Hillary's Bloated "Schip" Of State

Schip? Never heard of it!

It's the rich residue of Hillary's failed universal health care initiative, the State Children's Health Insurance Program. It started modestly enough, with $40 billion over 10 years, which would be matched by states in order to extend health care benefits to the children of those living in poverty.

That was in 1997. Today, it's a massive "underfunded" program the Dems are pushing forward as their health care Trojan horse for the upcoming elections. As the WSJ led off its editorial today:

Any doubt that "universal" health care has returned as a dominant political issue vanished with last month's forum for Democratic Presidential candidates in Nevada. "We need a movement," Hillary Clinton declared. "We need people to make this the No. 1 voting issue in the '08 election."

No. 1? That's the new way to insult our troops. First we say they've lost the war, then we make universal health care more important than their mission.

The Schip battle is shaping up like this: It's due up for renewal in September, and Bush, foolishly, wants to expand it by $4.8 billion to make it a $30 billion program over five years. Instead, he should force the law to be rewritten, as I'll explain in a minute.

The Dems want it to be hiked by $40 or $50 billion to take care of the "underfunding" that's occurring, which they estimate to be $900 million and rising. Oh my gosh! How did we so grossly underestimate the health care needs of children in poverty? The Dems would have you believe it's because there are more children in poverty (not so!), but WSJ tells the truth:

But this "crisis" arose because some states have grossly exceeded Schip's mandate. They are using the program to expand government-subsidized coverage well beyond poor kids -- to children from wealthier families and even to adults. And they're doing so even as some 8.3 million poor children continue to go uninsured.

The Schip legislation defines potential recipients as children in families making twice the federal poverty line, or $41,300 a year for a family of four. But states are encouraged to apply for waivers to allow for more flexibility. Now 15 states have eligibility thresholds above 200% of poverty, and nine of those are at or over 300%. In New Jersey, the figure is 350%. New York recently passed a budget raising eligibility to the highest in the nation at 400% -- or $82,600 for a family of four. That's an income close to what Democrats usually define as "rich" when they're trying to raise taxes.

Some states are using Schip to create universal child health programs, regardless of need. Governor Rod Blagojevich recently expanded the Illinois Schip program to insure all children, with premiums and co-pays based on parental income. Pennsylvania's "Cover All Kids" and Tennessee's "Cover Kids" programs do the same.

As of February 2007, the Government Accountability Office found that 14 states were using Schip to cover adults: pregnant women, parents of Medicaid or Schip kids -- and even childless adults. Arizona, Michigan, Minnesota and Wisconsin cover more adults than children. In 2005 Minnesota spent 92% of its grant insuring adults, and Arizona spent two-thirds the same way.

Why is this happening? Because there's no reason in the law for the states not to expand Schip to other populations -- and the proposed Dem modifications would make it even worse, because it proposes that if a state doesn't spend all its Schip funds, it will get less the next year. It's incentivizing waste.

So as the Dems ramp up their arguments for universal health care, remember this: We already have it. Naescent, for sure, but growing in reach and cost, expanding the entitlement mentality and fidelity to the Dems as it spreads. That's why Bush's position should be no new funding until the law is tightened up to forbid its use for any population other than children living in poverty.

But that's not Bush's position, tragically. I'll leave the conclusion to the editorial writers at WSJ:

In other words, what began as a hard-cap grant to cover the working poor is evolving into an open-ended entitlement to cover whatever promises states make. And all under the political cover of helping "children." Instead of debating government-run health care on its merits, Democrats are building it step by step on the sly. Or as Mrs. Clinton put it in Nevada, "Make no mistake. This will be a series of steps."

There's a lesson here for Republicans, who agreed to create Schip in a trade for Mr. Clinton's signature on their "balanced budget." Balanced budgets vanish in the blink of an election, while entitlements like Schip live on and expand as an ever-larger claim on taxpayers. Mark this down as another case in which Bill Clinton outfoxed Newt Gingrich. The least Republicans can do now is work to return Schip to its original, more modest purposes.