NCPA - National Center for Policy Analysis


July 27, 2007

The State Children's Health Insurance Program (SCHIP) was originally a Republican program to provide health insurance to children in near-poor families who did not qualify for Medicaid.  Democrats now want to expand SCHIP to children of the middle class.  If they get their way, millions of children will have less access to health care than they do today, and the same will surprisingly be true for many low-income seniors, says John C. Goodman, president of the National Center for Policy Analysis.

Why is that bad?  One reason is that most SCHIP programs pay doctors at Medicaid rates -- rates so low that Medicaid patients are having increasing difficulty getting access to health care:

  • Anecdotal evidence suggests that U.S. Medicaid patients already must wait as long for specialist care and hospital surgery as in Canada.
  • Many doctors won't see Medicaid patients, among those that do, many will not accept new patients.
  • As a result, children who lose private coverage and enroll in SCHIP are likely to get less care, not more.

There is also the issue of who exactly will be covered:

  • Republicans want to restrict SCHIP to children; the Democrats want adults covered as well.
  • Even under the current system, children's health insurance is increasingly a ruse to cover adults, for example,  Minnesota spends 61 percent of SCHIP funds on adults while Wisconsin spends 75 percent.

Seniors will suffer from SCHIP expansion too.  When millions shift from private to public coverage, not much happens to the overall rate of uninsurance.  But the government's cost soars, says Goodman.

Source: John C. Goodman, "Insurance Folly," Wall Street Journal, July 27, 2007.

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