Few issues generate more political emotion than the need to provide health insurance for children.
It is much less expensive to cover children than adults, and healthy children have the best chance of becoming healthy adults. But that does not mean the government must provide the insurance.
Nonetheless, the new Congress is poised to act on President Barack Obama’s campaign promise to provide government-run coverage for children. With the State Children’s Health Insurance Program (SCHIP) due to expire March 31, Congress is expected to use renewal of the program as a vehicle to require all children have health insurance.
Pushing Past the Poor
But expanding SCHIP to cover all children would be a mistake, for four reasons.
First, Congress should make sure poorer, uninsured children are covered first. At least two-thirds of the nation’s uninsured children already are eligible for SCHIP or Medicaid but aren’t enrolled. If SCHIP were expanded to cover children in higher-income families, their parents would rush to the head of the line to get the taxpayer-subsidized coverage. When a “free” government plan is offered, it’s nearly impossible to resist. Poorer children would be left behind as states focused on enrolling higher-income kids.
Second, expanding the program would “crowd out” the private insurance many higher-income kids already have. Hawaii offers proof. Earlier this year, the state created a new taxpayer-financed program to fill the gap between private and public insurance in an effort to provide universal coverage for children. But state officials found families were dropping private coverage to enroll their children in the government plan.
When Gov. Linda Lingle saw the data, she pulled the plug on funding. With Hawaii facing budget shortfalls, she said it was unwise to spend public money to replace private coverage children already had.
Third, putting many millions of children on a government program will quickly lead to restrictions on access to care. A young boy died in Baltimore not long ago from an untreated tooth infection, even though he was enrolled in SCHIP. The boy’s mother couldn’t find a dentist to see him. Situations like that happen because the program’s reimbursement rates are so low that few dentists can afford to take SCHIP patients.
In Massachusetts’s move toward universal health coverage, more people have insurance, but they are finding physicians’ practices are often filled, with waits for a new patient appointment at 100 days and counting. Putting more children on SCHIP will add to the program’s financial pressures, making it harder for poorer kids to get care.
Finally, government insurance means politicians and bureaucrats, not parents, make decisions about the care children receive and what services will or won’t be covered.
A Better Way
There is a better way to help the uninsured become insured.
Lower- and moderate-income uninsured families, not just children, need help to afford health insurance. But right now, the deck is stacked against them. They make too much money to qualify for public programs, such as Medicaid, but don’t have good, higher-paying jobs that come with health insurance.
They need help in purchasing policies, and that help could be provided through refundable tax credits, which enable people to get the money even if they owe little or nothing in taxes.
Also, 12 million more people would be able to buy affordable health insurance if Congress were to allow people to buy insurance across state lines. And market fixes could help people with preexisting conditions get private insurance.
Providing Powerful Incentives
None of these reforms requires turning our health care system upside down or turning it over to the government, and all would provide powerful incentives for families with children to get health insurance they can own and keep with them.
So when the debate over universal coverage for children begins tugging at the nation’s heartstrings this year, it will be wise to consider the costs and consequences and look at alternatives that put parents, instead of politicians, in charge of choosing the right health care for children.
Grace-Marie Turner ([email protected]) is president of the Galen Institute.