September 22, 2007

September 22, 2007 | Commentary on Health Care

Proof that SCHIP Could Destroy Healthcare

The future of America's health-care system may be at stake in the battle over the State Children's Health Insurance Program.

SCHIP was intended to provide children living in homes up to twice the poverty level ($41,300 a year for a family of four) with government-designed health coverage. Liberals have transformed a routine renewal debate into a referendum on whether we should take an incremental, but significant, step toward a government-controlled health system.

Indeed, even as the Census Bureau was reporting that 5.7 million SCHIP-eligible children remain uninsured, liberal governors and their Capitol Hill allies were pressing to make SCHIP coverage available to children in middle-class homes, the vast majority of whom already are covered under their parents' private plans.

President Bush resisted. Uncle Sam, he reminded them, shouldn't be luring working Americans into the welfare state. In August, the Department of Health and Human Services informed state health officials that it would no longer approve their requests to extend SCHIP coverage to children in families earning more than 250% of the federal poverty level unless they had already covered virtually all (95%) of the children originally targeted under SCHIP.

One would expect liberals to applaud this bold move to increase health coverage among the poorest kids. Think again.

The Children' Defense Fund called Bush's initiative "unjust" and a "move in exactly the wrong direction." The New York Times editorialized that "the Bush administration wants to return to a darker age." Sen. Hillary Clinton (D-N.Y.) alleged the president had launched "a sneak attack on America's children."

Rep. Pete Stark (D-Calif.), who chairs a congressional health panel, doubts that any state could achieve this goal. The Bush administration, he adds, "might as well just come out and say let's kick kids off the rolls."

But, as the 2006 Census Bureau figures demonstrate, the 95% coverage standard is eminently attainable. Indeed, it's already standard in 22 states. If Connecticut (97.7%), Rhode Island (98%), Wisconsin (97.7%), and Michigan (96.8%) can cover so many kids, others can, too. But even in the 22 high-coverage states, the number of uninsured children at or near the poverty level -- 222,000 in New York, 128,000 in Pennsylvania, 96,000 in Ohio, etc., -- remains too high for their governors to abandon them.

Expanding SCHIP to middle-class kids makes even less sense in states that flunk Bush's standard. Gov. Jon Corzine (D) estimates that Bush's proposal would "[deny] health care coverage to as many as 10,000 children in New Jersey." But why pursue these kids when 150,000 kids below 200% of poverty still lack coverage in New Jersey? 
 
Conservative lawmakers should rally around an alternative that enables the working poor to own their own coverage and not depend on the inferior coverage that comes with programs such as SCHIP. And they should emphasize just how mediocre and, at times, even deadly government-controlled coverage can be.

Medicaid and SCHIP pay health providers a pittance. According to a leading health consulting firm, the rates private plans pay "can be up to twice what is paid under Medicaid for the same service." Not surprisingly, a Gallup survey shows, only 53% of Medicaid recipients report it's easy to "find a provider who accepts Medicaid." Predictably, those on Medicaid and SCHIP use emergency rooms four times more often than those with private insurance.

The inferior quality of government healthcare proved fatal to 12-year-old Deamonte Driver of Maryland. Earlier this year Deamonte succumbed to a brain infection after his mother spent months trying to get a dentist to treat his nagging toothache. Her search isn't unusual; only 16% of Maryland's 5,500 dentists accept Medicaid patients.

Ironically, lawmakers attribute his death to the shortcomings of the very government health programs they want to expand. Deamonte's mother, Sen. Clinton said, "called [27 or 28] dentists, but they weren't taking any more children on Medicaid or on SCHIP." They told her, Clinton continued, "look, our quota for poor kids is filled,"

In a sop to Deamonte, lawmakers have appended a token $300 million to SCHIP to -- what else? -- expand the government's role in providing dental services to eligible kids. But liberal lawmakers refuse to believe that government-controlled healthcare will ration or deny care and prove inferior to privately-owned coverage. "Our goal," Bush says, "should be [to get private coverage] for children with no health insurance, not [get government healthcare] for children who already have private health insurance."

Ask Deamonte.

Michael G. Franc is vice president of government relations for The Heritage Foundation.

About the Author

Michael Franc Distinguished Fellow
Government Studies

Related Issues: Health Care

First appeared in the Human Events