SCHIP Expansion: Robin Hood In Reverse

Misguided Legislation Would Cause More Problems Than It Would Solve

DALLAS (Sept. 25, 2007) – As both chambers of Congress prepare to vote on the expanding the State Children’s Health Insurance Program (SCHIP), the National Center for Policy Analysis notes this expansion will be costly for children, seniors and the poor.

“Congress wants to tax the poor to pay for a benefit for the middle-class,” says NCPA President John Goodman. “Congress should instead focus on getting more people access to private insurance.”

The House-Senate conference report would expand eligibility to children in families with incomes up to 300 percent of the federal poverty level, or $62,000 for a family of four. The bill would increase spending by $35 billion over five years, funding in large part to a $0.61 increase in the tobacco tax.

Yet SCHIP expansion would do little to increase enrollment among children who are already eligible, and most of the additional children are already covered by private insurance. According to the Congressional Budget Office (CBO), of the children who are uninsured for an entire year:

  • More than one million children currently qualify for public coverage but are not enrolled.
  • Another 1.1 million do not qualify because they are illegal (or temporary) immigrants.
  • About 403,000 are income-eligible immigrants who have not been legal residents long enough to qualify for Medicaid benefits.
  • In families earning 200 percent to 300 percent of the poverty-level income, 77 percent of children already have private coverage, according to the CBO.
  • In families earning 300 percent of poverty, 90 percent of children are already covered by private health insurance.
  • Recent research suggests an average of 60 percent of the kids will have dropped private coverage to enroll in S-CHIP.

An increase in the tobacco tax disproportionately impacts the poor. In addition, there are other, non-monetary costs that have to be taken into account. For example, Children will have less access to health care because most SCHIP enrollees experience restrictions to care not felt by children enrolled in private insurance plans.

For more on the issues involved in the S-CHIP debate, see