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SCHIP: It’s for the Insurance Companies, Not the Children

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Whenever someone in government makes a proposal and says it's 'for the children' you know you're about to be screwed. The 'for the chidren' argument is one of pure emotion and when it's being used you can be sure that there's no rational way to argue for that piece of legislation, usually because it's such a bad idea that based on facts and logic no one would suppprt it.

That's exactly the situation with the State Children's Health Insurance Program which is being considered today in the House and later this week in the Senate. It's a massive handout to health insurance and medical companies to the sum of $35 billion dollars and it's also a back-door attempt to impose a fiscally irresponsible and inefficient national health insurance program on the states whether they want it or not.

The SCHIP program started out humbly enough as an attempt by some states to provide basic health insurance coverage to poor kids. As such it was a bit of a gift to health insurers because the insurance provided under the program was limited, but the original concept of the program was modest and genuinely aimed at the needy who didn't quite qualify for Medicaid. It was taken over by the federal government, but remained relatively limited in scope and expense. It was also given a limited term and as a result has come up for renewal this year. The problem is that rather than just renewing the program as it existed, members of Congress, under intense lobbying from the insurance industry, have decided to go beyond just renewing the program to massively expanding it.

For the Democrats this expansion of the program is an opportunity to get a foot in the door for national health insurance and a number of Republicans are going along because it always looks good to be doing something 'for the children'. But the real driving force here is that those supporting the bill extension get a great many campaign donations from health insurance industry groups who really like the idea of having $35 billion in taxpayer money given to them for a program which is cheap for them to administer and has relatively few claims. What's more, the income they receive is even more than the federal share, because states pitch in billions more for the program and most states also require copayments and small nominal premiums from many of those insured. All told the payoff to the insurance companies is in the neighborhood of $60 billion or more.

The new expansions to the program also take it far beyond the original intent. Rather than being limited just to kids in families with incomes at 200% of the poverty level for their states or lower, coverage is being extended to include continuing program participants up to the age of 25 and family incomes up to four times the poverty level or $82,600 a year, which means a lot more people being covered, many of whom ought to be able to pay for their own insurance without government assistance. The new version of the bill also places more demands and limitations on the state governments, making it essentially an unfunded mandate which will be hard for many states to comply with unless they find ways to charge participants or taxpayers more.

If you doubt who this program really benefits, do a search on the web for SCHIP. What you'll find is hundreds of web pages from insurance companies and insurance industry groups touting the wonderful benefits of the program and overlooking the unnecessarily high costs and marginal quality of the service provided to those insured under the program. The truth is that they see it as free money and an opportunity to move health coverage for the poor away from the federal government under Medicaid and towards a government funded but enormously profitable privately managed program.

At a time when the federal budget is bloated with pork and war spending and running at a significant deficit which ultimately gets added to our staggering government debt, expanding this program which mainly benefits health insurance companies is incredibly irresponsible. President Bush promises to veto the bill unless it is rewritten as a simple extension of the existing program with some additional controls added, but as I write this it is likely that the House has already voted to pass the bill and it will be up for approval in the Senate before the end of the week.

No one seems to be making much of an effort to point out the problems with this program or make lawmakers aware that an expensive expansion of this program is not in the best interests of anyone but insurance companies and government bureaucrats. It's bad enough by itself, but as the first step towards a huge new healthcare entitlement that also funnels tax money to private businesses, it's an outrage.

I urge you to contact your Congressman, Senator or even the White House and make them aware that you demand fiscal responsibility and are not going to fall for the 'for the children' scam this time.

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About Dave Nalle

  • bob

    As a “a capitol hill staffer” you have socialized medicine.

    How dare you talk down a program that would offer healthcare to uninsured children.

    But, hey, taxpayers are paying your healthcare, so why not screw the kids?

    Typical conservative moron.

  • http://www.republicofdave.com Dave Nalle

    As a “a capitol hill staffer” you have socialized medicine.

    Try to pay attention to more than your preconceptions. I haven’t worked on Capitol Hill or in DC for that matter since 1982.

    I’m self-employed running a small business, pay for my own insurance and have two kids.

    How dare you talk down a program that would offer healthcare to uninsured children.

    I’m not ‘talking down’ the SCHIP program, I’m concerned about the massive and unnecessary expansion of the program to include people who don’t need it. At $82K a year you can afford to insure your kids. If you don’t, you’re irresponsible. The program was fine when it was limited to a top income of $41K. Made perfect sense. Those kids need insurance.

