NCPA - National Center for Policy Analysis


April 24, 2007

The State Children's Health Insurance Program (SCHIP) was enacted in 1997 as Bill Clinton's health-care consolation prize after the implosion of HillaryCare.  It expires in September without reauthorization and Democrats are using the opening to turn it into another giant middle-class health-care entitlement.  Call it HillaryCare on the installment plan, says the Wall Street Journal.

  • SCHIP was conceived -- or at least sold -- as a way to insure children from low-income families that aren't poor enough to qualify for Medicaid.
  • Included as part of the Balanced Budget Act of 1997, SCHIP began as a federal block grant of about $40 billion over 10 years.
  • States receive an annual fixed federal contribution, then they match the funds and design their own programs, by expanding Medicaid, creating a separate SCHIP program or some combination; states determine eligibility and benefits; some have premiums or co-pays, usually at negligible rates.

The Bush Administration wants to add $4.8 billion to the SCHIP budget, bringing it to $30 billion over the next five years.  Democrats want to see that and raise by $50 billion to $60 billion.  They pronounce SCHIP "underfunded" -- and sure enough, 2007 funding already falls short of covering enrollees in 18 states by about $900 million.

But this "crisis" arose because some states have grossly exceeded SCHIP's mandate.  They are using the program to expand government-subsidized coverage well beyond poor kids -- to children from wealthier families and even to adults.  And they're doing so even as some 8.3 million poor children continue to go uninsured.

The least we can do now is work to return SCHIP to its original, more modest purposes, says the Journal.

Source: Editorial, "HillaryCare Installment Plan," Wall Street Journal, April 24, 2007.


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