The State Children’s Health Insurance Program (SCHIP) may stray from its original purpose of aiding poor children and move one step closer to creating a socialistic health care system if a proposed funding increase takes place, speakers said at a July 13 luncheon at the Longworth House Office Building sponsored by the Heritage Foundation in Washington,DC.
The program, which began in 1997, will expire September 30 unless Congress reauthorizes it this summer. In the meantime, Congressional Democrats are rushing to expand it by $50 billion.
Offering Alternatives
Keynote speaker Nina Owcharenko, a Heritage Foundation health care policy analyst, said the Democrats’ changes would:
- Radically expand eligibility to include legal immigrants, adults still in school, children of state employees, and pregnant women;
- erase the distinction between SCHIP and Medicaid;
- increase dependence on the government for health care; and
- displace private coverage.
All speakers agreed the changes would increase taxes, usher more people into a government health insurance plan, and harm private health insurance providers.
Instead, they suggested, a tax deduction or refundable tax credit would motivate more people to privately insure their children, solving the problem while also aiding the private market.
“The majority of Americans get [health insurance] through the private market, so it’s a huge shift to say we’re going to start depending on the government,” Owcharenko said in an interview for this article. “We need to start looking at the problems and obstacles for the uninsured to join the private market.”
Becoming an Entitlement
If the Democrats get their way, said U.S. Rep. Marsha Blackburn (R-TN), the program would morph from a block-grant program to an individual entitlement. If that happens, SCHIP would likely become a money-swallowing, long-term liability with no one really held accountable for costs, which would be supplemented by tax dollars.
“There’s no such thing as a free lunch,” she said. “As more things are made free, other people are paying the price.”
Already, Blackburn said, the program has deviated from its original purpose of covering poor children to admit adults and those considered rich by the Internal Revenue Service but poor by SCHIP standards–those earning up to 400 percent of the federal poverty level.
Furthermore, Owcharenko said, Democrats are pressuring states to enroll all eligible children.
“You certainly are going to break the bank on that,” she said.
Raising a Generation on Government Handouts
Furthermore, the influx of legal immigrants, college students, children of state employees, and pregnant women would significantly increase costs, Owcharenko said, which would lead states to continually appeal to the federal government for more money.
Parents would have no incentive to privately insure their children, she said, and would instead drop them from private insurance plans in hopes of qualifying them for SCHIP–increasing enrollment in the government plan even further. That’s how SCHIP would begin to look more like Medicaid and government health insurance.
“When those children are 18, they’ve had nothing else but a government health care program,” she said. “When they turn 25, what are they going to expect? A government health care program.”
Thus the Democratic agenda endangers the entire private health care market, she added, noting that with fewer private insurers, expenses would rise.
Owcharenko said Congress should focus on creating a consumer-oriented, market-driven system and inspiring consumers to buy insurance privately by providing incentives.
“It also creates an incentive, once consumers have real dollars, to say, ‘Why is it so expensive here?’ ” she said, explaining how the private market will help poor children and their families. “It really empowers the people to start demanding things. It really gets consumers back to supply and demand.”
Jillian Melchior ([email protected]) writes from Washington, DC.
