The Veto Came On SCHIP

Friday, October 5th 2007
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The veto of the S-CHIP expansion came with the biggest cry being that it would drive currently privately insured children onto the federal rolls.

The current confrontation stems as much from the White House’s desire to use the bill reauthorizing the State Children’s Health Insurance Program to advance Bush’s proposals to expand health insurance coverage through tax breaks as it does from his budgetary concerns. The idea was a major focus of the State of the Union address, and Bush and his advisers tried throughout the spring to interest lawmakers in attaching the measure to an SCHIP bill.

“Look, I disagree with the [White House] legislative staff on all of this,” said Sen. Orrin G. Hatch (R-Utah), a key negotiator on the vetoed bill. “Frankly, I think the president has had pretty poor advice on this. I can answer every objection that they’ve made, and I’m very favorable to the president. I know he’s compassionate. I know he’s concerned about these kids, but he’s been sold a bill of goods.”

Speaking in Pennsylvania, Bush again made the claim that the expansion would federalize health care and shift the burden of children’s health care from parents/families who could afford health care to the federal government.

What a baloney argument as the Congressional Budget Office has said.

CBO estimates that the legislation would increase the number of children enrolled in SCHIP or Medicaid by a total of 6.1 million by 2012. As noted above, CBO estimates that 4 million of these would be children who would otherwise be uninsured.

In other words, nearly two-thirds (66 percent) of the children who would gain SCHIP or Medicaid coverage under the bill are children who would otherwise be uninsured, not children who would otherwise have private coverage.

CBO estimates that the other 34 percent of the children who would gain SCHIP or Medicaid coverage under the bill otherwise would have some type of private insurance. But as CBO director Peter Orszag and other leading health experts have explained, under the fragmented U.S. health insurance system, virtually any effort to cover more of the uninsured — including efforts that rely on tax deductions or credits for the purchase of insurance in the private market — would result in some crowd-out (i.e., in the substitution of one type of health insurance for another). A crowd-out effect of 34 percent is actually quite modest.

As much as I support the expansion the real concern is for those currently on the SCHIP ledger who are going to lose it without some form of reauthorization.

Though the program officially expired on Sept. 30, emergency funds currently allow the program to continue — at least for the time being.

Congress has already passed legislation which would reauthorize and expand the program by adding $35 billion over five years, and covering an additional 4 million children — a plan funded by raising the federal cigarette tax by 61 cents to $1 per pack.

But the veto has put all of that at risk.