NCPA - National Center for Policy Analysis


October 1, 2007

The use of children for political purposes hangs over the understandable, well-meaning desire to make sure uninsured kids have health care coverage through expansion of the State Children's Health Insurance Program (S-CHIP).   But there are reasons for opposing the measure, says the Chicago Sun-Times.


  • Some states have gamed the system; for instance, Illinois adheres to the original poverty threshold, $41,300, while in neighboring Missouri, the program is open to families earning up to 300 percent of the federal poverty level, or nearly $62,000.
  • The congressionally approved expansion would offer government-funded insurance to families earning above the median family income in 2005 of $56,000, or 300 percent above the poverty line; furthermore, New York wants to make the cutoff at 400 percent.

Then there's the question of why Congress would want to transform the program into a middle-class entitlement when it doesn't yet cover all poor kids.  It is, after all, a voluntary program, and getting the message that it's available to the targeted families and signing up all the eligible ones have proved difficult, says the Sun-Times.

Finally, expansion of the program would be funded with a 61-cent increase in the tobacco tax:

  • While it might raise money for the federal government, increasing the cost of a pack of smokes would have the admittedly good effect of causing some Americans to quit.
  • The bad news is that would cut into state tax revenues from tobacco; the Heritage Foundation estimates the tax would cost Illinois more than $20 million annually.
  • Also, smoking is mostly a lower-income vice, so the program's expansion would have the perverse effect of raising taxes on the relatively poor to pay for middle class health-care coverage.

Source: Steve Huntley, "Expansion of health care for kids unwise," Chicago Sun-Times, September 30, 2007.


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