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The fallacy of SCHIP: It's not 'insurance'

| Monday, Feb. 4, 2013, 9:00 p.m.

Like previous expansions of Pennsylvania's State Children's Health Insurance Program (SCHIP), Gov. Tom Corbett's 2013-14 budget plan to add $8.5 million to extend coverage to more kids is a well-intentioned paving of the road to taxpayer hell.

Available to uninsured children and teens ineligible for Medicaid, SCHIP has covered more than 1 million young people since its 1993 inception and covers more than 188,000 today. Gov. Corbett wants to enroll another 9,300 with his latest proposal.

But as Commonwealth Foundation scholar Nathan Benefield concludes, Corbett is “striking at the branches, not the root of the problem.”

The governor's proposed expansion would not rein in costs, boost efficiency or make coverage more affordable. As SCHIP covers more children, more private insurers will be crowded out of the market, more employers will pare back benefits, more “free” services will be used and more taxpayer dollars will be spent.

The state's 2006 “Cover All Kids” SCHIP expansion prompted Mr. Benefield to then write: “Despite its name, (S)CHIP is not an insurance program — medical bills are not paid by insurance premiums, but by taxpayers. (S)CHIP is a welfare program, and ... costs will grow exponentially as dependants are added.”

Corbett might see further SCHIP expansion as popular and politically beneficial. Yet it's anything but beneficial for soaring health-care costs and the taxpayers who foot SCHIP's bills.

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