SCHIP Renewal: Healthcare for Our Future Generations

With children’s healthcare at stake, the renewal of the State Children’s Health Insurance Program (SCHIP) on September 30, 2007 has become a sensitive and daunting task for today’s United States government. In less than fifteen days, both Congress and the President must come to a consensus on the future state of SCHIP for the next five years. Just yesterday, the House of Representatives made progress in negotiating a unified proposal with the U.S. Senate to expand the program by 35 billion dollars. However, not everyone is satisfied with Congress’ plans to increase spending on SCHIP. President Bush has threatened to veto any expansion of the program over 5 billion dollars. President Bush argues, with justified reasoning, that SCHIP is a state and federally funded program intended to help low-income children who do not qualify for Medicaid nor can afford private health insurance. He believes that the program should stick to its original intent before any greater expansion.

In accordance with his beliefs, Bush has added two new regulations to the renewal of SCHIP. First, states must demonstrate that Medicaid and SCHIP cover 95% of the children at or below 200% of the federal poverty level (FPL) before they can expand coverage to all other children. Secondly, children must be uninsured for at least one year before becoming eligible to participate in the program. Although the newly proposed regulations are intended to preserve the State Children’s Health Insurance Program for low-income children, a universal health care program would greatly reduce provider administrative costs and offer healthcare access to all children leading to an overall healthier and more productive environment for the future.

Approximately 8 million children were uninsured in the United States in 2004. As illustrated by the pie chart to the left, 67% of the 8 million uninsured children were eligible for Medicaid and SCHIP, but for some reason, were not participating in these programs. In the past two years, the number of uninsured children has risen to almost 9 million. With so many children eligible for government assisted health insurance programs, the cost of insuring the rest of the nation’s children does not seem so far-fetched or implausible. In fact, in the long run, providing universal health care coverage to children may reduce healthcare costs overall because the majority of provider’s administrative costs would be eliminated.

On the other hand, President Bush’s new regulations could very well cost society a lot more money in the long run because many states which would like to expand their state health insurance programs, like New York, are being restricted from doing so. States will need to reallocate more of their SCHIP funds towards administrative purposes to find and enroll children whose family income is at or below 200% of FPL rather than using their funds to provide healthcare to more children. By implementing a universal healthcare policy for children, the administrative costs discussed above will be eliminated and all children will have access to care.

Many Republicans also argue that by expanding SCHIP to cover all children, there will be a “crowd out” problem. This implies that with more children eligible for health insurance, the more families that will terminate their children’s current private insurance to use public assistance for health coverage because it is cheaper and often times more comprehensive than their current insurance plans. Evidence of the frequency of this phenomena in the past is uncertain, but estimates range from 10 to 50 percent of families eliminating their child’s private insurance for public assistance when available. Republicans support Bush’s regulations on SCHIP because it keeps the program from being over utilized and costing taxpayers more money.

However, these Republicans must take into consideration the hardship of purchasing health insurance for a single family. As shown in the figure on the right, health insurance premiums cost an average family with an income at 300% of the FPL, 19% of the families’ entire income. Due to the high costs of healthcare coverage, parents will avoid buying health insurance if they believe their children are healthy. This type of behavior generally leads to greater medical problems in the future for children and frequent trips to the hospital emergency rooms where nobody can be denied access to care under the Emergency Medical Treatment and Labor Act (EMTALA). This causes greater costs to society due to overcrowding in emergency rooms, which can be reduced by providing universal healthcare coverage for children and more preventative care.

Universal healthcare coverage for children will reduce administrative costs because no child will be denied access to health care. Children will be able to get the preventative care they need such as immunizations to reduce the risk of epidemics in the United States, and may miss less days of school due to illnesses. This will hopefully lead to healthier and more productive lives in the long run for our future generations. If no child should be left behind in education, why should they be left behind without access to healthcare?