Kids Just Pawns in Governor’s Big Government Scheme

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Anyone looking for proof that supporters of government‐​run health care are trying to push all Americans into government health programs need look no further than Illinois, where Gov. Blagojevich has proposed expanding government coverage to 253,000 middle‐​class children.

Most Americans sympathize with the idea of providing health care to children who cannot afford it. Federal and state governments already cover such children through Medicaid, the State Children’s Health Insurance Program, and many state‐​only programs.

In fact, there are many indications that these programs cover many who can afford private coverage. In 2003, there were 36 million people living below the poverty line — but 52 million enrolled in Medicaid. Supporters of government‐​run health care have made no secret of their desire to expand Medicaid and similar programs to cover all Americans.

For example, Blagojevich proposes a new state program where taxpayers would provide coverage to all uninsured children, regardless of income. The monthly premium for a single child would range from $40 to $70.

Who could oppose health care for kids? But whether government should be the one to provide it is a separate question. There are many reasons why the answer here is no.

First, 75 percent of the children Blagojevich would cover come from families earning between $40,000 and $80,000 a year. These are families who could obtain private coverage on their own. For instance, a Blue Cross Blue Shield policy with a $250 deductible costs about $64 per child per month in Illinois. A high‐​deductible PPO plan from UniCare (with $30 copays for doctor visits) costs only $42 per child per month in Chicago. Why should Illinois taxpayers subsidize coverage for middle‐​class families when private plans offer coverage at comparable prices?

Second, if there’s one area where supporters and opponents of Medicaid agree, it is that such programs provide lower quality care than private coverage. Thus the Blagojevich plan would encourage parents to enroll children in a health plan that looks better on paper, but that may do less to protect their health. In fact, Blagojevich could make health care for the poor even worse, because his plan would force the poor to fight for scarce taxpayer dollars against middle‐​class families who have more political clout.

Third, the Blagojevich plan would have ripple effects that would make private coverage even less affordable than it is today. A study by the National Bureau of Economic Research reports that Medicaid increases prescription drug prices for private payers by 13 percent — a figure that grows as Medicaid grows. Moreover, when government coverage is more widely available, employers are less likely to offer private coverage, and employees are less likely to accept it. That causes private insurance pools to shrink, which can make private insurance more costly.

Blagojevich has been on a mission to expand government health programs as much as possible. In 2004, the Kaiser Family Foundation ranked Illinois No. 1 in overall SCHIP enrollment growth. The state’s SCHIP rolls swelled 33.2 percent that year, vs. a national average of 0.6 percent. If Blagojevich were truly concerned about uninsured children in Illinois (never mind taxpayers), he would first examine whether his expansions of government coverage have been part of the solution or part of the problem.

He would also ask why middle‐​class parents forgo private insurance for their children. Part of the reason might be the 37 health insurance mandates on the books in Illinois. Those laws raise premiums for everyone by requiring consumers to purchase coverage they may not want, including coverage for alcoholism, drug abuse treatment, contraceptives, infertility services (including in‐​vitro fertilization), chiropractors, osteopaths … the list goes on. If Blagojevich really wanted to make coverage more widely available, he would urge legislators to deregulate health insurance by eliminating those counterproductive laws.

Blagojevich has done none of these things, which provides more evidence that he does not want to expand coverage so much as government coverage.

As voters scrutinize his proposal, the governor no doubt will lecture them to “think of the children.” Yes, we should think of the children. And for the sake of those poor children already covered by government programs, those who would move into Blagojevich’s program, and those whose private coverage would be threatened by the Blagojevich plan, voters should reject this unnecessary and ideologically motivated proposal.

Michael F. Cannon

Michael F. Cannon, director of health policy studies at the Cato Institute, is author of Healthy Competition: What's Holding Back Health Care and How to Free It.