For two years, SCHIP has been mired in an ideological standoff. Republicans described the Democrats’ proposed expansions—which were more moderate than those in the current bill—as “socialized medicine.” SCHIP supporters, like Nobel Prize‐winning economist Paul Krugman and columnist E.J. Dionne, claim the program works.
Researchers who actually study the program find that SCHIP does help uninsured children find coverage, but at great expense. They find no evidence that SCHIP actually improves health outcomes, or that the program addresses the systemic quality problems that confront even insured children.
SCHIP’s great expense stems from the fact that in many cases, it simply enrolls children who were already insured privately. Economists Jonathan Gruber and Kosali Simon estimate that out of every ten children added to the SCHIP rolls, six already had private coverage. Only in government is a program deemed to “work” when it covers four uninsured children for the price of ten.
The current proposal will only exacerbate this problem. Congressional Democrats want to expand SCHIP to children in families of four earning up to $80,000 per year. The Congressional Budget Office reports that 77 percent of such children already have private health insurance.
In terms of actually improving health outcomes, SCHIP looks even worse. Economist Robert Kaestner and his colleagues conclude, “The proposition that health insurance is the cure for adverse health outcomes among poor and near‐poor children has not been adequately demonstrated.” About SCHIP specifically, they write, “It is remarkable that there is so little empirical evidence to support so large an expenditure.”
Economists Helen Levy and David Meltzer write that there is “no evidence” that SCHIP and similar programs are a cost‐effective way of improving children’s health. They observe that targeted health programs, policies that increase incomes, or even improved educational opportunities could deliver greater health improvements per dollar spent.
It’s not even clear that SCHIP’s method for improving children’s health—expanding insurance coverage—is the right one. The New England Journal of Medicine reports large gaps between the quality of care children receive and what they should receive, even if the children have insurance. That study’s authors conclude, “Expansion of access to care through insurance coverage, which is the focus of national health care policy related to children, will not, by itself, eliminate the deficits in the quality of care.”