Does SCHIP 'save the children' or expand government control of our health?

Slogans can be useful tools to mold public opinion. Old people like me can remember the World War II advice: “Loose lips sink ships” to remind everyone to not help the enemy by disclosing important information. Germany had a slogan to hype up their population: “Deutschland uber alles”, meaning ‘Germany above all’ (sorry, my typewriter doesn’t have an umlaut). Even the New York Times has a slogan, but sadly it should be rewritten to ‘All the news that’s fit, and not so fit, to print’. Today a popular slogan is to justify all manner of terrible proposed legislation is ‘save the children’. (Another unfortunate slogan commonly used is ‘save the planet’, but that’s for another time).

The ‘State Children's Health Insurance Program, (SCHIP), has now become the latest program that seeks support with the slogan – ‘Save the Children’.
Congress is considering how to provide health care for millions of Americans. What Congress does will affect children, Medicare beneficiaries, and taxpayers now and for years to come. The new House bill is 465 pages long and is called The Children's Health and Medicare Protection Act (H.R. 3162). This bill greatly expands dependency of millions of Americans on government health care; it undermines private health plans, reduces choice for Medicare beneficiaries, and burdens taxpayers with a permanent new entitlement.

The House uses the need to reauthorize the State Children's Health Insurance Program (SCHIP) by September 30, 2007 (the expiration date) as an excuse for expanding the present program. SCHIP now covers about 6.7 million children whose families are low-income but not poor enough to qualify for Medicaid. However, under the House bill SCHIP is no longer limited to low-income persons or even to ‘children’. This is accomplished by redefining both "low-income" and "children." (CBO, "Fact Sheet for March 2007 Baseline: State Children's Health Insurance Program," February 23, 2007). Under the bill, eligibility for government coverage would be extended to families with incomes up to 400 percent above the federal poverty level (FPL)—$82,600 for a family of four. Most of us would not consider this definition of low-income to be a reasonable standard. Also, the definition of “children” is expanded to include those under 25 (are 20-year olds children?)

The proposed legislation would greatly undermine private health care insurance; currently 89% of all children between 300 percent and 400 percent of the FPL are enrolled in private health insurance; 77% of all children between 200 percent and 300 percent of the FPL are enrolled in private health insurance; and 50% of all children between 100 percent and 200 percent of the FPL are enrolled in private health insurance (CBO, "The State Children's Health Insurance Program," Pub. No. 2970, May 2007). Recent studies indicate that people with private insurance will likely drop eligible dependents in favor of welfare-style health coverage. According to CBO estimates, the House bill would move nearly 1.9 million people off private insurance and onto taxpayer-supported health care. (CBO, Estimated of Changes in SCHIP and Medicaid Enrollment of Children Under H. R. 3162, the Children's Health and Medicare Protection Act of 2007, as Ordered Reported by the Committee on Ways and Means on July 27, 2007," July 27, 2007). The House SCHIP bill clearly expands government control over the financing and delivery of health care. If enacted, it would affect millions of Americans for years to come by progressively reducing personal choice in private health care alternatives, ‘crowding out’ private coverage among the young, and eliminating or reducing private health plans as options for the elderly and disabled in Medicare.

Currently all Medicare beneficiaries are free to enroll in Medicare Advantage, the program of private health plans created under the Medicare Modernization Act of 2003.

The House bill would affect the current Medicare Advantage program and would cut the projected enrollment in half by 2012. If enacted, the bill would partially finance the government expansion by "equalizing" payments between Medicare Advantage plans and the traditional fee-for-service Medicare, even though Medicare Advantage plans have better cost coverage. The CBO estimate indicate that such "equalization" would amount to about $50 billion in cuts over the next five years and $157 billion through 2017. (CBO, "Estimated Effect on Direct Spending and Revenues of H.R. 3162, the Children's Health and Medicare Protection Act, for the Rules Committee, as Ordered Reported by the House Committee on Ways and Means on July 27, 2007," July 27, 2007). This would hurt seniors and deprive seniors of their choice of insurance programs. Most of the reduction "would be reflected as reduced benefits or increased costs to the plan's participants."(CBO, "Medicare Advantage: Private Health Plans in Medicare," Economic and Budget Issue Brief, June 28. 2007). The CBO further indicates that “such measures would render Medicare Advantage less attractive to seniors, encourage a number of them to return to the traditional Medicare fee-for-service program, and discourage enrollment by otherwise potential participants”.

Proponents of the House bill continue to say the legislation to revise the current SCHIP program is necessary to “save the children”, but is it really intended to save children not now covered by insurance or is it another power grab and a subtle version of the disparaged ‘Hilary care’ defeated during the Clinton administration?