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Ryan: Flawed Health Legislation Relies on Bait and Switch Tactic

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Location: Washington, DC


Ryan: Flawed Health Legislation Relies on Bait and Switch Tactic

Today, the House of Representatives passed legislation (H.R. 976) that exploits the renewal of a popular children's health insurance program to expand government-run health care and uses a spending gimmick to understate the true cost of this legislation over time. First District Congressman Paul Ryan voted against the flawed, fiscally irresponsible measure, citing the need for a more comprehensive solution to help the uninsured. The President has indicated he will veto the bill, and Congress is expected to take up a short-term extension of the expiring State Children's Health Insurance Program (SCHIP) as part of a larger bill later this week. Ryan supports an extension of the existing program.

The legislation the House considered today goes well beyond simply extending SCHIP, which was originally intended to serve low-income, uninsured children whose family incomes were a little too high to qualify for Medicaid assistance. Instead, it expands this government program by $35 billion over five years, financed by a 61-cent-a-pack increase in federal tobacco taxes. But after giving states an incentive to sign up as many children as possible (some of whom already have private health insurance) in SCHIP during the next five years, the bill relies on an abrupt drop in the funding level to evade pay-as-you-go constraints and downplay the long-term cost to taxpayers.

In order for the Majority's math to work, under today's bill the SCHIP program would spend more than $8.3 billion in 2012, drop to only $2.3 billion in 2013 and then cut $500 million from existing SCHIP funding levels in 2014. If this actually occurred, millions of new enrollees could be left without coverage or moved to Medicaid. More likely, a future Congress would be pressured to greatly increase SCHIP funding.

In addition, the Congressional Budget Office (CBO) estimates that, under the SCHIP expansion, about 2 million individuals who have private health insurance would shift into the government-run program. If funding drops off sharply after five years, as provided under this legislation, these families could find themselves without health coverage, and - after five years of market-distorting federal spending - they will be unlikely to find affordable private health insurance.

"Solving the problem of uninsured children and all who lack health coverage must be a top priority of Congress, but this bill goes in the wrong direction while hiding the true cost of expanding this government program. This is a case of bait-and-switch salesmanship - luring supporters with promises that downplay costs, then raising the price. More government-run, big-bureaucracy health care that pushes people out of private coverage isn't the answer to our health care crisis," Ryan said. "We need a more comprehensive fix that will put health coverage within everyone's reach, without bankrupting taxpayers down the road. Making the health care marketplace work to lower costs, boost competition, and improve quality - not expanding government's reach - should be the focus of our efforts."

On top of concerns about the way today's proposal to expand SCHIP misleads taxpayers by understating the long-term cost of expanding this program and drives some children from middle-income families that already have private coverage into a growing government-run health care system, there are other significant flaws with the bill, including the fact that it:

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Makes it easier for illegal immigrants to fraudulently qualify for the Medicaid and SCHIP programs. Current law requires that states must determine whether people who apply for Medicaid and SCHIP are U.S. citizens. States can satisfy this requirement by having applicants show specified types of identity documents such as drivers' licenses or birth certificates. The proposed SCHIP expansion bill weakens the current rules - allowing states to disregard the requirement to review actual identity documents and instead submit the names and Social Security numbers of applicants to the Social Security Administration (SSA). As the SSA Commissioner has indicated, this new provision would fail to identify and therefore prevent some people from illegally getting health care benefits through Medicaid or SCHIP. This includes illegal immigrants who are fraudulently using another person's valid name and Social Security number.

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Attempts to pay for an expanding government program with a shrinking revenue stream. The number of smokers in the U.S. has been declining for decades, and increasing the tobacco tax will cause tobacco consumption to decrease even more sharply. Logically, this raises the question of whether sufficient revenues from the cigarette tax hike will, in fact, materialize to cover the short-term cost of expanding this program.

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Was rushed through Congress after being hidden from public view until yesterday evening and includes at least one pork-barrel earmark (directing taxpayer funding to a health care facility located in Tennessee freshman representative Steve Cohen's district) - despite the bill being certified as "earmark-free".


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