Michael Tanner: Kids first step to national health care

President Bush has followed through on his threat to veto an expansion of the State Children’s Health Insurance Program. Predictably, Democrats accused him of, in the words of Senate Majority Leader Harry Reid, “depriving millions of poor children of health care.” But even setting aside the fact that health insurance and health care are not the same thing – as the hundreds of thousands of patients on waiting lists in countries with national health care can attest – the SCHIP expansion has never been about helping poor children.

Indeed, despite the big “C’ for “Children” in the program’s name, 12 states currently use SCHIP funds to provide taxpayer- funded insurance for adults. According to data released by the Department of Health and Human Services in July, Wisconsin covers almost twice as many adults as children – and spends 75 percent of its SCHIP funds on them. Minnesota spends 63 percent of its SCHIP funds on adults. In New Jersey, it’s 43 percent.

Nor is the program targeted to the poor or those most in need. Under the proposed expansion, taxpayers would be subsidizing insurance for middle-class families earning as much as $82,000 for a family of four. This is an extension of what amounts to welfare benefits well into the middle class. And, ironically, this expansion of benefits is theoretically funded primarily through a tobacco tax – which is highly regressive, falling hardest on low-income Americans.

Even worse, according to a study in the journal Inquiry, six out of every 10 children covered under SCHIP already had private coverage. SCHIP merely encourages their family or their family’s employer to drop private coverage and switch to the government program – at taxpayer expense. Increasing eligibility will only worsen this crowding out effect. At the upper levels of the proposed eligibility expansion, fully 89 percent of children already have private insurance.

That is what the battle over SCHIP is really about. Many of the program’s supporters see it as the first step in creating a full-blown government-run national health care system. A memo from Hillary Clinton’s secret 1993 health care task force called for a “kids first” approach to bringing all of American health care under government control. Since then, national health care advocates have seen children’s health insurance as the camel’s nose under the tent for a wider program.

And those plans are well under way. Already nearly 45 percent of all American children are enrolled in government health programs such as Medicaid and SCHIP. Under the proposed expansion, 70 percent of children would be pushed into government-run health care. At the same time, Clinton and others are calling for opening Medicare to people younger than age 65. Thus, private health insurance will be squeezed from both the top and the bottom.

Of course we all like to see more children, indeed more Americans of all ages, have easier access to affordable health insurance. But getting there means eliminating the expensive government mandates and regulations that drive up the cost of insurance, not increasing government subsidies and control. For example, Congress can repeal the barriers that prevent families living in states like New York and New Jersey, where regulations have made insurance particularly expensive, from buying policies in lower-cost states. And Congress could provide a tax break for families who buy insurance separate from their employers. Health savings accounts can and should be expanded.

Congressional Democrats have scheduled a vote to override the president’s veto for Oct. 18. Between now and then, we can expect a great deal of wailing and gnashing of teeth over the plight of the children. Congress should ignore the rhetoric and uphold this veto.

This time, let’s not do it for the children.