Coverage for Kids: A Piece of the Healthcare Debate

Do your children have health insurance? More than eight million American children do not.

There’s a big fight in Congress about the State Children’s Health Insurance Program (SCHIP), whether it should be expanded, and if so, how to pay for it. For some, the issue is kids’ health. For others, it’s the first step toward government guarantees for health care. And for some, it is both – pro and con.

The Cost of Coverage

It’s a well know fact that health care costs are rising overall in this country, and the costs covered by SCHIP are no exception. House Energy and Commerce Chairman John D. Dingell (D. Michigan) has proposed a bill that would cover more children who can’t afford private insurance but whose parents make too much money to qualify for Medicaid.

At issue is the “pay as you go” or PAYGO rule that both the House and Senate agreed to in 2007. PAYGO requires any new mandatory spending or tax cuts to be fully offset by cuts somewhere else in the budget.

PAYGO

Democrats have used the rule as the basis of their promise to govern in a fiscally responsible way, and so far they have been following their campaign promise. The rule’s adoption has won praise from deficit watchdog groups.

However, the SCHIP expansion bill is proving that PAYGO can be a difficult promise to fulfill, but Democrats claim they have kept the House bill budget neutral by cutting back on several programs.

A savings of about $35 billion comes from cutting Medicare payments to doctors, which would reduce costs substantially in years six through 10 of the budget analysis.

Approximately $30 billion in additional savings would come by eliminating, after five years, a program that gives states bonus payments for enrolling children in the program.

Shifting Party Priorities

Conventional wisdom holds that Republicans don’t care about social issues, while Democrats tax and spend on them excessively. The battle over SCHIP has become a flashpoint for both parties in part because it highlights these old stereotypes and shows voters how they have shifted. Every candidate for President in both parties is for watching the money – fiscal responsibility. However, no one wants to be against sick children.

Fiscal Responsibility – Not Just for Republicans

Dingell would help offset the cuts by increasing the tax on tobacco 45 cents per pack, to a total of $27 billion. The plan would also make cuts to Medicare Advantage, in which seniors opt out of traditional Medicare and receive their Medicare benefits through a private health plan. Private plans like these often offer extra benefits like savings on glasses and dental care, but with higher co-pays for all medical care (sometimes much higher). And they cost the government more of our tax dollars too. The government pays private plans an average of 12 percent more per beneficiary than it costs to cover people enrolled in traditional Medicare – as an incentive to insurers.

But the SCHIP expansion would go beyond these offsets, likely violating the PAYGO rule.

Plus, Republican’s realize that reauthorizing SCHIP and providing health insurance to over 5 million more poor kids could prove to be a popular move with voters. By focusing on the high costs of SCHIP expansion, Republican senators as well as House representatives hope to both deny the Democrats a popular legislative victory and convince voters that the Republicans are the party of fiscal responsibility, after all. Individual Responsibility

Republicans say that Dingell’s bill will encourage families with private health insurance to drop their health coverage and apply for SCHIP. It would be unfair, they say, to shift the responsibility to taxpayers in this way. But Democrats say the more than 8 million children without health insurance are the priority – and that funding coverage is, and should be the responsibility of government, which is all of us.

What’s in a name?

Party differences are coming to light in the re-naming of the program as well. Currently known as the State Children’s Health Insurance Program, Democrats would like to remove the word “State” and leave the CHIP.

Republicans argue that “State” signifies local control and flexibility. Removing the “S” in SCHIP they say, suggests that the federal government is going to take care of every child. They feel it’s a step towards government-sponsored health care.

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Alternatives

Dingell’s plan to expand SCHIP coverage isn’t the only option being discussed in Congress.

Democrat Allen Boyd of Florida has an alternative bill that would make sure that no child would lose coverage who currently has it, but it would not necessarily cover more children. The cost would be considerably less, at $10-12 billion for five years.

Even less expensive (but we’re still talking about billions) is the Republican alternative, proposed by Joe L. Barton of Texas. His plan would cost $5-$10 billion over five years, and this money would come from cuts to Medicare and Medicaid. Further, Barton’s plan would prevent families from crediting expenses like child care and car payments to qualify for SCHIP.

The measure would also cancel SCHIP coverage for adults beginning in 2009. Wisconsin began enrolling adults in SCHIP since it already had a health insurance program for children but wanted to receive its full SCHIP allotment. Wisconsin argues that when adults receive health coverage, their children are more likely to be covered. In May 2007, the Bush administration granted a waiver to Wisconsin allowing the state to continue covering adults through SCHIP, even though the administration's official position is that the program should cover children exclusively.

Coverage for Kids in Context

The debate over SCHIP is a piece of a much larger issue: how to provide affordable health care and adequate coverage for the growing population of Americans who can no longer expect to receive coverage through employers.

WomenMatter will continue to track the debate.

What do you think?

Congress is debating SCHIP now!!! Weigh in with your representatives.

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