September 24, 2007

How S-CHIP Does More Damage Than Good

The Heritage Foundation takes a look at that the controversial expansion of the S-CHIP program, and concludes that it will result in less coverage for poor and middle-class children. Expanding the insurance pool to cover children of working-class and middle-class families will disrupt cost containment from private insurance, and will crowd out better coverage. Not only does the expanded pool get less coverage, but it also increases the per-child cost by almost 80%.

At Heading Right, I ask why we're looking at an entitlement expansion in a period where we're facing an entitlement-spending crisis. Even the CBO acknowledges that the S-CHIP expansion crowds out better private insurance coverage, an effect that increases as the expansion gets wider. And why do we feel the need to subsidize health care coverage for families making in excess of $80,000? Could this be just a stalking-horse for government-run health care?


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Comments (20)

Posted by SouthernRoots | September 24, 2007 10:23 AM

S-CHIP, States passing laes to cover all children, etc., etc.

If all of these programs are in place, why does the number of the "uninsured" continue to rise? Is it an indication that these programs are failures?

What percentage of the "uninsured" are uninsured intentially?

What percentage are illegal immigrants?

Insurance costs continue to rise, but what are the percentages of fault (cause) involved?

Medical costs?
Insurance company greed?
State/Government mandates?

Here in Washington, they just passed a law requiring ALL insurers to cover "mental health". It is not an option, it must be there.

How many more mandates of what is to be covered make it harder and harder to afford coverage for what is really needed?

Posted by gregdn | September 24, 2007 10:56 AM

One can only hope you felt the same way about Medicare part 'D' when the compassionate conservatives passed it.
Am I the only one who's a little suspicious of Mr. Bush's newfound conversion to Fiscal Conservativism?

Posted by Joe C. | September 24, 2007 11:32 AM

The # of uninsured as a % of population has remained relatively constant (~15%) for the last 20 years.

Posted by FedUp | September 24, 2007 12:08 PM

Why is it that the government is always coming up with new (and expensive) programs that have not been thoroughly thought through and then expect me to pay for them! Getting tired of having their hands in my pocket!

Posted by Teresa | September 24, 2007 1:13 PM

My understanding is that the 80,000 cut-off is only in NY State. (Every state determines eligibility for the program.) $80,000 is a lot of money in SC, but it is peanuts in a place like NYC where rent can be $5,000 a month for a tiny apartment or California where housing is also outrageous.

I don't think denying poor kids medical coverage is really a way to win over soccer moms in the next election. Many businesses simply do not cover health insurance and private insurance is ridiculously expensive.

Posted by Richard Aubrey | September 24, 2007 1:35 PM

Teresa. Health care is expensive. Health care insurance is expensive. It only seems reasonable to those for whom the cost is buried (employer benefits or government benefits). The cost is the same.
Easiest thing to do would be to mail a voucher for, say, half the premium to the poor folks and let them go and buy their own.

Not expanding the government is a deal-breaker with a good many, though.

Posted by OregonGuy | September 24, 2007 2:15 PM

In Oregon the plan is to raise schip to 350% of Federal Poverty Level. That brings poverty benefits to families of four making more than 70-thousand dollars a year.

Link here:

Posted by Tim W | September 24, 2007 2:34 PM

The democrats plan is to continually expand government healthcare so that it further distorts the private market eventually destroying the private market. The end result will be government run health care with the inevitable rationing and shitty service. Instead of overturning the system in one major reform, its death by a thousand cuts for the private system.

Posted by jfw1961 | September 24, 2007 2:37 PM

SCHIP was originally intended as assistance for needy children, those whose family income was less than double the federal poverty level (~40K for a family of 4). As it turned out several states did not use their entire allotment. So, having a distaste for leaving other people's money on the table: Seven states provide benefits to families earning more than double the federal poverty level; Four of those states (Maryland, Massachusetts, Missouri and New Jersey) extend SCHIP coverage to three times the poverty level. (~60K for a family of 4). Furthermore, five states (Illinois, Minnesota, New Jersey, Rhode Island and Wisconsin) currently cover parents and childless adults. Over half of the SCHIP recipients in Wisconsin are adults. In short, the liberal appeals for expansion of the program on behalf of unfortunate children going without care is BOGUS. It is estimated that between 60 and 75% of all uninsured children are eligible for either Medicaid or SCHIP under the current guidelines. The Congressional Budget Office reports an estimate that as many as half of new enrollees would drop existing private coverage. Buttressing this report is another by the National Bureau of Economic Research which puts the crowd-out rate as high as 60 percent. Moreover, by doubling SCHIP's original income limit to $82,600, 71 percent of American children would become eligible for public assistance.

And yes, the proposed expansion of SCHIP definitely smacks of a stepping stone to universal health care. Check out the little nuggets located in this aricle ( that describes notes from the Clinton Task Force for health care formed in the early nineties.

Liberals will stop at nothing to effect socialism. Even if takes riding on the backs of children to get there.

Posted by quickjustice | September 24, 2007 3:16 PM

New York already has expanded its Medicaid program to the middle class. That program is now totally out of control, consuming more than a third of the entire state budget.

That's the track upon which these proposals to expand government-controlled health care are putting us.

