Monday, October 15, 2007

SCHIP Veto Override Vote on Thursday--The Ragged Line Between Those Who Need Assistance and Those Who Don't

The House is scheduled to vote on overriding President Bush's veto of the State Children's Health Insurance Program (SCHIP) expansion.

As I said last week, I believe the Democrats will come up about ten votes short in their attempt to override. I would be surprised, but not shocked, if they can find the two-thirds necessary to override the President.

One of the arguments opponents of the SCHIP expansion have made is that the income limits are too high--well above the 200% of poverty level the original plan was intended to cover. This is a reasonable concern.

A CBO study found that as many as two million of the six million additional kids the expansion is designed to pick up would come from "crowd-out"--the government plan picking up people that have or would have private insurance.

Ideally, a SCHIP plan, or any government-run health plan should cover only those who cannot afford insurance and wouldn't have it without the government program.

However, I will suggest it's not that simple. One family making 300% of the poverty level ($62,000 a year for a family of four) might have a family member working for a company that is generous in providing health insurance and paying for most of it. Another family at the same income level might have health insurance at work but the employer expects the family to pay all or most of the family cost, or the plan has very high co-payments for a sick child. Another family at 300% of poverty may have no employer provided health insurance--something that will cost them thousands of dollars to buy on their own.

The bottom line is that it just isn't possible to draw this neat and tidy line between those who can't afford health insurance and those who can.

The bipartisan SCHIP compromise the House will vote on this week draws the line in a place where maybe a third of the extra six million kids it would cover could get it in the private sector. But it also draws that line where another four million will get it who likely wouldn't have coverage without the program.

So, in a very untidy health insurance market, you cover two million you maybe don't have to to get four million you wouldn't get otherwise.

To put some reality on this ragged line between the really needy and the not so needy, Chris Lee at the Washington Post, had a great piece this weekend that is worth a look.
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