A decade ago, SCHIP's supporters sold the program as a way of providing health coverage to children whose parents could not afford it but were not quite poor enough to qualify for Medicaid. Now they are proposing changes that would make SCHIP resemble a middle-class entitlement.
President Bush is not the most credible opponent of a new federal health care entitlement, given his support for the exorbitant Medicare prescription drug benefit. But he is right to oppose SCHIP expansion and the tax hike that comes with it -- a burden that nonsmokers eventually will find themselves bearing as the percentage of the population that smokes continues to dwindle (an explicit goal of higher cigarette taxes).
SCHIP expansion is especially worrisome in light of research by economists David Cutler and Jonathan Gruber, who found that making publicly funded health care more broadly available tends to crowd out private coverage, encouraging people to decline employer-provided insurance or drop coverage of dependents. According to a 2007 paper co-authored by Gruber, "the number of privately insured falls by about 60 percent as much as the number of publicly insured rises."
This research suggests that much, if not most, of the money spent on SCHIP expansion would pay to cover children who already have insurance. That does not seem like a smart use of taxpayers' money, even if the taxpayers are an unpopular minority.
Jacob Sullum
Jacob Sullum is a senior editor at
Reason magazine and a contributing columnist on Townhall.com.
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