    But, hey, taxpayers are paying your healthcare, so why not screw the kids?

    As pointed out above, taxpayers aren’t paying for my healthcare. And that’s just the point. Every additional penny in taxes taken from me to pay for healthcare for kids whose parents CAN afford it means less money for me to pay for healthcare for MY kids. That shouldn’t be the government’s decision to make.

    Typical conservative moron.

    Typical leftist clichemonger?

    dave

  • Doug Hunter

    Nalle,

    The one good thing I see with this is the raising of the income requirements (they should be eliminated from all programs as discriminatory in my opinion anyway) to include real middle class workers instead of simply the economic leeches and welfare class.

    It used to bother my (lower-middle class at the time) parents to no end that they had to strain and struggle with healthcare copays and such for me and my siblings while the lazy welfare moms bragged about the good care they were getting in the ER every week.

    This bill would help people like them.

    If healthcare is a right then everyone should be guaranteed it regardless of income, if not, then none should receive assistance. Same goes for housing, food, etc.

    I think it is possible with our modern ingenuity and productivity to provide the basic necessities of life for every person in the US without sending our system or economy into the tank. The problem is that the bleeding hearts don’t understand the meaning of basic necessities, to them every convenience of modern life is a necessity. A person needs only some old ratty clothes, a cot, a soup kitchen, and a doctor to patch them up. Throw in a basic high school education (as an investment in the future, you don’t want idiots taking care of you at the home) and you’ve given a person everything they need to live a long, healthy, successful modern life.

    In my ideal fantasy world if you want your $200 / month cot space you take it, if you want a $200 /month subsidized housing voucher take that, or if you want a $2400 / year tax credit you should be able to get it. After credits taxes are flat.

    Absolute equality of opportunity and free market that follows. No more incentive for failures. Radical and a bit loonie in it’s idealism, but I’d still like to see the idea tried out.

  • Clavos

    Government run (shudder!) and government “paid” health care, here we come!

    I just hope they don’t outlaw private insurance, as was attempted (and subsequently defeated) in Canada.

  • http://www.republicofdave.com Dave Nalle

    I think you’re on to something with the tax credit idea, Doug. That’s what the president is pushing for. But of course, a tax credit doesn’t help out the truly poor, and he seems not to have thought that aspect through.

    I still maintain that a lot of our problem with healthcare is the result of people who don’t consider healthcare a priority. What I don’t like about the expanded SCHIP is that it rewards those irresponsible middle class people for their irresponsibility. That seems like a really bad idea. People who don’t want to cut their cigarette and beer budget to get health insurance for their kids ought not to be given it for free at the expense of more responsible taxpayers.

    Dave

  • http://drdreadful.blogspot.com Dr Dreadful

    Hmm.

    I’m planning an article that touches on some of Doug’s points in comment 3, but don’t expect to see it for a week or two. I need to do some research.

    And it might come out as something different entirely. You know how writing goes sometimes.

  • Doug Hunter

    “But of course, a tax credit doesn’t help out the truly poor”

    That’s where the either/or portion comes in. You either get the tax credit (pending proof of coverage) or you get the direct subsidized care but not both. Those with very low incomes would forced into the latter. Just a rough idea.

  • http://www.republicofdave.com Dave Nalle

    It’s appealing, Doug. Everything we can do to help people out with healthcare while keeping the straight handouts to a minimum helps stave off the forces who want to put us into a state managed socialized system. There has to be a better way.

    Dave

  • Silver Surfer

    Dave, you are going to get universal health cover, and it will be run by the state.

    Just not operated by it, if you’ll pardon the pun.

  • Clavos

    “Dave, you are going to get universal health cover, and it will be run by the state.”

    As long as people who can afford it are able to continue their private insurance.

  • Silver Surfer

    Yes mate, this is the key. And as long as the bastards let you claim it as a tax break too.

    You don’t need to be paying a double levy – just a bit extra, which is fine if you alos get the benefits AND those offered by your private care.

  • bliffle

    Eventually we will have UHC, not because socialists take over but because everyone will be sick and tired of the huge cost and poor results of our attempts to keep medicine privatized. Indeed, it only is able to mantain the facade of privatization through huge government subsidizes and special protection from ani-trust laws.

    The people who run the “Health Industry” have simply become too greedy. Now, people are more revolted by the billions grabbed by “Health Industry” execs than the pennies swindled by the famous Welfare Moms. A “Health Industry” exec recently retired with a $1.6billion retirement benefit. How many Welfare Moms does it take to make that up?

