HillaryCare Installment Plan
The Schip strategy for government-run health care.
Tuesday, April 24, 2007 12:01 a.m. EDT
Any doubt that "universal" health care has returned as a dominant political issue vanished with last month's forum for Democratic Presidential candidates in Nevada. "We need a movement," Hillary Clinton declared. "We need people to make this the No. 1 voting issue in the '08 election."
She and her friends in Congress are already working on it, notably by proposing to greatly expand 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.
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 Schip legislation defines potential recipients as children in families making twice the federal poverty line, or $41,300 a year for a family of four. But states are encouraged to apply for waivers to allow for more flexibility. Now 15 states have eligibility thresholds above 200% of poverty, and nine of those are at or over 300%. In New Jersey, the figure is 350%. New York recently passed a budget raising eligibility to the highest in the nation at 400%--or $82,600 for a family of four. That's an income close to what Democrats usually define as "rich" when they're trying to raise taxes.
Some states are using Schip to create universal child health programs, regardless of need. Governor Rod Blagojevich recently expanded the Illinois Schip program to insure all children, with premiums and co-pays based on parental income. Pennsylvania's "Cover All Kids" and Tennessee's "Cover Kids" programs do the same.
As of February 2007, the Government Accountability Office found that 14 states were using Schip to cover adults: pregnant women, parents of Medicaid or Schip kids--and even childless adults. Arizona, Michigan, Minnesota and Wisconsin cover more adults than children. In 2005 Minnesota spent 92% of its grant insuring adults, and Arizona spent two-thirds the same way.
And no wonder: The Schip funding structure provides incentives for running over budget. In three-year periods, all unspent Schip allocations across the 50 states are tallied up and redistributed. A state that exceeds its allotment gets more money from a state that didn't. In the 14 states that went over budget in 2005, 55% of Schip recipients were adults.
We're all for federalism, and if states want to raise taxes to pay for government-run health care, they have every right. The problem is when they exploit federal policy loopholes to do so and thus stick taxpayers in more responsible states with a larger tab. In 2005, 28 states received an extra grant, either through redistribution or the feds picking up the check for overruns. Thus the federal government pays about 70% of total Schip outlays, despite the premise of "matching" state grants.
A bill introduced by Senator Clinton and Representative John Dingell would make all of this worse. It would index government Schip outlays to national health spending and growth in states' child population. Without "quantifiable" progress--i.e., expanded rolls--funding drops. The legislation would also create incentives for states to expand Schip to the New York level of 400% of poverty. If this keeps up, a family will soon be eligible for Schip and subject to the Alternative Minimum Tax.
In other words, what began as a hard-cap grant to cover the working poor is evolving into an open-ended entitlement to cover whatever promises states make. And all under the political cover of helping "children." Instead of debating government-run health care on its merits, Democrats are building it step by step on the sly. Or as Mrs. Clinton put it in Nevada, "Make no mistake. This will be a series of steps."
There's a lesson here for Republicans, who agreed to create Schip in a trade for Mr. Clinton's signature on their "balanced budget." Balanced budgets vanish in the blink of an election, while entitlements like Schip live on and expand as an ever-larger claim on taxpayers. Mark this down as another case in which Bill Clinton outfoxed Newt Gingrich. The least Republicans can do now is work to return Schip to its original, more modest purposes.
opinionjournal.com
Here is some background information on Hillary Care and its destructionof the vaccine industry in the US.
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