President Barack Obama has reversed two of his predecessor’s policy directives that had prevented states from expanding taxpayer-funded health insurance for the poor to children in higher-income families.
“These requirements have limited coverage under several state plans that otherwise would have covered additional uninsured children,” Obama wrote in a February 4 memo announcing the reversal. “As a result, tens of thousands of children have been denied health care coverage.”
Former President George W. Bush had directed states to restrict eligibility for the taxpayer-funded State Children’s Health Insurance Program (SCHIP) to children whose family income was at or below 200 percent of the federal poverty level. His directive required states desiring to expand coverage eligibility to families with higher incomes to first cover at least 95 percent of currently eligible children or forgo federal funds for Medicaid and SCHIP.
Even though Obama’s new directive only “allows states to loosen restrictions on eligibility provided the number of eligible children enrolled in private insurance does not decrease by more than 2 percent due to the expanding taxpayer-funded program, allowing for a loosening of eligibility restrictions is detrimental to the health care marketplace as a whole,” said Andrea Whitman, a health care policy analyst at the Texas Public Policy Foundation.
The move is one of “a number of incremental steps toward universal, socialized medicine in this country,” said Roger Stark, a health care analyst at the Washington Policy Center.
“The problem,” Stark said, “is that state-sponsored plans would crowd out private plans, and families would rush to inexpensive or free government coverage, dropping their private insurance.”
Expanding SCHIP eligibility is detrimental to the nation’s health care system, Whitman said, because “it allows families already able to pay for private health insurance to enroll into a government program, expanding an entitlement program.”
Bush was protecting some semblance of a market health care economy by “preventing [establishment of] a completely government-run health care system for children,” said Whitman. “Expanding taxpayer-funded coverage eligibility morphs the program away from its original purpose—providing health insurance to children of the working poor—into an expensive entitlement for the middle class.”
Poor Children Could Lose
“What would you think if the government controlled all other necessities of life—state-run food stores, state-controlled housing, all of our clothes supplied by the government?” asked Stark. “Health care is simply an economic activity, and is much too important and critical to put into the hands of government bureaucrats.”
With the Bush administration’s directives having been set aside, many families will easily be able to manipulate the system, said Whitman.
“A free-market health care economy embraces consumer-driven health care,” said Whitman. “Government stepping in and providing free or subsidized health care to millions of Americans comes at a steep cost: regulations on providers, shift of costs to people with private insurance, and less consumer choice and power.
“It is highly likely that poorer children will be left behind as states focus on enrolling higher-income children if a state chooses to expand its eligibility levels,” Whitman concluded.
Elisha Maldonado ([email protected]) writes from California.