Vetoing Children’s Health

Editorial
The New York Times
July 22, 2007

President Bush is threatening to veto any substantial increase in spending for a highly successful children’s health program on the bizarre theory that expanding it would be the “beginning salvo” in establishing a government-run health care system. His shortsighted ideological opposition would leave millions of children without health insurance at a time when medical costs are soaring.

The president’s ire was provoked by a bipartisan bill approved by the Senate Finance Committee last week that would expand the so-called State Children’s Health Insurance Program, a joint federal-state effort that, over the last decade, has substantially reduced the number of uninsured children in the country. The program, known as S-chip, seeks to cover children whose family income is too high to qualify for Medicaid but too low to afford costly private coverage. It is due to expire on Sept. 30 unless Congress reauthorizes it.

The program now gets $5 billion a year in federal money to match state contributions, and the Bush administration has proposed a meager increase of $5 billion spread over the next five years. With health care costs escalating, that would not even be enough to cover all of the 6.6 million children who were enrolled at some time during the last year. Hundreds of thousands of children would likely fall off the rolls. And there would be no help for some eight to nine million children who now have no health coverage at all.

The Finance Committee rightly rejected that false economy. By a hefty 17-to-4 margin, it voted to authorize a $35 billion increase for S-chip spread over five years. Instead of reducing the number of children enrolled, the Senate bill would provide coverage for an additional 3.2 million children who are uninsured now. And in another boon for American health, the costs would be paid for by a steep increase in taxes on cigarettes and other tobacco products — a further disincentive for smokers.

Mr. Bush’s objections are primarily philosophical: that the bill would move more people into a government-run program while he would prefer to entice them into buying private insurance with the help of tax deductions, his favored approach for all uninsured Americans. Tax deductions will not make much of a dent in the ranks of the uninsured. And it seems wrongheaded to impose collateral damage on a successful children’s health insurance program while waging that broader ideological battle.

The administration argues that S-chip should be mainly for children in families with incomes no higher than twice the poverty level, or $41,300 for a family of four. But that hardly suffices in states where medical costs are high and private policies can cost the average family $10,000 to $12,000 a year. At least 18 states now cover children in families with higher incomes, and some also cover pregnant women, parents and some childless adults.

Now the administration wants to reduce matching money for these added categories and push more of the burden onto financially strapped states. It worries that any more generous coverage would lead many families or small employers to drop private policies. That is bound to happen, but it would seem a plus if those families could get better or cheaper coverage through S-chip.

The Senate would still leave millions of children uninsured and would discourage any additional states from covering low-income parents — reducing the likelihood that they would enroll their children. Senate Democrats believe this is the best that could be achieved. Now it will be up to the full Senate to approve the bill by a veto-proof margin. Meanwhile, House Democrats have their sights on a bigger increase — some $50 billion over five years to cover even more uninsured children.

If more revenue sources are needed, the House should consider a new tax on alcohol, which would also have health benefits, or a reduction in the large subsidies paid to private health plans to participate in Medicare. The important thing is to cover as many uninsured children as politically feasible, and hang the ideological warfare.