Bush Administration Has Changed Course on Health Reform

During the 2004 campaign, President Bush vowed to lead an “aggressive effort to enroll millions of poor children who are eligible but not signed up for government health insurance programs.”  But when the congressional committees began preparing bills to do just that, the Administration changed course.  Now it’s making a number of dubious claims about congressional efforts to strengthen the State Children’s Health Insurance Program (SCHIP).

For example, the Administration says expanding SCHIP would advance a “Washington-run, government-owned” health plan designed to pave the way for a single-payer system.  That would come as a surprise to the American Medical Association and the trade associations for the private insurance companies and the drug companies.  These groups, hardly supporters of “government run” health care, support using SCHIP to cover more uninsured low-income children.

The fact is that most SCHIP (and Medicaid) beneficiaries receive coverage through private managed care plans that contract with states, not through government doctors.

The Administration also portrays the bipartisan bill that the Senate Finance Committee approved last week by a 17-4 vote as a vast expansion of SCHIP eligibility.  This isn’t accurate either, as a recent CBO analysis shows.  Of the 4 million otherwise-uninsured children who would receive coverage under the bill by 2012, 3.5 million – 85 percent – qualify for SCHIP or Medicaid under states’ existing eligibility rules.

Similarly, White House National Economic Council director Al Hubbard claims in today’s Wall Street Journal that the Senate bill raises the SCHIP income limit to 400 percent of the poverty line.  The bill does no such thing.  To the contrary, it constrains states’ ability to raise the SCHIP income limits by reducing the federal matching contribution to states that go above 300 percent of the poverty line.

Finally, the Administration warns that large numbers of the people who would gain public health coverage under the bill already have coverage through private insurers.  In fact, the CBO figures show that the Senate bill is well targeted on low-income children who are uninsured.

Jonathan Gruber, the M.I.T. health economist whose study on the effects of SCHIP on private insurance is touted by the Administration, has found that expanding programs like SCHIP is a much more efficient way to cover the uninsured than the type of tax breaks the Administration favors. For example, Gruber found that 77 percent of the benefits of the health tax breaks the Administration proposed last year would go to people who already have insurance.

In addition, CBO director Peter Orszag told the Senate last week that the Senate bill’s approach to insuring more children is “pretty much as efficient as you can possibly get.”

Policymakers can and will differ on health care issues, and vigorous debate is welcome.  But if this nation is going to address the twin problems of escalating health costs and the growing ranks of the uninsured (adults as well as children), policymakers need to begin by rejecting distortions that make it harder to conduct reasoned, well-informed debate.