Children's Health Check

Monday, October 1, 2007

PRESIDENT BUSH appears determined to veto the $35 billion expansion of the State Children's Health Insurance Program that the House and Senate approved last week. Although there's scant hope of changing the president's mind, here's a fact-check of some of the administration's arguments against the measure.

Claim: "Their proposal would result in taking a program meant to help poor children and turning it into one that covers children in households with incomes of up to $83,000 a year." -- President Bush

Actually, the measure would limit enrollment in the program to children in families making up to three times the poverty level -- about $64,000 for a family of four. The $83,000 number comes from a request by New York state, which the administration denied, to cover children with family income of up to 400 percent of the poverty level.

New York's request could conceivably be grandfathered into the new bill. But the larger point is that the focus of the program would remain children in lower-income families that earn too much to qualify for Medicaid. Of 5.8 million children who would be added to SCHIP or Medicaid under the measure, 4.7 million would be among those already eligible for the programs, according to the Congressional Budget Office. In other words, the added beneficiaries would come overwhelmingly from households making less than twice the poverty level.

Claim: The bill is aimed at "taking children who are currently insured by private insurance and moving them to government insurance." -- Health and Human Services Secretary Mike Leavitt

This "crowd-out" risk is real and inevitable in a public insurance program. The CBO estimates that of 5.8 million children who gain public coverage, 2 million -- 35 percent -- would otherwise have had private insurance. The effect is higher, 50 percent, for the 1.2 million newly eligible enrollees. The question is whether, given the growing ranks of uninsured children -- almost 1 million in the past two years -- this unavoidable result is worth the increase in coverage. We believe it is.

Claim: The bill has an "unrealistic . . . spending cut gimmick." -- administration fact sheet

Yes and no. The legislation would extend the program for five years, and the costs would be fully covered by a 61-cents-a-pack increase in the tobacco tax, which is a good idea in itself. However, because the higher tax would further reduce smoking, that funding isn't enough to cover the following five years, 2013-17, which have to be accounted for under budget rules. To make the program fit the available funding, the proposed spending during that second five years is artificially reduced.

Claim: "The administration strongly supports . . . SCHIP's original purpose of targeting health care dollars to low-income children who need them most." -- statement of administration policy

The administration's proposal, to increase spending by less than $5 billion over five years, would fall $14 billion short of what's needed to maintain existing coverage in SCHIP alone -- never mind adding the millions of eligible but uncovered children the president once said he was determined to sign up. Where's the commitment in that?

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