Posted by nedludd | September 24, 2007 3:38 PM

There is an interesting coverage of the SCHIP controversy at

In it, it is noted that the limits for SCHIP already allow for the stated levels that the President noted. In addition, it also references the actual language of the law and the considerations involved in insured persons moving to the SCHIP program. has in my estimation shown itself to be a pretty even-handed evaluator of political claims.

Posted by Teresa | September 24, 2007 3:55 PM

The health insurance system is a mess and needs overhaul. My uncle died this summer from cancer. He was a waterman on the Chesapeake Bay all his live (professional crabber) running his own boat. His wife owns a small barber shop -- just her and one other girl cutting hair.

After Louie got diagnosed with stage 4 cancer, Shirley had a recurrence of breast cancer and had to undergo chemo. Both were self insured as small business owners. Louie was so sick he was unable to work for about 8 months before he died. Shirley kept working as much as she could while trying to care for him at home through hospice and her own illness. They had to pay a $10,000 health insurance premium earlier in the summer. Fortunately, Louie had 8 brothers and sisters and they were able to chip in and pay what he could not so that Shirley would not lose the house to pay medical expenses.

This story is not unusual. They are, were, hardworking middle class people. Louie was a Vietnam combat vet. He loaned money to everyone and helped people as much as he could. The funeral home was overflowing during the service.

Most people I know have a story of a family member like that and feel like health insurance needs fixing.

My family gets insurance through my husband's job. We pay $500 a month for fairly crappy health insurance and don't have any dental insurance. To just to get all four of our teeth cleaned runs $500 every six months -- and that definately does not count any fillings, braces, etc...

I see everyone criticizing Hillary-care, but where is the Republican proposal for fixing the situation?

Posted by hap | September 24, 2007 4:52 PM

"And why do we feel the need to subsidize health care coverage for families making in excess of $80,000?"

Maybe...just companies refuse to insure a lot of people in the private market. Does that make SCHIP a subsidy or a last resort? Finding private insurance isn't a problem exclusive to an economic's universal. While I don't necessarily agree with an expansion of S-CHIP, at least somebody is trying to do something about the problem. Get off the sidelines and in the game if you don't like their solution.

Posted by Burtsb | September 24, 2007 10:25 PM

So Teresa, my family is supposed to pay for you families health insurance. Are we supposed to pick up the tab for you car problems too ?
I guess you think Queen Hilary will solve everyone problems by wiping out all our choices and giving everyone crummy healthcare . Trust me ,everyone but Hillary and her comrades who will get private clinics and hospitals .
That what goes on in so called socialized heavens are England and Canada . Guess where the rich and powerful go for there healthcare, oh that would be the awful broken health system in the US !
Teresa , I like the touch about the Vietnam Veteran thing.I find it odd how he did not qualify for VA benefits.
Maybe you should shop around for better private healthcare or maybe a better Sob Story you can use to peddle your Queen Hillary's propaganda!

Posted by NedraLee | September 24, 2007 10:30 PM

Teresa, I could have gone several lifetimes before hearing your "whine" ... your a Liberal .. capital L ... I do wish you'd leave us alone over here at the CQ!

Posted by Slowking Man | September 24, 2007 10:46 PM

You mean socialism doesn't work? Unthinkable!

Posted by jfw1961 | September 24, 2007 11:13 PM

"I see everyone criticizing Hillary-care, but where is the Republican proposal for fixing the situation?"

Did you bother to read the article that the Captain linked to? A little exploration would have revealed that the Heritage Foundation website alone offers several comprehensive proposals.

Posted by Teresa | September 24, 2007 11:16 PM

BurtB -- Since you accused me of being a liar on two seperate threads, here's my uncle's death notice with a link to the Baltimore Sun:

CROOK , Louis H. On Tuesday, Louis Henry Crook, of Stevensville, MD; beloved son of Helen (nee Hunter) Crook-Abel; loving husband of Shirley (nee Lawson) Crook; devoted father of Nicole Von Den Bosch and her husband, Scott and Amanda Post and her husband, Richard; step-father of Samuel Werner, III, Nathan Thorne, Todd Thorne and Marnie Case; dear brother of Helen Kopeck, Marjorie Gross, Trudy Roles, Thomas Crook, III, Joseph Crook and Bill Crook and dear grandfather of Kayla, Lilly, Emma, Ella and Hudson.
Funeral services will be held at the Fellows, Helfenbein and Newnam Funeral Home, P. A., Easton, MD on Monday, August 20, 2007 at 2:00 PM where friends may call from 1-2PM. Burial will be at Spring Hill Cemetery, Easton, MD.

You're not man enough to wipe his shoes. He was a great, hard working American unlike you. And he deserved better than to have to die while worrying whether his wife would get to keep the house.

Posted by jfw1961 | September 24, 2007 11:23 PM

"Maybe...just companies refuse to insure a lot of people in the private market. Does that make SCHIP a subsidy or a last resort? Finding private insurance isn't a problem exclusive to an economic's universal. While I don't necessarily agree with an expansion of S-CHIP, at least somebody is trying to do something about the problem. Get off the sidelines and in the game if you don't like their solution."

And such a bold and honorable attempt it is. Sneak it through the back door in children's pockets.

Posted by Teresa | September 25, 2007 12:39 AM

Hey Nedra Lee... You're an idiot with a capital I if you think that most Americans aren't tired of being screwed over by insurance companies and will vote Republican in November if you just yell, "socialized medicine" enough.

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