Does the Effort to Provide Government Health Care For All Kids Leave Too Many Behind?
Face the State Staff Report
The desire to leave no child without health care has become a popular battle cry across Colorado and the nation this summer. But critics have claimed that new initiatives are a failed, "big government" approach.
Protecting poor children from illness is an easy sell. Reporters love the feel-good aspect of the story, and politicians bask in the glow of standing strong on behalf of the weak. But the nuts and bolts of this complex health and fiscal issue – one that could increase federal spending by up to $50 billion – are filled with potential pitfalls. Chief among them is whether health insurance should be handled through the market place or by a boated governmental bureaucracy.
At issue is the State Children's Health Insurance program, commonly known as SCHIP. Colorado’s version--Children’s Health Plan Plus--is known as CHP+. The efforts together constitute a ten-year-old insurance subsidy plan, under which the federal government matches $2 for every state dollar. In total, Colorado taxpayers fund about $76 million a year to administer and and provide health care through the program. According to Colorado's stated goals, the state's objectives are to offer affordable health care for children and pregnant women. CHP+ is open to families that earn up to 200 percent of the U.S. poverty level and includes pregnant women. Single people making about $20,000 and a family of four making up to about $41,000 a year qualify for the program.
The current controversy revolves around efforts to boost the federal program by as much as tenfold. President Bush wants to authorize $5 billion for SCHIP in the next five years. The Government Accountability Office said the system could be covered for $14 billion on over five years. Some members of Congress want a $50 billion program.
Free-market advocates liken the State Children’s Health Insurance Program to Medicaid, with all of its problems. For example, John C .Goodman, president of the National Center for Policy Analysis, a nonprofit, nonpartisan public policy research organization, recently argued in the Wall Street Journal that that increased government involvement forces people to opt into the bloated federal system, which leads to poor service, fewer options and inefficiency. Goodman argues that this pattern will put a greater burden on the federal government and make it harder for private insurance companies to do business. Currently, there are rumblings that the government could expand SCHIP to levels that could include members of the middle class, including those families earning up to $62,000 a year. This would force private insurance companies out of business, resulting in government-only programs.
Local resident Brian Schwartz, an active participant in Colorado's health care debate, echoes these concerns. He contends that SCHIP -- like Medicaid -- will underpay physicians for their work and crowd out insurance companies from the market. Worse yet, an expanded federal program could turn SCHIP into another version of Medicaid, according to Linda Gorman, director of health care policy at Independence Institute, a free market think tank in Colorado. She contends that many physicians won’t treat Medicaid patients, because the government system reimburses doctors well below standard commercial rates. The same could happen with an expanded version of SCHIP.
But not everyone agrees with Schwartz and Gorman. The SCHIP system is a dream come true in Grand Junction, according to Steve ErkenBrack, Vice President for legal affairs with Rocky Mountain Health Plan. He said the Colorado version of the program pays his system's physicians a proper rate.
“CHP+ does a good job of setting the rates where they ought to be,” ErkenBrack said. “For the physicians under our program, the rates are structured in a different way than Medicaid. We don’t have a problem with underpaid physicians. The way it works here is pretty good.”
Nonetheless, Gorman continues to believe that SCHIP pays rates that are too low, resulting in worse care. “If SCHIP reimburses at Medicaid rates, its expansion means that more costs are loaded onto private payers, more people drop out, and provider financial stress increases," she said to Face the State in an email. "It has been documented that hospitals decrease service intensity to match reimbursement levels, this means that the quality of care can decrease for everyone."
Meanwhile, free market advocates like Schwartz have another fear -- that Congress may push through a massive government-run insurance monopoly that will will result in waste and abuse.
“SCHIP follows the same model as Medicaid,” Schwartz said. “Those in this program have no incentive to shop around for other insurance options, because they are spending other people’s money." In Schwartz' view, insured patients have no incentive to get good deals or keep medical costs down. He also argues that in some cases, individuals with children will forgo finding better jobs offering private insurance because they of the lure of the cheap or free health care benefits provided by the program. “Evidence shows that people avoid getting higher paying jobs to continue to qualify for Medicaid,” he said.
But nonetheless, ErkenBrack sees some savings. “ A good number of the uninsured are kids, and this would be a viable tool to get them into preventive care, rather than waiting for them to get so sick that they have to access care at the Emergency Room," he said. This is among the most expensive ways to access health care, and -- since the family is in the working poor -- much of the costs are often shifted to the rest of us.”
The SCHIP system is also favored by the state’s largest health care provider, Centura Health. “Our mission is to extend the healing ministry of Christ by caring for those who are ill and by nurturing the health of the people in our communities," Centura’s CEO Gregory Burfitt wrote in an email to Face the State. “Given our mission, it should come as no surprise that we are strong supporters of expanding SCHIP to ensure that uninsured children in our communities receive the access to health care that our children so desperately need. ...Expanding SCHIP is an opportunity to make a profound difference.” According to Burfitt, Colorado currently has 167,000 uninsured children.
But even supporters of an expanded SCHIP program don't always agree on basic numbers. According to U.S. Rep. Diana DeGette, D-Denver “If we don’t expand the SCHIP program, we’ll still have 6 million kids nationwide and 50,000 in Colorado who don’t have health insurance." DeGette also told the Rocky Mountain News that an absence of SCHIP-supported health care would be “immoral.”