There Are Better Ways to Insure Kids

Published in The Wall Street Journal, October 18, 2007

All eyes are on Congress. Democratic leaders are planning a vote today to override President Bush's veto of their expansion of the State Children's Health Insurance Program. They will need votes from two-thirds of the members in each chamber, which means a substantial number of Republicans must go along.

Demagoguing health care — especially for poor children — is easy. And we've seen some of that. But this debate is not over whether to give poor kids health care, or even over whether this program should continue. Everyone agrees that it should. Rather, it's over who should be covered and whether to extend benefits to middle-income children. Mr. Bush believes the bill expands taxpayer-funded health coverage too far up the income ladder.

Schip was created in the 1990s for children whose parents earn too much for them to qualify for Medicaid but not enough to afford private insurance. The president wants a bill that focuses on these children, especially those whose parents earn $41,000 a year or less for a family of four.

Congress wants to enroll millions more children, including many in higher-income families. And it would spend $60 billion in Schip money to do it. Easier enrollment rules and bonus payments would give states every incentive to expand coverage to children in households with higher incomes.

As voters puzzle over this issue, they might want to ask a basic question: Will this expansion help or hurt the poorer children the program was designed to serve?

The answer isn't encouraging.

Already, two-thirds of children who do not have health insurance are eligible for federal help through either Schip or Medicaid. Congress's first priority should be to make sure these poorer, uninsured children are taken care of. Yet states have struggled to get these children enrolled, which means that if there is a stampede to add higher-income kids to Schip, the poorer kids will likely continue to get left behind.

This is why the administration wants states to first enroll 95% of the children now eligible (those in families living on wages that are under 200% of poverty) before they open the program to higher-income kids.

The bill Congress passed, and the president vetoed, overturns that requirement — an implicit acknowledgment that higher-income children will be the focus of the expansion. Consider that the bill would allow New York to cover kids in families who make up to $83,000 a year, something that would pull federal dollars away from less affluent states so that New York could provide taxpayer-funded health insurance to children in middle-income families.

In the Empire State and elsewhere, these higher-income children are most likely to already have private insurance. But no matter, once they are eligible for government coverage, their families are more likely to drop that private insurance.

Another question voters need to ask is, What is the quality of coverage kids will get under an expansion?

Many states hire private insurance companies to administer Schip, but families have little choice over coverage and, in many cases, don't have the same access to physicians as those with traditional private coverage. In other states, Schip works like Medicaid with low payment rates to doctors and hospitals, which limits access.

Parents who drop private coverage to put their children in Schip should ask if the public program would provide them with the same access to their physicians as their private plans.

The legislation would allow parents to use Schip money to put their kids on their coverage at work. But first, Congress needs to make sure it lifts the roadblocks to make this a viable option.

Voters might also want to ask whether Schip is the right vehicle to take us to universal coverage.

States are trying to take the lead in creating universal health-care programs. And many would be all too happy to use federal money to do it. At least eight states have announced plans to sue the federal government for blocking attempts to add children in higher-income families to Schip. Six states cover more adults than children in this program designed for children. Expanding Schip will encourage these and other states to find new ways to collect federal dollars.

This is all a legitimate policy debate to have. And the place to have it is probably the 2008 presidential election, where voters can hear ideas over how to cover the uninsured — not just children but adults and whole families. Engaging in such a debate now in the midst of a budget fight only confuses the issue.

When Congress considers overriding the president's veto, the real question should be this: Is putting millions more children on taxpayer-supported coverage, including many who have private insurance, really the right choice to make?

Ms. Turner is president of the Galen Institute.

 

 

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Published in The Wall Street Journal, October 18, 2007

All eyes are on Congress. Democratic leaders are planning a vote today to override President Bush's veto of their expansion of the State Children's Health Insurance Program. They will need votes from two-thirds of the members in each chamber, which means a substantial number of Republicans must go along.

Demagoguing health care — especially for poor children — is easy. And we've seen some of that. But this debate is not over whether to give poor kids health care, or even over whether this program should continue. Everyone agrees that it should. Rather, it's over who should be covered and whether to extend benefits to middle-income children. Mr. Bush believes the bill expands taxpayer-funded health coverage too far up the income ladder.

Schip was created in the 1990s for children whose parents earn too much for them to qualify for Medicaid but not enough to afford private insurance. The president wants a bill that focuses on these children, especially those whose parents earn $41,000 a year or less for a family of four.

Congress wants to enroll millions more children, including many in higher-income families. And it would spend $60 billion in Schip money to do it. Easier enrollment rules and bonus payments would give states every incentive to expand coverage to children in households with higher incomes.

As voters puzzle over this issue, they might want to ask a basic question: Will this expansion help or hurt the poorer children the program was designed to serve?

The answer isn't encouraging.

Already, two-thirds of children who do not have health insurance are eligible for federal help through either Schip or Medicaid. Congress's first priority should be to make sure these poorer, uninsured children are taken care of. Yet states have struggled to get these children enrolled, which means that if there is a stampede to add higher-income kids to Schip, the poorer kids will likely continue to get left behind.

This is why the administration wants states to first enroll 95% of the children now eligible (those in families living on wages that are under 200% of poverty) before they open the program to higher-income kids.

The bill Congress passed, and the president vetoed, overturns that requirement — an implicit acknowledgment that higher-income children will be the focus of the expansion. Consider that the bill would allow New York to cover kids in families who make up to $83,000 a year, something that would pull federal dollars away from less affluent states so that New York could provide taxpayer-funded health insurance to children in middle-income families.

In the Empire State and elsewhere, these higher-income children are most likely to already have private insurance. But no matter, once they are eligible for government coverage, their families are more likely to drop that private insurance.

Another question voters need to ask is, What is the quality of coverage kids will get under an expansion?

Many states hire private insurance companies to administer Schip, but families have little choice over coverage and, in many cases, don't have the same access to physicians as those with traditional private coverage. In other states, Schip works like Medicaid with low payment rates to doctors and hospitals, which limits access.

Parents who drop private coverage to put their children in Schip should ask if the public program would provide them with the same access to their physicians as their private plans.

The legislation would allow parents to use Schip money to put their kids on their coverage at work. But first, Congress needs to make sure it lifts the roadblocks to make this a viable option.

Voters might also want to ask whether Schip is the right vehicle to take us to universal coverage.

States are trying to take the lead in creating universal health-care programs. And many would be all too happy to use federal money to do it. At least eight states have announced plans to sue the federal government for blocking attempts to add children in higher-income families to Schip. Six states cover more adults than children in this program designed for children. Expanding Schip will encourage these and other states to find new ways to collect federal dollars.

This is all a legitimate policy debate to have. And the place to have it is probably the 2008 presidential election, where voters can hear ideas over how to cover the uninsured — not just children but adults and whole families. Engaging in such a debate now in the midst of a budget fight only confuses the issue.

When Congress considers overriding the president's veto, the real question should be this: Is putting millions more children on taxpayer-supported coverage, including many who have private insurance, really the right choice to make?

Ms. Turner is president of the Galen Institute.

 

 

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About the author