    It’s time to review the bidding on our private healthcare premises. We supported privatization because private operators should be able to provide less expensive and more responsive medical care and insurance companies should be able to spread the risk.

    But then we undermined the premise by excluding insurance companies from federal control and federal anti-trust, thus undermining competition. Then we undermined the private nature by putting tax funds into schools to train private indivduals at the expense of the general taxpayer without any given benefit to the general taxpayer. Then we allowed insurance companies to arbitrarily exclude people and services, often at the last moment, so they could avoid risk.

    We’ve systematically negated all the premises of healthcare privatization. And what have we learned? There is no way to restore privatization.

    Privatized healthcare is not working. And it cannot work because all attempts to restore it would end up going down the same path. Again.

    Meanwhile, to our chagrin, other countries and societies have proven that a society can have public UHC at reasonable cost and with good results.

    It’s time to face the facts: our attempt at privatized healthcare has failed. Time to come up with a new model.

  • Stephen

    “At $82K a year you can afford to insure your kids. If you don’t, you’re irresponsible.”

    That’s a rather crass, no-exceptions sort of a statement … You shouldn’t write off millions of your fellow US citizens, whom you know nothing about, with such a cavalier attitude.

    Maybe the families making $82K/year have 5 children … or maybe one of their children is disabled and requires higher than normal levels of ongoing care … or maybe they live in California, where $82K.year barely covers rent and groceries …

    Your statement reminds me of conservatives who declare, with no reservations, that “poor people are poor because they are lazy” etc.

  • Brian S.

    The $82,600 (or $83,000) figure comes from a request from New York State to cover children in some slightly higher-income households because of the state’s high cost of living. This is NOT in the final form of the bill. However, the claim is repeated over and over again by everyone from conservative bloggers to the President. Repeating a lie doesn’t make it true.

    But perhaps you’re right, we should go with the conservative alternative… leave the kids uninsured. Then they can be treated in ERs for thousands of dollars for chronic illnesses that could have been easily treated by family doctor visit. That makes the most sense.

    No, wait, lets give the conservatives what they really want… ZERO government control of industry. Then we can get children back into factories and mines where they were at the turn of the last century, before all that anti-business legislation about “safe working conditions” and “child labor laws” were put into place. Once the kids get to work, they can afford their OWN health care!

  • Clavos

    “No, wait, lets give the conservatives what they really want… ZERO government control of industry. Then we can get children back into factories and mines where they were at the turn of the last century, before all that anti-business legislation about “safe working conditions” and “child labor laws” were put into place. Once the kids get to work, they can afford their OWN health care!”

    No, wait, let’s give the liberals what THEY really want: a guaranteed income for everyone, paid by the government and with all “necessities” of life also paid by the government. Let George Soros and Bill Gates and the Kennedys pay the government, so it can pay us, and let’s all go fishing, ’cause if we’ve got a guaranteed, government-paid income, we’d be damn fools to go to work.

    Sounds ridiculous, doesn’t it, Brian?

  • http://handyfilm.blogspot.com handyguy

    Brian is correct – the $83,000 figure applies only to a few cases in NY state and would require waivers unlikely to be accepted. $41,300 is the figure for a family of four in almost all cases.

    The expanded cost of the program would come from states that currently use an income figure lower than $41,300 – under the new bill they would be able to increase it. It varies by state, even though the program is federally financed. [And not nearly all eligible families make use of the program now.]

    So if Dave agrees that the $41,000 figure is OK, he should be ok with the current bill…

    …Which Bush will veto anyway.

    And all the poppycock being thrown around about ‘socialized medicine’ is just [here it comes] a Red Herring.

    Insurance companies make the loudest complaining noises of anybody about universal care, so if they support this, it must be something different. Unless they don’t support this bill as much as Dave claims.

  • http://www.republicofdave.com Dave Nalle

    Brian is correct – the $83,000 figure applies only to a few cases in NY state and would require waivers unlikely to be accepted. $41,300 is the figure for a family of four in almost all cases.

    No Handy, he’s wrong. I just looked up Hillary Clinton’s amendment to the bill. While it may be motivated by the needs of people in New York there are NO state-specific restrictions on who the increase in the threshold applies to. It just changes the multiplier from 200 to 400.

    The expanded cost of the program would come from states that currently use an income figure lower than $41,300 – under the new bill they would be able to increase it. It varies by state, even though the program is federally financed. [And not nearly all eligible families make use of the program now.]

