The basic question of whether the government should force taxpayers to pay for children's health insurance has not come up much in the debate provoked by Bush's SCHIP veto. But there clearly is wide disagreement about the program's details, including eligibility criteria, coverage of adults, and minimum benefits.
The intractability of these disputes is illustrated by divergent responses to the Congressional Budget Office's estimate that between a quarter and a half of children covered by SCHIP would otherwise have private insurance. For supporters of "single payer" health care, this substitution of government for private coverage, which would become more common if eligibility criteria were loosened, is a feature, not a bug.
Instead of trying to resolve such issues at the national level, why not let each state go its own way, with results that vary depending on local values, the local cost of living and the local health-care situation? No federal money would mean that one state's legislators could no longer force another state's taxpayers to subsidize their generous impulses, but it would also mean no federal restrictions.
Permitting a wide range of policy experiments in areas where the federal government has no license to act is not just the law. It's a good idea.