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Something for nothing?

Healthcare fixes that don’t add up

By Congresswoman Virginia Foxx

Something is very wrong with our healthcare system—and Congress thinks it has the answers. If that doesn’t make you cringe, please read on. Congress thinks, and wants you to believe, that you can get something for nothing. Regular folks know that’s not reality.

Lately the debate in Congress has centered on a government-run healthcare program called State Children’s Health Insurance Program (SCHIP). Until now, this program has focused on covering the uninsured children of poor families who earned too much to qualify for Medicaid. When SCHIP began in 1997 its authors budgeted $40 billion over 10 years while stipulating that enrolled children should come from families earning no more than twice the federal poverty level ($41,300 for a family of four).

How times have changed. Today congressional advocates of expanding the program want to increase its size by $50 billion over five years—essentially quadrupling its cost. That may sound like a good idea at first blush. But under the microscope, the proposals to drastically expand the program are rife with loopholes. I support continuing SCHIP and healthcare for low-income kids, but a massive expansion should make us think twice.

First of all, the massive expansion would redefine who qualifies for SCHIP coverage, removing income restrictions and making it available to families who make 400 percent or more of the poverty level. This means children from a family of four that earns $82,600 could get government subsidized healthcare. What was once a healthcare program for poor children is mutating into a government healthcare free for all.

One of the core goals of SCHIP is to reduce the number of uninsured children in the country. It’s a noble goal. But this goal underscores a second major flaw in the proposed expansion.

Economists who studied government-funded healthcare found that offering it to non-poor families who have access to private health insurance—as many families earning $82,600 do—resulted in many families dropping their private insurance. Not surprisingly, programs like SCHIP do not achieve as large a drop in uninsured children as was intended. Instead many families are simply switching from private insurance to government healthcare. In fact, a study by economists David Cutler and Jonathan Gruber found that half of children signing up for this type of program had private health insurance. Signing up previously insured kids does nothing to lower the rate of uninsured children and is not good stewardship of your tax dollars.

Perhaps the most egregious shortcoming of the new SCHIP proposal is that requirements for participants to demonstrate legal residency have been removed. Removing these important requirements opens the door to rampant abuse of government sponsored healthcare by illegal immigrants. This much is clear: Americans should not be paying for the healthcare of people who flaunt our nation’s laws.

Finally, someone’s got to pay for this juggernaut of new spending. It starts with slapping new taxes on tobacco. I’m no apologist for smoking, but I do know a failed policy when I see one. In an era when smoking rates are in steady decline and tobacco taxes typically fall on lower income taxpayers, it makes little sense to pay for a program to help low-income kids on the backs of a dwindling supply of low-income smokers.

The numbers tell the whole story. According to the Heritage Foundation, we will need 22.4 million new smokers by 2017 in order to fund the SCHIP expansion with a new tobacco tax. Uncle Sam needs 22.4 million new smokers in order to fund healthcare. What twisted logic.

The SCHIP expansionists also will cut a popular and effective Medicare program called Medicare Advantage in order to fully fund their colossal plan. A study from an independent researcher and former Clinton Administration official estimates that these Medicare cuts would result in 3.2 million seniors, including 30,000 from North Carolina’s 5th District, losing their Medicare Advantage coverage. The study also found that Medicare Advantage plans would be eliminated in 22 states and the District of Columbia.

Despite these provisions to increase tobacco taxes, and to cut back on Medicare Advantage, a report from the non-partisan Congressional Budget Office found that the proposed SCHIP expansion would still increase the budget deficit by $76.9 billion over 10 years.

No doubt this is a tough issue. SCHIP has helped lower the number of uninsured children. But recklessly expanding it at the cost of reduced Medicare benefits so that well-off families can get taxpayer-funding insurance is not the solution. The government exists to do what people can’t do for themselves, not to create an illusion that we can all get something for nothing. That sort of logic never works out.

A compromise exists. Keep what works in place and get rid of loopholes that funnel money from low-income taxpayers and seniors to those who already have insurance.

Virginia Foxx is a United States Representative from North Carolina’s Fifth Congressional District. You may contact her office toll free at 1-866-677-8968 or e-mail her from her website, www.foxx.house.gov.

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