The SCHIP Hits the Fan

Posted: Oct 11, 2007 2:12 PM
The SCHIP Hits the Fan

Ever get that funny feeling of déjà vu? That you have been somewhere or seen something before? As the next election nears, one gets the sense that we are back in 1993 debating health care and its consequences all over again.

Some of the players are even the same. Hillary Clinton, now seeking the Democratic presidential nomination, has put forth a vision of health care for all the uninsured which would be funded by increasing federal income taxes, raising tobacco taxes and raising capital gains taxes. This would assure a universal health care system, she contends, and move us in the direction of socialized medicine (a term she has been careful not to use). At the same moment the country debates whether government-run programs like Social Security and Medicare, with their trillions of dollars in unfunded mandates, are sustainable, candidate Clinton is urging the government to take on health care too. Some things never do change.

Republican candidates, such as Rudy Giuliani and Mitt Romney, have put forth competing visions of health care, arguing for a change in the tax code to allow individuals to purchase health care without paying taxes on it and changing the decades-old system of receiving health care through one’s employer. That would contribute to lowering health costs, energizing the private insurance market and providing for more individual responsibility in health care decision-making.

The lines are drawn and it is clear the health care moment has arrived in American politics.

There is no better sign of the coming debate over health care than in the political battle over SCHIP, the State Children’s Health Insurance Program. President George W. Bush vetoed, as he promised he would do, the expansion of the SCHIP program above his proposed budget request.

Bush favors the SCHIP program. Most politicians do, as it has provided relatively inexpensive care for children whose parents make too little to afford private insurance but too much to qualify for Medicaid. Children are inexpensive to insure, the argument goes, and therefore it is better to insure more children.

There is no doubt that insuring more children—just like educating more children—is a positive social good. If children have health insurance they are better off (as are their parents) than those without health insurance.

Bush proposed an increase in SCHIP spending by $5 billion per year over five years. That was a 20 percent increase over current levels and would have continued to fund health insurance for those under 200 percent of the Federal Poverty Line (FPL).

He vetoed a Congressional bill that would have expanded SCHIP to fund children at 300 percent FPL, or $62,000 in annual income for a family of four. This would turn SCHIP into a middle class entitlement program, not a program to help the needy. That’s why he vetoed it, and why he should have done so.

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