ALEXANDRIA, Va. — Few issues generate more political emotion than the need to provide health insurance for children. It is much less expensive to cover children than adults, and healthy children have the best chance of becoming healthy adults.
But that does not mean the government must provide the insurance.
Nonetheless, the new Congress is poised to act on President-elect Obama’s campaign promise to provide universal coverage for children. With the State Children’s Health Insurance Program (SCHIP) due to expire on March 31, Congress is expected to use renewal of the program as a vehicle to require that all children have health insurance.
But expanding SCHIP to cover all children would be a mistake, for four reasons:
First, Congress should make sure poorer, uninsured children are covered first. At least two-thirds of uninsured children already are eligible for SCHIP or Medicaid but aren’t enrolled. If SCHIP were expanded to cover children in higher-income families, their parents would rush to the head of the line to get the taxpayer-subsidized coverage. When a “free” government plan is offered, it’s nearly impossible to resist. Poorer children would be left behind as states focus on enrolling higher-income kids.
Second, expanding the program would “crowd out” the private insurance many higher-income kids already have. Hawaii offers proof. Earlier this year, the state created a new taxpayer-financed program to fill the gap between private and public insurance in an effort to provide universal coverage for children. But state officials found families were dropping private coverage to enroll their children in the government plan. When Gov. Linda Lingle saw the data, she pulled the plug on funding. With Hawaii facing budget shortfalls, she said it was unwise to spend public money to replace private coverage children already had.
Third, putting many millions of children on a government program will quickly lead to restrictions on access to care. A young boy died in Baltimore not long ago from an untreated tooth infection, even though he was enrolled in SCHIP. Few dentists can afford to take SCHIP patients because the program’s reimbursement rates are so low. The boy’s mother couldn’t find a dentist to see him even though he was on SCHIP. In Massachusetts’ move toward universal health coverage, more people have insurance, but they are finding that physicians’ practices are often filled, with waiting lists for a new patient appointment at 100 days and counting. Putting more children on SCHIP will add to the program’s financial pressures, making it harder for poorer kids to get care.
Finally, government insurance means that politicians and bureaucrats, not parents, make decisions about the care children receive and about what services will or will not be covered.
There is a better way: Lower- and moderate-income uninsured families, not just children, need help to afford health insurance. But right now, the deck is stacked against them. They make too much to qualify for public programs, such as Medicaid, but don’t have good, higher-paying jobs that come with health insurance.
They need help in purchasing policies, and that help could be provided through tax credits that are refundable so people get the money even if they owe little or nothing in taxes. And 12-million more people would be able to buy affordable health insurance if Congress were to allow people to buy insurance across state lines. Finally, market fixes could help people with pre-existing conditions to get private insurance.
None of these reforms requires turning our health care upside down or turning it over to the government, but they would provide powerful incentives for families, and children, to get health insurance that they can own and keep with them.
So when the debate over universal coverage for children begins tugging at the nation’s heart strings next year, it would be wise to consider the costs and consequences and look at alternatives that put parents, not politicians, in charge of health care for children.
