Congress to kill SCHIP?

by: Jay Stevens

Fri Nov 06, 2009 at 10:03:10 AM MST

[John] notes that the health care reform bill emerging now in the U.S House terminates the Children's Health Insurance Program in four years.

It's true:

The $894 billion, 1,990-page health reform bill unveiled by House Democrats last Thursday would repeal CHIP at the end of 2013, shifting millions of kids instead into private plans contained on a proposed health insurance marketplace, dubbed the exchange.

Party leaders have been mostly tight-lipped about their motivations. But a series of factors seem to have driven their decision, according to sources on and off Capitol Hill, including hopes to get family members under the same plan, to centralize control of the state-run CHIP program, and to shift more folks into private coverage to win the support of both the insurance lobby and moderate Democrats.

What th--? How do you justify something like this?

Suzy Khimm:

It could strengthen one of the most fundamental parts of the Democratic reform package -- a robust insurance exchange with a pool of participants that's large enough to drive down costs precisely because insurance companies have an incentive to jump in and compete for customers. Moreover, folding CHIP into the exchange would add a younger, healthier pool of participants to the exchange, offsetting its potential of becoming a dumping ground for the sick and elderly. Finally, CHIP has always suffered from under enrollment -- about 6 million children aren't insured in the program who should be -- and by bringing whole families in under the same plan, more children will be covered.

Call me unimpressed with this line of reasoning. Essentially Khimm is arguing that we should offer up the children of the least wealthy Americans to the private insurance industry in hope that they'll lower prices for the rest of us.

Additionally, it's probable that most of these families whose children we'll be thrusting into the private market will need taxpayer subsidies to afford the more expensive private plans for their children, which seems to me to be a much less efficient use of tax dollars, given private insurers' much less efficient coverage. And what about the health of the children under CHIP? CHIP insurance plans actually pay claims to ensure that children get the medical care they need. There's no such guarantee under private plans.