“Socialized” Health Care and SCHIP

I was going to do this post as another Rudy is babbling segment with Rudy’s latest being something about socialist health care:

Rudolph W. Giuliani on Tuesday called for transforming the way health care coverage is provided in the United States, advocating a voluntary move from the current employer-based system to one that would grant substantial tax benefits to people who buy their own insurance. In his speech here, he excoriated Democrats for advocating a “socialist” solution to solving the problem of the nation’s 44.8 million uninsured, saying the party’s candidates encouraged a “nanny government” by proposing a greater government role in health care … Mr. Giuliani cited horror stories and selective statistics about health care in foreign countries that provide universal coverage. Mr. Giuliani said that a “socialist” model would bankrupt the government. “That is where Hillary Clinton, Barack Obama and John Edwards are taking you,” he said. “You have got to see the trap. Otherwise we are in for a disaster. We are in for Canadian health care, French health care, British health care.” But Mr. Giuliani’s speech offered very little in the way of specifics. He said his goal was to outline his “vision,” with more details to come in the fall.

A bunch of rightwing buzzwords (e.g. socialist and nanny government) but no specifics on his proposal to fix our currently very inefficient health care system. But boy did he hit a home run with the crack about Canada, France, and the UK. Oh wait, Dean Baker is calling this strike three on Mr. Giuliani:

It would have been helpful to readers to point out that by a wide variety of outcome measures, including life expectancy and infant mortality rates, these countries’ health care systems do as well or better than the United States. Mr. Giuliani is either ignorant of the performance of these health care systems or trying to mislead his audience.

I call this strike three as we have seen the same kind of stupidity and/or mendacity from Mr. Giuliani on foreign policy and on fiscal policy. One has to wonder if his policy wonk is Jonah Goldberg. But speaking of National Review nitwits, let’s check out what Senator Coburn and Regina Herzlinger wrote for them with respect to the State Children’s Health Insurance Program (SCHIP):

The SCHIP battle is not about whether to insure poor children. The debate is about how to insure them: Via the government or private insurers? This debate has not only pitted Democrats against Republicans but has also sundered the Republican coalition. Some Democrats wanted SCHIP expanded by $50 billion dollars so that even families earning about $81,000 a year who have eligible children were included. (The 2005 U.S. median household income was $46,000.) A resolution with the Republicans who hold minority leadership roles led to a compromise, costing only $35 billion, which allowed coverage for those earning up to $60,000. A fundamental problem with this compromise is that the same amount of coverage for children within SCHIP costs $1,000 more per child than under private insurance … Senators Richard Burr (R., N.C.), Bob Corker (R., Tenn.) and others want to refigure the tax code so that we could buy health insurance with tax-sheltered money, a right currently reserved solely for our employers. If we purchased our own health insurance with tax-protected funds, we could keep these arrogant behemoths in check, just as we do in the other sectors of the American economy. The Swiss universal-coverage, consumer-driven system requires people, not employers or governments, to buy health insurance. (The poor primarily receive funds to purchase insurance just like everybody else.) This consumer control enables the Swiss to enjoy an excellent quality of care without the social inequality of single-payer countries at costs that are a third lower than ours. SCHIP is not merely a debate about yet another mystifying government program. It is all about free-market principles versus government mandates. Giving taxpayers the freedom to choose and buy their own health care would unleash powerful market forces that have been subdued by third-party bureaucracies for the last 60 years.

Fortunately for us, the Congressional Budget Office analyzed this issue a couple of months ago:

States have considerable flexibility in designing their eligibility requirements and policies for SCHIP. In 2006, 26 states set their eligibility thresholds at 200 percent of the federal poverty level, 15 states had thresholds above 200 percent of the poverty level, and 9 had thresholds below.2 (The federal poverty level for a family of three in 2007 is $17,170.) The lowest eligibility threshold in a state was 140 percent of the poverty level and the highest was 350 percent … Although SCHIP has significantly reduced the number of uninsured children in low-income families, the net effect on the extent of coverage is smaller than the number of children who have been enrolled in public coverage as a result of SCHIP because the increase in public coverage has been partially offset by a reduction in private coverage.

200 percent of the poverty level is less than $35,000 not this $81,000 figure used by Senator Coburn. And it appears that families have the choice as to whether to sign up for SCHIP coverage or not. Senator Coburn wants us to believe that the government is forcing insurance on people who would prefer to use their rent and food money to purchase private insurance. But that is not how I read how CBO is describing the program at all. Now you might think that the GOP proposal to spend $35 billion (per year) is a lot of assistance, but there is something omitted from what Senator Coburn wrote:

If annual funding for the program continued at $5 billion (the level incorporated in CBO’s baseline spending projections) and current eligibility rules and benefits were unchanged, by 2017, 43 states would have projected spending outstrip available funds by $8.9 billion. With that level of funding, enrollment would fall from 7.4 million in 2007 to 3.5 million in 2017, CBO estimates … CBO estimates, the net additional federal cost to maintain current programs under SCHIP would be $8 billion over the 2007–2012 period and $28 billion over the 2007–2017 period, relative to baseline spending levels. With those additional funds, enrollment (at any time during the year) would grow from the 8.1 million people in 2007 to 8.8 million in 2012 and 9.4 million in 2017

Simply put, Coburn is talking spending over the decade – not per annum spending. You know – making the time frame clear is easy to do as well as being critical if you wish to inform your reading. Then again – this was a National Review piece, which means it was designed to mislead people. Let’s be clear – the GOP proposal would either reduce real spending per person or make several working poor families with children not longer eligible for SCHIP assistance. If that is the intention of the GOP – could they at least be honest enough to say so?

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