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If you can’t fix a problem, make it bigger

Marketplace Staff Aug 1, 2007

If you can’t fix a problem, make it bigger

Marketplace Staff Aug 1, 2007


Kai Ryssdal: Congress only has another couple of working days before Capitol Hill shuts down for its August recess on Friday. Which of course means bills are flying out of there fast and furious.

One of the big ones is a proposed $75 billion expansion of the State Children’s Health Insurance Program, also known as SCHIP. It has a fair amount of bipartisan support, although the president’s threatening a veto. He says SCHIP is too expensive and extends government health coverage too far up into the middle class.

Commentator David Frum says there’s something else wrong with it, too.

David Frum: Years ago, Donald Rumsfeld summarized his observations of Washington life as “Rumsfeld’s Rules.” Among them: “If you can’t solve a problem, make it bigger.”

Now, Democrats are following in Rumsfeld’s footsteps. They can’t fix Medicaid, so they’re going to make it bigger.

After Clinton’s health-care proposals collapsed in 1994, advocates of a federal national health insurance program decided to move more cautiously. Instead of erecting a single-payer system all at once, they would advance step by step.

Thus was born SCHIP, the State Children’s Health Insurance Program. States got extra federal money to provide Medicaid coverage for lower-income children under 18. If anything, SCHIP is even more generous than Medicaid, covering people with incomes twice the poverty line and paying higher benefits than Medicaid itself.

But from the start, there’s something strange and covert about SCHIP. SCHIP targeted the most politically sympathetic population, not the neediest. Rather than extending insurance to the uninsured, it shifted insurance from the private to the public sector.

Medicaid already covered one-third of under-18s. SCHIP boosted that share to one-half. Yet of the additional kids covered by SCHIP , three-quarters already had private insurance. Now, Democrats in Congress are proposing to expand the program vastly, again to a population already majority insured.

SCHIP was not created to solve a health problem. SCHIP was created to solve a political problem: how to sell universal government health insurance to a skeptical country.

Advocates of national health insurance know what they want, and they have carefully considered how to get it. Those of us on the other side — on the side of private markets — have to meet and match them.

If we continue to defend and excuse an increasingly unsatisfactory status quo, we’re going to find that with SCHIPs — as with potato chips — people won’t be satisfied with just one.

Ryssdal: David Frum is a resident scholar at the American Enterprise Institute.

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