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The real goal of SCHIP

Posted by Richard on October 5, 2007

About six years late, President Bush finally vetoed a bloated spending bill — the massive 140% expansion of the State Children's Health Insurance Program (SCHIP) passed by the Democrats (Bush had proposed "only" a 20% expansion). As you might expect, there were plenty of Republican senators who voted with the Dems — enough to override the veto. But on the House side, it fell a couple of dozen votes short of a veto-proof majority, so Dems are mounting a major effort to swing more squishy Republicans, with my congresscritter, Dianne DeGette, leading the way

It's a particularly egregious fraud of a program, promoted as helping poor sick children (who doesn't want to help poor sick children?). But the "children" are up to 25 years old and not very poor — and the majority were already insured (emphasis added):

Under SCHIP, the taxpayers fund health coverage for children in families of four earning as much as $72,000 per year, though not all eligible families enroll. Democrats in Congress want to open the program to families of four earning $83,000 per year or more. President Bush is OK with expanding SCHIP to cover well-off families – but only if the states enroll 95 percent of those lower-income children first.

Yet SCHIP is senseless. Like its much larger sibling, Medicaid, the program forces taxpayers to send their money to Washington so that Congress can send it back to state governments with strings attached. Both programs force taxpayers to subsidize people who don't need help, discourage low-income families from climbing the economic ladder – and make private insurance more expensive for everyone else.

SCHIP casts a much wider net than suggested by its stated purpose – namely, providing coverage to children in families that earn too much to qualify for Medicaid (which ostensibly serves only the poor) but still can't afford private insurance. According to a study in the journal Inquiry, 60 percent of children eligible for SCHIP already had private coverage when the program was created.

Inevitably, many families simply substitute SCHIP for private coverage. Economists Jonathan Gruber of MIT and Kosali Simon of Cornell University find that, in effect, when government expands eligibility for SCHIP and Medicaid, six out of every 10 people added to the rolls already have private coverage. Only four in 10 were previously uninsured.

The financing of this massive 140% expansion is also egregious. First, the proponents are, in the time-honored tradition of all entitlement expansions, grossly underestimating the long-term costs. Second, they claim that they're "paying for it" with a 156% increase in the cigarette tax, but:

… according to the free-market Cato Institute, even that won't be enough. Americans have been slowly kicking the cigarette habit in recent decades. But to fund SCHIP at its expected expenditure levels in 2020 would require some 22 million new smokers.

Of course, there won't be 22 million new smokers. That means a rise in general taxes — not on smokers, but on you.

This is what the Democrats have mastered: creating a phony need, then proposing a tax on someone unpopular to fix it. When taxes don't come in as expected, they raise taxes on everyone.

It should be noted that SCHIP was initially enacted in 1997 with lots of Republican support (there are always plenty of Republicans eager to demonstrate how compassionate they are in the vain hope that liberals will like them more). And you have to marvel at the folks in Washington of both parties, who see no problem with enacting a State Children's Health Insurance Program at the federal level. 

But the SCHIP program was a Democratic idea, and according to a recent Politico article, specifically a Clinton staff idea with a hidden long-term goal (emphasis added):

Back in 1993, according to an internal White House staff memo, then-first lady Hillary Rodham Clinton's staff saw federal coverage of children as a "precursor" to universal coverage.

In a section of the memo titled "Kids First," Clinton's staff laid out backup plans in the event the universal coverage idea failed.

And one of the key options was creating a state-run health plan for children who didn't qualify for Medicaid but were uninsured.

That idea sounds a lot like the current State Children's Health Insurance Program, which was eventually created by the Republican Congress in 1997.

"Under this approach, health care reform is phased in by population, beginning with children," the memo says. "Kids First is really a precursor to the new system. It is intended to be freestanding and administratively simple, with states given broad flexibility in its design so that it can be easily folded into existing/future program structures."

The Clintonistas, already salivating at the prospect of returning to the White House in January 2009, are no doubt also already planning those "future program structures" for health care. A big expansion of SCHIP now would be helpful when it's time for the next phase. Plus, it would further weaken the Republican Party's tattered remnants of a principled opposition to complete government control of health care.

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3 Responses to “The real goal of SCHIP”

  1. Hathor said

    This hasn’t happened, so how do they come up with statistics?

    Some employee insurances cover children to 23, as long as they are in college.

    Maybe not in your world, but it is possible for the family income to be 84,000 without either parent being covered by insurance. In retail and sales the number of hours qualify you for coverage and its part time including 39 hours. Or some could just be working for a staffing company. I can’t say myself, but the disposable income those families thought to have: the cost of raising two children might just suck that up. Heaven help you, if you have an adventurous child and the emergency room becomes a second home.

  2. rgcombs said

    Read it again. The program has been in place since ’97, so there’s data. This is just a little 140% expansion.

    A family with an $80k income can buy their own damn insurance.

  3. Hathor said

    Are you buying yours and do you know how much your policy cost and with each extra dependent? This should include your contribution and co-pays for doctors visits. Also can you tell me if you insured your self and your family would you pay more or less than your employer? Statistics don’t always tell you every thing, because you can never know the reasons why you may be in the first standard deviation and another in the third.

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