Truth about Bush's SCHIP veto

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Truth about Bush's SCHIP veto doesn't match harsh rhetoric
By Grace-Marie Turner
October 14, 2007


Is President Bush a liar who hates children? That's what many of his critics now are asking. Why else, they say, would he refuse to sign a bill providing health insurance to poor kids?
Specifically, the president has vetoed a bill expanding the State Children's Health Insurance Program (SCHIP), which was designed to provide health coverage to lower-income children. One nationally syndicated columnist went so far as to call Mr. Bush's rationale in vetoing the bill a "pack of flat-out lies."

This kind of rhetoric is wrong and misleads people about the facts of this important issue.
There is no debate over whether to reauthorize SCHIP so it can continue to provide insurance to needy children. The debate is about whether children in middle-income families should be added.

The president is absolutely right in insisting that SCHIP focus on its core mission of needy children. When SCHIP was created in 1997, the target population was children whose parents earned too much for them to qualify for Medicaid but not enough to afford private insurance. The president wants the program to focus on children whose families earn less than 200 percent of the federal poverty level. In today's dollars, that's $41,300 a year.

About two-thirds of the nation's uninsured children already are eligible for either Medicaid or SCHIP but aren't enrolled. Raising the income threshold won't solve this core problem. Congress should require states to focus on the 689,000 children who the Urban Institute says are uninsured and would be eligible for SCHIP if eligibility were limited to the $41,300 income level.

The other big problem is that many states are using SCHIP dollars to insure adults. Fourteen states cover adults through SCHIP, and at least six of them are spending more of their SCHIP dollars on adults than on children.

With this in mind, the Bush administration issued a ruling in August requiring states to demonstrate that they had enrolled 95 percent of eligible needy children before expanding the program.

Yet the bill that Congress passed, and which the president vetoed, nullifies that ruling and effectively refuses to agree that needy kids should get first preference. Instead, the congressional measure would give $60 billion to the states over five years to enroll millions more "children" - although many of them would be adults. Others would be from higher-income families.

New York, for instance, could submit a plan that would add children in families earning up to $83,000 a year to SCHIP. New Jersey could continue to cover kids whose parents make up to $72,000. All the other states would be allowed to cover kids in families with incomes up to $61,000.

Most children in these higher-income families, unsurprisingly, are already covered by private insurance. According to the Congressional Budget Office, 77 percent of children in families earning more than twice the poverty line have private health insurance now.

No one doubts that SCHIP is a vitally important program for needy children, and that our nation needs to do a better job of helping working families afford health insurance. But giving the states incentives to add middle-income kids to their SCHIP rolls would prompt families to replace private insurance with taxpayer-provided coverage.

The goal of SCHIP should be to provide private coverage to uninsured children. If Congress would send the president a bill that does that, he says he would sign it in a minute.

Grace-Marie Turner is the founder and president of the Galen Institute, a free-market-oriented health policy research organization. Her e-mail is gracemarie@galen.org.
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