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SPECIAL ISSUE: President Bush Takes a Wrong Turn in Debate over Children's Health Care

The States Children's Health Insurance Program (SCHIP) has suddenly become a key target in an ideological war led by the White House. President Bush has accused Congressional Democrats of trying to remake SCHIP in a liberal image. SCHIP was enacted by a GOP-controlled Congress and signed into law by President Bill Clinton in 1997. The law expires this year, and Congress must reauthorize it. But instead of trying to make this successful program even better, the White House is in fact doing what it accuses Democrats of doing. It wants to recast SCHIP as a liberal program to scare the public with the specter of government-run health care and to advance its own conservative agenda. Here's the new mythology about SCHIP that the president and conservative commentators like Robert Novak are trying to create.

SCHIP is for poor children. According to the president, "this program was designed to ensure that poor children without health insurance receive the medical care they need." Admittedly, health care is a confusing issue, but the president should know that Medicaid, not SCHIP is for poor children. SCHIP was designed for low-to-moderate-income children -- those children living above the poverty line. States were already required to cover poor children through Medicaid when SCHIP was enacted. SCHIP was intended to help workers with moderate incomes whose employers don't cover dependents or don't provide any coverage. According the administration's own web site, "in most states, uninsured children 18 years old and younger, whose families earn up to $34,100 a year (for a family of four) are eligible." That's hardly poor.

SCHIP is government-run heath care. The president and his conservative allies have begun calling SCHIP "government-run health care" in order to chill a Congressional effort to expand it. As Robert Novak argues, this effort "is the thin edge of the wedge to achieve the longtime goal of government-supplied universal health insurance and the suffocation of the private system." What really is behind such over-heated rhetoric is the president's conservative budget priorities. According to the non-partisan Congressional Budget Office (CBO), the president's budget would cut off funding for 21 percent of the children currently enrolled in SCHIP.

It's more than a budget battle, however. Conservatives don't like SCHIP because they want everyone to buy their own coverage without the help of government, employers, or any kind of insurance pool that socializes the costs of getting sick. Given the political hurdles for this Darwinian vision, they see anything with a moderating influence as a threat. SCHIP and Medicaid have been slowly shedding their image as a bureaucratic health care system. Today, 65 percent of Americans receiving health care coverage through Medicaid are enrolled in a private, managed care plan. Much more can and should be done to mainstream these public programs, but unfortunately, that doesn't fit the president's ideologically driven agenda.

Expanding SCHIP will replace private coverage. If, as the president suggests, SCHIP is government-run heath care, then any displacement of private coverage it causes must be avoided at all costs. He's right that SCHIP has caused some children to drop off of their parent's job-based health plan. But according to CBO, the overall impact of SCHIP has nonetheless been positive. The number of uninsured children in low-to-moderate-income families has shrunk by 25 percent under SCHIP. Moreover, why shouldn't families who are struggling to pay for their children's coverage at the workplace be eligible for SCHIP subsidies?

The president and his allies are particularly incensed over Democratic proposals to allow states the flexibility to expand SCHIP eligibility coverage up to four times the poverty rate. Although that level would reach well into the middle class for much of the country, it is not excessive in states with high costs of living. For example, New Jersey has set SCHIP eligibility at three and half times the poverty rate. And it still has more children in job-based coverage than all other states but one.

The president's alternative to expanding SCHIP is a new tax deduction for people who buy their own health care coverage outside the job. The president is right to advocate for changes in the upside-down world of health care tax policy where employees whose employer provides coverage get a tax break, and those whose employers don't provide it get no tax breaks. But policymakers shouldn't have to choose between covering uninsured children and uninsured adults.

The debate the nation should be having about SCHIP is how to take a successful program and make it better. About half of the nation's uninsured children are eligible, but not enrolled in either SCHIP or Medicaid. Much more could be done to enroll children through the workplace, schools, and hospitals. And parents should be required to get coverage for their children once coverage is affordable. Additional funding for SCHIP could make coverage for children affordable to all families. Congress will have to get us there because the president is clearly against it.

For more information:

"President Bush Discusses Health Care,"
The White House, June 27, 2007:
http://www.whitehouse.gov/news/releases/2007/06/20070627-10.html

"Socialized Medicine for 'Kids'"
By Robert Novak, Real Clear Politics, June 28, 2007:
http://www.realclearpolitics.com/articles/2007/06/
socialized_medicine_for_kids.html

Insure Kids Now, U.S. Department of Health and Human Services:
http://www.insurekidsnow.gov/

"CBO Estimates President's SCHIP Proposal Would Lead To Large Enrollment Declines And Funding Shortfalls,"
By Edwin Park and Matthew Broaddus, Center for Budget and Policy Priorities, March 13, 2007:
http://www.cbpp.org/3-13-07health.htm

State Health Care Facts,
Kaiser Family Foundation:
http://www.statehealthfacts.org

"Survival of the Fittest? Bush's Darwinian Health Care Agenda,"
By David B. Kendall, PPI, March 2, 2006:
http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=111&subsecID=137&contentID=253771

Testimony on Health Care and the Budget: Issues and Challenges for Reform,
Peter Orzag, Congressional Budget Office, June 21, 2007:
http://www.cbo.gov/ftpdoc.cfm?index=8255&type=1

Newsletter compiled and written by David B. Kendall, PPI's senior fellow for health policy.