September 3, 2007

September 3, 2007 | Commentary on Health Care

S-CHIP expansion is not about 'the children'

Washington's rhetoric often fails to match reality, a truism reaffirmed by Congress' recent move to expand the State Children's Health Insurance Program (S-CHIP), a 10-year-old program created for kids in low-income families.

Again and again, political proponents of S-CHIP expansion insinuated that opponents were heartless, while their own motives were as pure as the program's purpose: to give health coverage to needy children who lack it.

But expansion advocates just as consistently voted down amendments designed to keep the program's focus on serving uninsured poor kids.

The vote tallies reveal that S-CHIP expansion has little to do with either children or poverty.

A Heritage Foundation study found that a leading S-CHIP expansion proposal would actually give "free" (taxpayer-funded) coverage to some families considered so wealthy they will have to pay the Alternative Minimum Tax (AMT). Levied on high-income households, the AMT was created to block "the rich" from avoiding their fair share of taxes.

It takes a great deal of chutzpah to wrap yourself in the rhetoric of helping poor kids while creating a bill to extend public health assistance to tens of thousands of families being taxed for excessive wealth. Yet Washington never seems to run a chutzpah deficit.

It gets worse. Whether or not a child is already covered by private health insurance doesn't matter to a majority of our senators either. A major criticism of S-CHIP expansion is that it pushes children out of superior private coverage and into the public, taxpayer-funded program.

According to the Congressional Budget Office, this "crowd-out" effect may be as high as 50 percent. In other words, for every two children who would get coverage under S-CHIP, one child would lose private health insurance coverage. As you go up the income scale, the "crowd-out" gets worse, moving more and more kids out of private coverage and into the government health system.

It's a tremendously inefficient way to combat the problem of uninsured children and mind-bogglingly expensive for taxpayers, as well.

It's clear that expanding S-CHIP isn't so much about helping poor, uninsured children get the coverage they need. Rather, it's an effort to chip away at private health coverage and move more and more people into a government-controlled health program.

The needy children, one fears, are just heart-rending props, meant to distract attention from the fact that Congress is moving ever closer to creating a government monopoly over health care.

Andrew Grossman is a research editor at The Heritage Foundation. Robert Moffit directs Heritage's Center for Health Policy Studies.

About the Author

Andrew M. Grossman Visiting Fellow
Edwin Meese III Center for Legal and Judicial Studies

Robert E. Moffit, Ph.D. Senior Fellow
Center for Health Policy Studies

Related Issues: Health Care

First appeared in the Pittsburgh Tribune-Review