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Wednesday, September 26, 2007

Bush's Plan to Sink SCHIP

Ronald Brownstein on Bush's opposition to expanding SCHIP:

Will Bush veto his own priority?, by Ronald Brownstein, Commentary, LA Times: The tragedy in Washington's escalating confrontation on children's healthcare is that the legislation Congress is on track to approve this week with substantial bipartisan support advances precisely the goal President Bush claims as his priority.

Bush ... threatened to veto the bill Congress is completing because he charges it directs too much aid toward middle-income families and would prompt too many of them to drop private insurance and enroll in SCHIP.

But even conservative Senate Republicans such as Utah's Orrin Hatch and Iowa's Charles Grassley have complained that Bush's concerns are, to put it politely, overstated. The best studies of the legislation show that it predominantly focuses its benefits on struggling working families and targets uninsured kids more efficiently than the alternative Bush has touted. ...

Bush is correct that some "crowd-out" of private insurance would occur as parents seek more comprehensive or affordable coverage: the CBO calculates that in addition to the nearly 4 million uninsured kids the final bill would cover, it would also cause another 2 million children with access to private coverage to switch to public plans. That means about one-third of the bill's spending would benefit kids who have, or could obtain, private insurance.

That sounds inefficient, but every effort to expand access inevitably diverts some benefits to people with insurance. Bush, for instance, is touting tax incentives as the best way to increase coverage. But the independent Lewin Group has calculated that Bush's proposal would provide 80% of its benefits to people who already are insured -- and half to families earning $75,000 or more.

Besides, in today's healthcare market, government "crowd-out" hardly seems the most pressing threat. Bush may be worried about middle-class families dropping private insurance, but the bigger problem by far is private insurers dropping middle-income families. The number of uninsured children, after declining steadily since 1998, has soared by 1 million over the last two years. The Urban Institute recently found that 40% of those kids live in the very families Bush wants to weed from the program...

The real question is whether Bush wants an agreement or a fight that paints congressional Democrats as big spenders. Until recently, his administration hadn't worried much about expanding eligibility: Since 2006, it has allowed three states (and the District of Columbia) to extend SCHIP to families earning up to $61,000. Bush's sudden alarm about including those families suggests less a change in policy priorities than a shift in political strategy.

    Posted by on Wednesday, September 26, 2007 at 02:07 AM in Economics, Health Care, Policy, Politics | Permalink  TrackBack (0)  Comments (36)

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