coverage for which they are eligible. Estimates are that, for every 100 children enrolled in SCHIP, approximately 25 to 50 are kids who are taken out of existing private coverage and put into SCHIP because it's cheaper and/or the benefits are better.
To put this into perspective, 250% of the Federal poverty level is $51,625. The US median household income, as of 2006, is $46,236; thus, even with this change, over half of the households in the United States would be theoretically eligible for their kids to receive what amounts to free or heavily-subsidized health insurance.
What Democrats and liberals have done is to backdoor the SCHIP program; they have used an exceptions process built into the original law to extend coverage to even higher income levels and to families who already have and can afford health insurance, even as participation for those families who don't have it and can't afford it has stagnated.
In short, they've blown off expanding coverage for poor kids so that they can buy wealthier ones' parents -- and gone back to Congress to demand more money to do it.
I am four-square behind the administration on this one. SCHIP should do what it was meant to do in the first place -- provide health insurance coverage to kids in working families that didn't have access to it and couldn't afford it. To me, the fact that the Democrat Party absolutely balks at requiring a program to actually cover the poor first before subsidizing wealthier families is the height of hypocrisy -- and shows that Hillary, Spitzer, and the innumerable other Democrats who whine about covering the children are lying through their teeth.