Round One on SCHIP

This past week, the process of reauthorizing the State Children’s Health Insurance (SCHIP) bill began.  People wonder how there can be disagreement over a program to help poor children.   There is no disagreement about helping poor children.  The ruckus is more about children who are better off, and a question of governments’ proper role. 

SCHIP was intended to cover poor children; those with family incomes under 200% of the poverty level ($42,000 for a family of four).  The bill Congress passed redefines who is considered poor to include some families of four who make up to $83,000.  Incidentally, a fellow jokingly pointed out to me that many families who make $83,000 a year have to pay a special tax on the rich, called the alternative minimum tax.  “Only in Washington can you be rich and poor at the same time,” he said.

The controversy stems from the fact that most of the children in this income category already have private health insurance.  Late last week, the Congressional Budget Office issued a new financial analysis of the SCHIP bill Congress just passed.  They predict over the next five years, 800,000 children who are currently eligible, but not insured, will enroll in SCHIP.  However, 1.1 million children will DROP PRIVATE INSURANCE so they can enroll at taxpayer expense.  SCHIP should help uninsured poor children get private insurance, not motivate insured children with private insurance to cancel it and move to public assistance.

The President has said he will veto this bill.  Congress will then conduct an override vote, first in the House of Representatives.  I read this morning that:  Roy Blunt, a member of the Republican leadership in the House of Representatives, quoted projecting a 100% probability the veto will be sustained. 

The drama around vetoes and overrides are just the way Washington conducts a conversation and debate.  It generally creates an improved work product.  That will certainly be the case here.

In 1995-1996, I was Governor of Utah and deeply involved in welfare reform.  We went through a similar period of time.  Like today, there had been a change of power in Congress and the parties shared power.  My party, the Republicans, who had just assumed control, acted as if they could pass legislation without the Democrats.  President Clinton vetoed the welfare reform bill a couple of times.  Ultimately, everyone came to understand that accomplishing anything in a divided government requires bi-partisan work.  After a few attempts to simply roll over the Democrats, the Republican leadership got serious about finding compromise.  It appears we’re going through the same experience again but now with roles reversed. 

This debate isn’t about who cares for kids most or just about money.  It’s about different philosophies about the role of government.  Clearly, some people want the federal government to run health care.  They think taxpayers should pay to insure everyone.  Many others (the President and I among them) believe government should help people in hardship (the poor, elderly and disabled) and organize a private insurance market that allows people to choose affordable insurance plans that fit their needs.

Am I saying everyone who voted for the reauthorization bill wants the federal government to insure everyone? No.  For many members of Congress this wasn’t about philosophy or high principle; it was a political calculation.  They simply didn’t want to deal with the vocal and well orchestrated wrath of the advocacy groups who clearly do want Washington run health care, and who see SCHIP as the best chance in years to advance their cause.  These groups wrongly and unfairly paint those who favor reauthorization but not expansion to children in better off homes—as hostile to children.

I talked to several who voted for the bill.  Many of them expect competitive elections in 2008 and knew enough other members of Congress would vote to sustain the President’s veto.  This was a way to “have their cake and eat it too.”  Others who voted for the bill told me their reasoning was essentially this: “If we vote for a bad Senate version of the bill, it will save us from a disastrous House version which was truly over the top expansion.” 

That’s the way Washington works, everybody doing their own political calculus.  This kind of situation is exactly why the founding fathers of our nation provided for a veto.  It is a tool to keep unwise things from occurring when dynamics of politics might propel them forward otherwise.  The President’s veto is the right thing to do.  SCHIP will be a better program in the future as a result.  Ultimately, more people will get health insurance as well, because rather than just moving those who have private insurance to government insurance, we will focus on the uninsured and get on to the bigger discussion of getting every American insured. 

To learn more about our Every American Insured priority, visit www.hhs.gov/everyamericaninsured.

Comments

Mr. Secretary,

One idea off the top of my head and humbly speaking probably flaws…create an incentive where those who are privately insured but under a certain income receive a degree of reimbursement for their co-payments and deductibles. The more an individual or family pays for a policy, the more they may be reimbursed their out-of-pocket expenses (a skewed formula no doubt).

People would strive to afford the best policies they possibly can afford in order to receive the biggest reimbursement. The responsibility for health care would remain with the individual or head of household and there would be less "government" involved. This sounds like a winning solution for children, families, insurance companies and society in general.

