The State Children's Health Insurance Program (SCHIP) is a federal program that helps states insure indigent children who are not poor enough to qualify for Medicaid. As currently constituted, SCHIP has strong bipartisan support. In addition, the program has major impact on Washington state and is a big component of Gov. Gregoire's plan to provide health insurance to all children in the state.
SCHIP is, however, now at the center of controversy. Yesterday the U.S. House of Representatives passed a SCHIP reauthorization bill that would grow the program exponentially. Chief Deputy Republican Whip Rep. Eric Cantor, R-Va., a member of the House's minority GOP leadership, comments that the bill is:
....a fiscally reckless $211 billion government handout....[The] new plan extends this entitlement to those with family incomes of $82,500 and higher. And how do [members of Congress] plan to pay for it? Two ways – by stripping $200 billion over the next 10 years from the more flexible privately administered Medicare Advantage, and, of course, by raising your taxes.
The SCHIP re-authorization bill passed the House on a highly partisan basis with 220 Democrats in support and 194 Republicans against. Washington's congressional delegation voted predictably along party lines. Most interesting was Rep. Dave Reichert's, R-Auburn, decision to vote against the bill. There was much speculation that Reichert might jump the GOP ship and support the measure. Ultimately, he voted against the SCHIP expansion because it would negatively affect Medicare. According to Reichert:
It’s tough when you are forced to vote on something that makes you choose between children and seniors, when we should support both....and we had to vote up or down on a bill that reauthorized SCHIP but did so by cutting Medicare for needy seniors.
The SCHIP expansion will likely become law. Although President Bush will probably veto this bill, the big congressional majority that supports the legislation is likely enough to override a veto.
So what's next?
According to the Arizona Republic's Robert Robb:
[The new bill passed by the U.S. House] would provide coverage up to a family income of about $60,000 a year. Since the median family income in the United States is just over $46,000, this reaches well into the middle class.
Here, a confusion surfaces between the issues of universal access and federal subsidies. There are a lot of middle-class American families that have difficulty obtaining health-insurance coverage. Every state, however, can provide universal access by allowing buy-ins to its Medicaid program....
To pay for the SCHIP expansion, Democrats are proposing to raise tobacco taxes by up to 61 cents a pack.
Tobacco taxes are highly regressive. So, basically, Democrats are proposing to tax the poor to pay for the health care of the middle class.
Washington state already tried something like this a few years ago when voters passed Initiative 773, which boosted tobacco taxes by 73 percent to fund programs like the state's Basic Health Plan. According to the Washington Policy Center:
[Initiative 773 sought] to reduce tobacco use, while at the same time relying on smokers to help fund a major public health program. If the first policy succeeds, the public health funding will start to dry up.
Congress is placing SCHIP on an equally shaky fiscal foundation by relying on tobacco taxes. With the enormous and continuing decline in smoking, this is not a smart move.
