NCPA - National Center for Policy Analysis


September 26, 2007

A successful effort by Congress to expand the State Children's Health Insurance Program (S-CHIP) would require low-income Americans to subsidize health insurance for the middle and upper-middle classes, says David Hogberg, fellow and senior policy analyst at the National Center for Public Policy Research.

According to Hogberg:

  • Both S-CHIP bills passed by Congress take the tax revenues from those under 200 percent of the poverty level and give it to those children who live in families above 200 percent of poverty, likely all the way up to 400 percent of the poverty level.
  • It is not inconceivable that a parent with one child with an income of $13,690 will be funding benefits for two children in a family of four with an income of $82,600.
  • S-CHIP expansion would result in families whose income puts them in the bottom 15 percent of households funding benefits for children who are in families close to the top 25 percent of households.

Hogberg also notes that Congress supports reimbursing states for S-CHIP expenses for middle and upper income children and young adults at a higher rate than it reimburses Medicaid expenses spent on the poor:

  • In 2006, states spent a total of about $132 billion on Medicaid, while the federal government matched that with $165 billion.
  • For that same year, states spent almost $2.4 billion on S-CHIP and the federal government sent the states $4.8 billion in matching funds.

Thus, the federal government spends two dollars on S-CHIP for every one dollar the states spend, says Hogberg.  In short, the federal government spends proportionally more on the children in S-CHIP than it does on the poorer children in Medicaid.

Source: David Hogberg, "SCHIP Expansion: Socialized Medicine on the Installment Plan," National Center for Public Policy Research, September 2007.

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