    It doesn’t vary by state in the bill. The proposal remains to set a top limit of $82,600. It’s just up to the states whether they want to use that limit or stick with the required minimum of $41,3000.

    And all the poppycock being thrown around about ‘socialized medicine’ is just [here it comes] a Red Herring.

    Only because so much of the control of the bill has been left in the hands of the states and they have chosen to structure their implementation so that private insurers are the providers under SCHIP. You will not that I did NOT complain so much about socialized medicine in the bill, but about the fact that SCHIP has turned into a handout to the insurance companies.

    Insurance companies make the loudest complaining noises of anybody about universal care, so if they support this, it must be something different. Unless they don’t support this bill as much as Dave claims.

    As I pointed out in the article, most of the money from the bill is going to them, that’s why they are so enthusiastic about it. It’s like a no bid government contract feeding cash right into their pockets.

    Dave

  • http://handyfilm.blogspot.com handyguy

    Let’s throw some more facts into the ring:

    “…Senator Charles E. Grassley, an Iowa Republican and co-author of the bill, said that under the compromise, a state could set its income limit at $80,000 only if the secretary of health and human services gave approval. New York is the only state that has proposed such a high limit, and the Bush administration denied its request on Sept. 7.” – NY Times, 9/25

    In addition, the bill raises the cigarette tax from 39 cents to $1.00 per pack, to cover the extra SCHIP costs. The Feds pay for 70%, not 100%, of the program. The bill also includes provisions to move some adults from SCHIP to Medicaid.

    And, repeat, Bush is going to veto it anyway…Bush is going to veto it anyway…Bush is…

  • http://www.republicofdave.com Dave Nalle

    The Times must be privy to some secret information I’m not aware of, because the amendment clearly changes the limit and does not specify a need for approval from anyone but the legislator of the state taking advantage of the higher limit.

    Dave

  • http://jec.senate.gov/State%20by%20State/September%202007.htm Cindy D

    Come on now. We need 190 billion just over the next year to keep us in Iraq. We need 30 billion over the next 10 years to give to Israel. We have already spent 450 billion on Iraq. Some people must think money grows on trees.

    Clearly, we have got to stop spending somewhere. It would be “fiscally irresponsible” of Bush approve 35 billion over 5 years for children’s health. I say it’s time we get tough on the middle class (the greedy bastards). After all don’t those marginal middle class people know that we have already spent all of their money on more important things?

    “Health insurance premiums have risen four times faster than wages over the past six years.”

    “…workers’ wages are only marginally higher than they were 25 years ago…”

    “Under this [the Bush] administration, there has been a sharp divergence between the fortunes of companies and the paychecks of their workers.”

    –U.S. Congress Joint Economics Committee

  • http://handyfilm.blogspot.com handyguy

    Yeah, well, they’re the NY Times, sneaky liberal MSM dontcha know. And that Grassley, what a MoveOn-sympathizing radical he is, boy.

    Did I mention that Bush is gonna veto this anyway…?

  • kch

    “…Maybe the families making $82K/year have 5 children”

    Then I say the parents are even more irresponsible. If you cannot afford to properly support 5 children, then you should not be having 5 children. Not push the tab to the tax payers so you can have a few more children.

    I do think that 82K means something very different in different geographical areas. In rural Montana you should be able to fully support yourself and your children with proper money management (you have different problems, like finding providers); but in expensive urban areas 82K doesn’t stretch as far.

    Possibly some type of geographical adjustment, like the government does for federal employees pay, could be a solution instead of just continuing to raise the % coverage.

  • http://www.republicofdave.com Dave Nalle

    Of course, if you live an expensive urban area you can always move somewhere else, something Americans no longer seem to factor into their planning.

    Dave

  • http://handyfilm.blogspot.com handyguy

    Prediction: Bush will veto this one, but a compromise will appear, smaller than this bill but larger than Bush’s requested $5 billion increase. And he will sign it and pretend it’s a triumph and that he’s so happy to help them lil kiddies.

  • http://www.republicofdave.com Dave Nalle

    Handy, that’s the way the process works. Bush is a past supporter of SCHIP, remember. Texas was one of the first states to implement it when he was governor. And I do think a compromise would be a fine idea. Cut the program off at 18 and limit it to incomes of no more than $41K a year and it’ll be just fine. Throw in a better tax break for people who have higher incomes and get their kids health insurance and it would be even better.

    Dave