[September 4, 2007 @ 11:05 am] David Hogberg

Looking over this blog post at Health Affairs, I noticed quite a few curious comments about SCHIP and uninsured children. First, from Bob Greenstein at the Center for Budget and Policy Priorities:

“[S]ince 2004, as funding for SCHIP has grown scarcer among states and a restrictive Medicaid policy enacted in early 2006 took effect, the number of uninsured children under 18 has climbed — from 7.7 million in 2004 to 8.7 million in 2006.”

“The number of uninsured children fell when the federal government and states worked together to increase coverage for children under SCHIP and Medicaid,” noted Robert Greenstein, executive director of the Center on Budget and Policy Priorities. “Now, progress has stalled and begun to reverse. Moreover, the Administration has announced a new policy that further weakens children’s coverage under SCHIP by placing coverage of as many as several hundred thousand children at risk.”

How exactly did progress “stall” and begin to “reverse”? Have states been cutting back their SCHIP benefits? Not to my knowledge. If anything, a few states have made them even more generous. Thus, Greenstein’s remark seems little more than an attempt to hoodwink the public into believing the increase in uninsured children is somehow linked to declining SCHIP benefits.

But that’s not the only bit of deceit in his comment. Note how he chooses 2004 and 2006 as his data points. But SCHIP has been around since 1998, so picking 1999 from the Census numbers (sorry, 1998 isn’t available in that data set), would be more accurate. In 1999 the number of uninsured children was about 9 million. Although the numbers of uninsured children has bounced around a lot and in some years showing vast improvement, we now seem to be almost right back where we started.

Related to that is this comment from Families USA:

Today census numbers only confirm what state officials and health care advocates have seen first-hand — SCHIP resources must be increased to meet the health care needs of the increasing number of uninsured children. Congress is currently working to reauthorize the SCHIP program with enough funding to ensure that as many as 5 million uninsured kids in this country get the coverage they so desperately need.

Before we take as given that the proposed SCHIP expansion would cover another 5 million uninsured children, shouldn’t we first ask why the introduction of SCHIP has, at best, only made a small dent? And, why, despite the introduction of SCHIP, the overall number seems to be on the rise?

Here’s my answer: Many of the children in SCHIP were not previously uninsured. Rather, their parents had private coverage for them, coverage which they then dropped to put their kids on the government dole, a phenomenon known as “crowd out.” Now, children tend to be healthier than the population as a whole (and, of course, younger). So, when they leave private insurance, those remaining in private insurance tend to be older and sicker. That, naturally, drives the price of private insurance higher, which will make it less affordable. More people will then opt to go the uninsured route.

Now, before anyone suggests that I am arguing that the introduction of SCHIP has caused our present woes, let me clarify: I’m sure SCHIP is not the biggest cause of the rise in the uninsured, and I doubt it is even a major factor. But I suspect that it has had, on balance, a negative effect.

What good, then, will come from expanding it?

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