Let Their SCHIP Sink

After years of out-of-control spending, President Bush has finally found his veto pen, and I congratulate him for it.  It is now up to fiscally responsible Members of Congress to sustain that veto.  Is this an easy vote? No, but it is a critical one.

If the Republican Party is to recapture the high ground on spending discipline and defense of individual choice against the encroachment of the nanny state, we must hold the line against the attempt by Democratic leaders to override the President’s veto of the radical restructuring and expansion of the State Children’s Health Insurance Program (SCHIP).

Democrats in Congress have been gleefully making the rounds of television talk shows insisting that any opposition to this effort is concrete proof of cold-hearted indifference to the health of our country’s kids. This is absolutely untrue, but if we look closely, it is clear that this legislative Trojan horse is actually a dramatic effort to expand government-run healthcare at the expense of individual choice and flexibility.   

First things first:  All Members of Congress share the goal of expanding access to quality healthcare to all children and all Americans.  As a matter of fact, it was a Republican-led Congress that created SCHIP nearly 10 years ago to provide health insurance to disadvantaged children. But H.R. 976 will not advance those efforts.

According to the non-partisan Congressional Budget Office, the legislation contains language to allow expanding the definition of "child" to the age of 21 and the definition of "poor" to include those making $82,000 per year.  SCHIP will then enroll an additional 1.2 million people by 2012.  Of those 1.2 million, CBO estimates that 600,000 have private health insurance coverage today.  This bill provides strong incentive for individuals and employers to dump private coverage and shift costs to the taxpayers — at an estimated cost of $74,000 per person annually.  

In Tennessee we watched a similar stampede to state-run coverage cripple the TennCare system — Tennessee’s state Medicaid program.  Created in 1994 by an agreement between President Clinton and a Democrat governor, TennCare was touted as the wave of the future, modeled after Hillary Clinton’s health care initiative.

Instead, TennCare placed the state’s entire Medicaid population into state-run managed care.  The state’s Medicaid population quickly ballooned as employers rushed to dump coverage.  In just a few short years, the program was in crisis and nearly 200,000 people were cut from the rolls in a desperate attempt to save the system.  The TennCare experience is a perfect "what not to do" model for healthcare reform, but the Democratic leadership in Washington seems to have learned precisely the wrong lessons. 

The SCHIP bill also plays hide and seek with taxpayer dollars.  It dramatically increases Federal funding to enroll new children in SCHIP for the next 5 years.   Then in 2012 the bill abruptly cuts total SCHIP funding by 80 percent — to a level substantially lower than what we’re paying now with far fewer people enrolled.  The effect is that unless Congress intervenes, millions of children will then lose coverage.  So, how much money does the budget gimmick hide?  In 2012, the funding drops from $14.25B in the first 6 months to $1.75B in the second six months.  CBO estimates that by 2017, the program will have a $40 billion hole.

The expansion would take a limited, block grant program and turn it into a permanent entitlement, along the lines of Medicaid — automatically funded every year with or without Congressional approval.  And like Medicaid, Medicare and Social Security, Congress will create another Federal program that runs on auto-pilot, eating up a larger and larger share of American tax dollars every year.  H.R. 976 would chop out the income limit for eligibility, and allow states to expand the eligibility pool to include “children” up to the age of 21.  Under the new plan, states will set their own eligibility requirements and can dramatically expand coverage to upper-middle-class and wealthy families if they choose.  States would actually have an incentive to do so, since their Federal funding allotment would automatically increase.

According to the Heritage Foundation, nine states have already expanded coverage to people whose incomes exceed 300% of the poverty level.  With this new proposal to loosen rules even further, it’s not hard to imagine some states increasing eligibility to include those at even 400% of poverty — creating a new, tax-payer subsidized, bureaucrat-run healthcare benefit for a family making $82,600.

Additionally, this legislation goes out of its way to retroactively repeal the Republican passed requirement to provide proof of citizenship when enrolling in the program, making it substantially easier for illegal immigrants to apply for and receive taxpayer-funded, government-run healthcare.   

The liberal leadership in Congress knows that it does not have the support of the American public to construct a full-blown, European-style, national single-payer healthcare system.  So instead, they’re pretending that this radical change in policy is a simple update to a popular, long-established program — a tactic that the Wall Street Journal termed “slow-motion socialism.”  They have chosen to crowd out private insurers and roll back successful efforts to introduce market efficiencies and principles of competition into our healthcare delivery system in favor of a traditional, bureaucracy-heavy government program.  Experience suggests that the best way to ensure quality coverage for all is to encourage individual choice and let the free market work.

The vote to sustain this veto has broader implications as well.  It is past time for this President and conservative Members of Congress to prove that we believe our own rhetoric and work for a compromise that insures poor children first, while maintaining our commitment limited government.