Is SCHIP a Gateway Drug to 'Socialized Medicine'?July 6, 2007 - by Donny Shaw
It’s perfect timing. The initial 10-year authorization of one of the government’s biggest health care initiatives, the State Children’s Health Insurance Program, or SCHIP, is scheduled to run out on September 30th, and Congress has been working behind the scenes to reauthorize it.
SCHIP is designed to provide health care for children whose families make too much money to receive Medicaid, but not enough to afford private insurance. The Senate Finance Committee, who is responsible for approving a reauthorization proposal for the whole Senate to debate, hoped to have decided on a proposal before the Independence Day recess. They didn’t. Because of factors including the recent release of Michael Moore’s film ‘Sicko,’ the issues surrounding the reauthorization bill have blown up and the discussions have come to a grinding halt. Now that the process has slowed, we can all watch the Finance Committee and the Senate play out a debate that, in the coming years, looks likely to become more and more the national debate.
Check out Robert Novak’s column,
“Wisconsin covers almost twice as many adults as children _ and spends 75 percent of its SCHIP funds on them,” he wrote in The Hill, a Capitol Hill publication. “This might make sense if SCHIP funds were actually reducing the number of uninsured. But the farther SCHIP moves away from its initial target, the more it ‘crowds out’ private insurance.”“>The end game is socialized medicine for all the ‘kids,’” for a good primer on some of the issues and rhetoric being dragged into the debate. It starts:
>There is no need to wait until a new president is elected next year for the great national health care debate. It is under way right now, disguised as a routine extension of an immensely popular, noncontroversial 10-year-old program of providing coverage to poor children. In fact, this proposal is the thin edge of the wedge to achieve the longtime goal of government-supplied universal health insurance and the suffocation of the private system.
SCHIP for Adults
Novak goes on to explain that the reauthorization stalled because of two disagreements: how much to expand the program and how to pay for the expansion. A recent edition of Congress Daily ($) explains that Republican senators will be coming back from recess with a plan to gum up the SCHIP debate for another reason: it covers some adults as well.
>The conservatives see SCHIP expansion as a stealth attempt at universal health care akin to the failed 1993 proposal by Sen. Hillary Rodham Clinton, D-N.Y., when she was first lady. “They’re building the war room under the banner of, quote-unquote, children,” a Coburn aide said. “SCHIP expansion is the clarion call for Hillary-care Part Two.” The price tag for Democrats’ goal of covering all uninsured children is about $50 billion over five years. Coburn’s aide said conservatives want to reauthorize SCHIP at its current level, which would require about $5 billion to continue the enrollment of kids already in the program.
>DeMint sees the SCHIP expansion as an attempt to expand government health coverage to adults instead of encouraging them to buy insurance in the private market. “The Democrats are going to be pushing expansion of this government SCHIP. That’s not good enough, and the president said it’s not good enough. We need to get everyone insured. We don’t need to just cough up some more government programs and pretend it’s for children when most of it’s for adults,” DeMint said last week.
Because of the way SCHIP is set up, the states have a lot of jurisdiction with how the money is used. Currently, 14 states allow some poor adults to be covered under SCHIP. Many Republicans see the fact that some adults are now being insured by SCHIP as a sign that, if it were expanded, much of the additional money would go to adults instead of children. But their position is complicated by the fact that President Bush has been the one authorizing coverage for adults:
>Even as the Bush administration laments the expansion of a children’s health insurance to adults, it has granted fresh permission to cover them.
>Fourteen states now cover adults through the State Children’s Health Insurance Program. Wisconsin is one of them. On May 30, the state got a Medicaid waiver that would allow it to continue that practice.
>One week later, Health and Human Services Secretary Mike Leavitt singled out Wisconsin as an example of how the program has expanded well beyond the low-income children it was intended to serve.
>"Wisconsin covers almost twice as many adults as children and spends 75 percent of its SCHIP funds on them," he wrote in The Hill, a Capitol Hill publication. “This might make sense if SCHIP funds were actually reducing the number of uninsured. But the farther SCHIP moves away from its initial target, the more it ‘crowds out’ private insurance.”
SCHIP from Smokers
Because the new Congress established PAYGO budgeting rules for entitlement programs such as SCHIP, they are required to offest the cost of any spending increases for the program. In March, the Senate approved a theoretical plan to increase taxes on cigarette sales for the sole purpose of increasing SCHIP funding. The plan was only theoretical because it was attached as an amendment to the 2008 budget resolution, a bill that sets fiscal goals without any weight of law.
According to the plan, proposed by Gordon Smith (D-OR), tobacco taxes would increase by 61 cents to total $1 per pack. Besides helping to pay for a SCHIP expansion, the tax would encourage people to quit smoking. Groups who support the new tax, such as the American Academy of Family Physicians, are quick to point out these facts:
>"Studies show that every 10-percent increase in the price of cigarettes reduces youth smoking by 7 percent and overall cigarette consumption by 4 percent," say the letters. “Increasing the tobacco tax will also generate hundreds of millions of dollars in health care savings because fewer smokers mean fewer people with strokes, heart attacks, cancer and other smoking-related health conditions.”
Not surprisingly, the tobacco industry is lobbying hard against the plan. Since they are not the most popular industry, they are publicly taking the position that the tax will hurt the states. Here’s what the National Association of Tobacco Outlets has to say:
> [A] 2007 Congressional Budget Office report estimates that for every 10 percent increase in the price of cigarettes, national cigarette sales volumes will decline by up to 5 percent. Since the proposed 61 cent per pack tax increase is actually closer to an average 14 percent price rise, national cigarette sales volumes may decline by up to 6 percent or more based on the CBO report calculations. With a 6 percent sales decline, each state’s cigarette and tobacco tax collections would decrease by a similar percentage and the annual tobacco settlement payments would also be reduced because these installments are based on national cigarette sales volumes.
>Many states have learned that an excessive increase in cigarette and tobacco taxes results in a shift to black market cigarette trafficking and an elevated risk of store robberies because of the higher value of cigarettes and tobacco products. Also, cigarette and tobacco taxes are very regressive and have a greater impact on lower-income citizens who choose to purchase legal tobacco products.