Children's Care at Risk
The president misses a chance for a sensible compromise.

Friday, September 21, 2007

PRESIDENT BUSH'S renewed vow yesterday to veto an expansion of the State Children's Health Insurance Program was unfortunate. Mr. Bush has been threatening a veto for months now. But with the popular and important program set to expire at the end of the month, and congressional negotiators having retreated from the more aggressive and expensive House measure, Mr. Bush had an opportunity also to offer compromise. Instead, at a guns-blazing news conference, he accused Democrats of "putting health coverage for poor children at risk so they can score political points in Washington" and said the Democrats' plans "would move millions of American children who now have private health insurance into government-run health care."

This argument would be more credible if the president were proposing a renewal of SCHIP that would at least maintain the decade-old program, which is designed to provide health insurance to children in families that earn too much to qualify for Medicaid. Instead, the administration wants an increase of $5 billion over five years, an amount that the Congressional Budget Office has said would fall short of what's needed simply to keep pace with current enrollment levels.

It's important to understand that most of the $35 billion expansion that lawmakers -- including a significant number of Republican senators -- are proposing would go to enroll low-income children in Medicaid and SCHIP. Nonetheless, the disagreement in part involves whether to allow coverage for children whose families earn more than 200 percent of the federal poverty level, about $35,000 for a family of three. The administration argues, with some justification, that offering SCHIP to children in families earning three or even four times the poverty level would encourage some to switch from private to government-paid insurance. Advocates of allowing states more flexibility to set income thresholds above 200 percent of the poverty level point to the differing costs of living and health care in various parts of the country and to the employers who are dropping health coverage or increasing premiums outside the reach of lower-income families.

In this, they have found support in disappointing recent numbers from the Census Bureau, which found that the number of uninsured children grew by 710,000 last year (to a total of 8.7 million) and 290,000 in 2005, this after years of steady decline. A new analysis of the Census figures by the Urban Institute's John Holahan and Allison Cook shows that nearly half the newly uninsured children in 2006 -- 340,000 children -- were in families with incomes between two and four times the poverty levels; 180,000 were in families with incomes between 200 and 300 percent of the poverty level, the group most at issue in the compromise legislation under discussion. According to the Urban Institute study, while the number of uninsured children increased by almost 12 percent in the past two years, the number of uninsured children in families between 200 and 400 percent of the poverty level increased at double the average, almost 24 percent.

In this population, which for the most part is not now eligible for SCHIP, employer-sponsored insurance dropped 1.2 percentage points from 2005 to 2006, from 76.6 percent to 75.4 percent. The administration argues that the solution is to make private insurance more affordable. A worthy goal. But what are the children supposed to do for health care in the meantime?