NCPA - National Center for Policy Analysis


September 7, 2007

With a House and Senate conference committee set to reauthorize the State Children's Health Insurance Program (SCHIP), the question remains as to who the program really benefits, says Steve Stanek, managing editor of Budget & Tax News and research fellow at the Heartland Institute.


  • The legislation would provide health insurance subsidies to families earning up to four times the poverty level -- $83,000 a year for a family of four.
  • The bill also makes major changes to the Medicare Advantage program, physician payment schedules, the Medicare prescription drug benefit and Medicaid.
  • Even though the program's intent is to provide health insurance coverage to children, adults would be allowed to enroll as well.
  • Some states already have more adults than children enrolled in SCHIP.

Further, according to a study released by the National Center for Policy Analysis, the SCHIP tax hikes -- because they are funded in large part by tobacco taxes -- would be heavily regressive, as rates of tobacco use are highest among lower- and middle-income citizens.

"Policymakers should also be concerned with the economic well-being of their lower-income constituents.  One must question the fairness of hiking taxes that are known to disproportionately burden poor families," the NCPA report states.

Source: Steve Stanek, "Billions in Tobacco Taxes to Fuel Expansion of Federal Health Program," Heartland Institute, October 1, 2007.


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