I would much rather keep my private insurance but my choice is keep my insurance that I cannot afford to use or drop the insurance and bank the money in case I need to go to the doctor. The latter solution is least preferable because prevention goes by the wayside. Prevention is best for society overall.

Your blog is fascinating, by the way. Please keep up with these thought provoking topics.

Posted by: standingfirm | October 01, 2007 at 04:20 PM

The comment, that: "more people will get health insurance" if the president's veto of SCHIP holds, is completely innacurate. The history of health insurance consistently shows that left to the marketplace, and without government intervention, the current numbers of uninsured children in the United States would me much higher.

Posted by: Charles Joffe-Halpern | October 02, 2007 at 11:38 AM

Mr. Secretary-

You can make your case about reauthorization vs. expansion, but adoption of the President's budget proposal would mean that California would have to disenroll at least 250,000 children who are currently in the program immediately.

The overwhelmingly bipartisan compromise on his desk may not even be enough to cover the children in California who are currently eligible but not enrolled--a goal that President Bush said he supported when campaigining for re-election in his 2004 Convention speech. But the Congressional compromise--supported by our Republican Governor and many others--would at least allow us to keep the current children enrolled, and continue to make progress in getting uninsured covered.

The President needs to sign the bill.

Posted by: Anthony Wright | October 02, 2007 at 03:31 PM

Mr. Secretary:

A brief question/comment:

Should/Is cost of living be calcuated in the poverty level guidelines for SCHIP? For example, where I live in fairly-rural PA, $83,000 is a very good living; however, that kind of salary in say, New York City may translate into barely making it for a family of 4.

Respectfully submitted,
Denise Connor

Posted by: Denise Connor | October 03, 2007 at 10:50 PM

Mr Secretary,

Sorry if I offend, but this bill is lunacy. I have read that approximately 70% of Americans are in favor of this legislation, stands to reason, since it won't cost them anything. This bill will be paid by the 21% minority smokers in this country. So sure when the 70% of nonsmokers won't have to pay anything of course they are in favor of it. The problem is the math doesn't work after 5 years the funding gets cut to below current levels. What happens then? Let me guess, we raise the cigarette tax again? The problem is everytime we raise taxes on cigarettes more people are encouraged to stop so then revenue would continue to fall. This bill cannot pay for itself this way. The worst part is, on average, smokers make less money than nonsmokers so this bill would have the poor paying for insuarance coverage for the poor. How in anyone's mind can this make sense? Have congress change the funding for this bill to a gas tax and I guarantee the percentage of supporters for this bill will plummit. But then so will support for our elected congressmen so I'm sure none of them feel bold enough to place their heads on the chopping block. But hey on the bright side, if we raise the income thresholds to 83000 and allow adults to be covered then I can drop the coverage I'm currently paying for and enroll my family. Since I'll be one of the minority tax payers that would be paying for this I don't suppose there would be any reason for me to pay twice for insurance.

Posted by: Sean Bruce | October 07, 2007 at 02:14 PM

Your comments, Mr. Leavitt, about this insurance legislation for children and the lack of support by the President is short-sighted and just plain unethical. There are many, many children out there who in need of proper medical insurance. Additionally, there are many children who turn 18 and unless they go to college as full time students, they do not adequate insurance coverage. For the amount of money this government spends in Iraq, this insurance legislation is a trifle drop in the bucket. It deeply saddens me and terribly irritating to see you support a President who has been brought up with a silver spoon in his mouth. Do you you think he's ever had a problem with insurance. I wonder if President worry about insurance when he went in for his last surgery? The day YOU don't have insurance like so many people out there, might be the day you eyes will be open to other people's plight. I can only hope that soon there will be new leadership to lead us out of this misguided mess we're in with uncaring people like yourself at the helm.

Posted by: VAB | October 08, 2007 at 02:01 PM

I just want to thank you for your continued efforts to protect the rights of the medical professionals who object to abortions and other medical procedures they morally question. My oldest son is studying to become a doctor and he has been very concerned about how these laws would effect his ability to practice the medicine he has spent six years of his life preparing for. As a christian, he is morally against performing abortions and the use of the "morning after pill". If this law is repealed by President elect Obama, my son intends to change his focus of medicine, or to practice overseas. He refuses to compromise his belief for anyone.
Personally, I agree with my son, but even if I didn't, I don't think it is right to refuse anyone the right to have their own beliefs. After all, this country was founded on that principle, wasn't it?

Posted by: Christine McNeillie | November 20, 2008 at 04:37 PM