SCHIP Is for Children in Name Only

Published September 19, 2007

As the House Ways and Means Committee considers a bill for a huge expansion of SCHIP, the State Children’s Health Insurance Program, it’s important to know exactly what the program has accomplished during the decade it has been in place.

The program, enacted in 1997, was originally given $40 billion of federal funds over 10 years “for provision of child health assistance to uninsured, low-income children.” It was supposed to help children who were too poor to afford private insurance but not poor enough to qualify for Medicaid. Eligibility was to be limited to children living at 200 percent of the poverty level.

The program has strayed far from its original mission. A study by Jonathan Gruber of MIT confirmed that six of every 10 people covered by SCHIP expansions already had private coverage. What this means is SCHIP is extending coverage to previously insured children. It is crowding out private insurance coverage.

Further scrutiny reveals that SCHIP has also strayed from its mission of targeting the needy. Despite the parameters set out by Congress, 14 states are using SCHIP to offer subsidized health care to people earning up to 400 percent of poverty–as much as $60,000 a year for a family of four.

SCHIP hasn’t even stayed true to its mission of insuring children. According to the Government Accountability Office, more than 10 percent of SCHIP enrollees are adults. The GAO reports that in three states, more than half of the program’s enrollees aren’t children. Minnesota led the pack in 2005 with 87 percent adult enrollment.

So, the program misses the mark on the “uninsured” part, the “low income part,” and even the “children” part of its mission. Maybe members of the Senate Finance Committee think voting to renew and expand this wasteful, misdirected program is an easy way to look like they’re doing something to help kids and fix our broken health care system. Don’t fall for it.

If Congress is really concerned about children and our health care system, they won’t approve another dime for this program until or unless it is reformed and monitored responsibly.

Bill Snyder ([email protected]) is a policy advisor for The Heartland Institute.