October 29, 2007

SCHIP, Appeasing Dems, and Old School Hillary

Print More

This week, the House failed to get the amount of votes needed to overturn President Bush’s veto of the State Children’s Health Insurance Program expansion. The House, for the most part, voted along party lines. Part of a politician’s decisions is based on what the right thing is, and the other part is concerned with political maneuvering in order to get things accomplished. Lack of support for SCHIP expansion on behalf of the Republicans was probably the right thing to do, but it was a poor political decision.

If the SCHIP expansion bill passed, the government would have covered children in families that are up to 300 percent above the poverty level. This would cover children in middle-class families that may be inclined to take their children off of private insurance because they will now be eligible for SCHIP, as was the case in 2004. Due to the structure of SCHIP, it may also cause children who are eligible for Medicaid to be placed in SCHIP instead. Expansion of the program would have resulted in increased government spending to the tune of $35 billion, funded by an increase on cigarette taxes. When one considers the fact that national expenditures on healthcare are 16 percent of GDP (education is only 4 percent), it is logical for the government to limit spending.

Nonetheless, refusal to expand the program has made Republicans extremely vulnerable. Democrats and left-wing organizations now claim that the Republicans do not care about children and that Bush has no soul. If the “sticks and stones” phrase is true, then Republicans can weather this storm. However, if voters hear these criticisms often enough, Republicans may be voted out of office. The Republican position on healthcare is to keep it privatized, but not expanding SCHIP may have hurt these chances. If there were bipartisan support for increasing SCHIP funding, Republicans would have been throwing a bone to the Democrats. If the Democrats got their SCHIP expansion, they may have been more likely to listen to Republicans and come up with a bipartisan compromise on healthcare. But now, this type of compromise seems unlikely.

Finally, consider Hillary Clinton’s universal healthcare proposal. In fact, her plan for healthcare is quite moderate. If people want to stay on their private insurance plans, they can do so. But if people wish to get government healthcare, they can at a relatively affordable price. People can pick at her plan all they want and certainly there are flaws. However, what should concern people the most is that this proposal is significantly different from the one she created as First Lady. The healthcare reforms that she put together in the 90’s required all people to get coverage through state government plans and a national health board would regulate rates and benefits. First Lady Clinton’s plan depended heavily on government regulation and controls. Presidential candidate Clinton’s plan scales back government involvement quite substantially from her previous plan. The current proposal might simply be an attempt at appearing more moderate to appeal to voters. If she wins the presidency, Clinton may revert to elements of her old healthcare plan and we should be wary.

The debate over how to reform healthcare needs to come to a conclusion in the near future because the fact of the matter is that our healthcare system is broken in more ways than one. While the veto of SCHIP expansion was probably good policy, it was not a smart political decision. At this juncture, bipartisan support for reform is the only way that changes to our healthcare system can be achieved. A moderate proposal with slightly more government intervention will be needed, but the real problem at hand is not the uninsured but the rapidly rising drug costs. If politicians really want to change the system and challenge the drug companies, they will need to do so on the grounds of reducing medical costs.