George Bush, as well as some members of Congress, is being portrayed as the mean overlord of the orphanage from the movie Oliver. Standing before them is the SCHIP program, holding out a bowl and asking “Please sir, may I have more…..” So the question begs to be asked, “What is SCHIP anyway?”SCHIP (The State Children s Health Insurance Program) was orginally an entitlement program designed for families who earn too much money to qualify for Medicaid, yet cannot afford to buy private insurance. The program was originally created to address the perceived growing problem of children in the United States without health insurance. At its creation in 1997, SCHIP was the largest expansion of health insurance coverage for children in the United States since Medicaid began in the 1960s. SCHIP has since been expanded to allow certain adults to participate in the program as well, even if the family can afford private healthcare.
SCHIP is suppose to be a partnership between the Federal Government and State Government. What that means is that the Federal Government provides the funds (courtesy of the US tax payer), and with some oversight (very little however), the States decide how to administer the program within very flexible guidelines.
The trouble is that we take personal accountability out of the equation when we establish entitlement programs, such as SCHIP. Is it any wonder enrollment in all of these programs continue to grow inequality compare to the increase of the legal population of the United States?
Mind you President Bush is not opposed to funding the program, or for that matter reducing financial support. President Bush proposed an increase SCHIP funding by $5 billion, from $25 billion to $30 billion. But Democrats in the House passed a bill tripling spending to $75 billion. The Senate bill simply increased spending by more than 100 percent to $60 billion.
Not only have Democrats increased the funding request for a program that supposedly was to help poor children get health insurance, but it would also finance subsidies to families earning as much as $82,000 a year. Additionally, around 50 percent to 60 percent of the children newly covered under this expansion of SCHIP are already covered by private insurance today. So the massive SCHIP expansion mostly involves a takeover of private insurance coverage by government coverage.
Under this SCHIP expansion, the estimated cost of covering each new child not currently insured would be as much as 3.5 times the cost of private coverage. Proving once again that the private sector will always be more efficient than either the Federal or State government, and illustrates that we are merely throwing money at a problem hoping some of it gets to those truly in need of assistance.
People opposed to a $25 billion dollar increase to SCHIP are being unfairly characterized as “anti-child,” which couldn’t be further from the truth. There are two core problems related to the increase funding, or for that matter the program itself:
Fraud - The United States General Account Office Estimates that medical fraud and abuse equals $100 BILLION dollars! The lack of control over these funds, and the lesafair approach taken by States as to how the funds should be used is alarming.
Tax Increase – How exactly are we going to pay for this $25 billion dollar increase? Tobacco tax increases. The bill passed by the House would raise taxes on cigarettes by 61 cents a pack to $1 and raise it up to $3 on a cigar (this is just the federal tax, we have to remember that each State has their own tobacco tax). But this tax will affect the exact population it purports to be helping. What Congress is doing is playing Robin Hood; the only problem is they are stealing from the poor, to give to the poor (?)! Facts (according to the Census Bureau):
42% of the people below the poverty level smoke
36% of Medicare recipients smoke
31% of adults who did not graduate from high school smoke
The tax increase would raise the average pack of cigarettes from $4.65 to $5.65. But how does it affect those living within the income brackets that would benefit from SCHIP:
One pack of cigarettes a week: $5.65 X 52 weeks= $293.80 a year wasted
Two packs of cigarettes a week: $5.65 X 2= $11.30 X 52= $587.60 a year wasted
One pack of cigarette a day: $5.65 X 7= $39.55 X 52= $2056.60 a year wasted
If a 40-year old smoker quit smoking and invested that money in a 401(K) plan it is estimated that they would have $250,000.00 in the plan at age 70. Just think how else that money could be spent, yet the smoker chooses to throw that money away, just like Congress will be doing by enacting their funding recommendations.
But I digress. The United States is already facing an unmanageable crisis of runaway costs in the entitlements programs we already have. The Congressional Budget Office projects that without basic reforms Federal spending will soar over the next 35 years or so from 20 percent of GDP today, where it has generally been for over 50 years now, to close to 40 percent. That is primarily due to our major entitlement programs Social Security, Medicare, and Medicaid. Paying for all of this increased spending would require Federal taxes to double as a percent of GDP. How would that affect prosperity in America?
The reality is that it is not the lack of funds that are harming our children. It is the fraud, abuse, and personal choices made by some current recipients that have created many of the funding crisis’s in America. Throwing money at the problem is not the solution, there are too many undeserving beneficiaries standing in the way.
In the end the bill will pass, the President will veto it, and he will be demonized in the media and by the Democrats; in large part because they equate compassion with money. SCHIP, and many other entitlement programs, do nothing more than continue to keep another generation of the Great Society in bondage.
For more information on the true cost of the proposed SCHIP funding read the following article: Heritage Foundation - Crowding Out of SCHIP
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