A CHIP off the Old Block: Another Plan to Grow Big Government

Statement

A CHIP off the Old Block: Another Plan to Grow Big Government

Every American should have access to affordable health insurance, and the State Children's Health Insurance Program (SCHIP) has been successful in providing coverage to children from low-income families.

As is too often the case in Washington these days, there is much disagreement over how to extend SCHIP, which is up for reauthorization this year.

Established in 1997 by the then Republican majority in Congress, SCHIP provides states with federal matching funds to cover uninsured children from families with income that is above Medicaid eligibility levels but who still cannot afford health insurance. All 50 states and the District of Columbia have SCHIP programs in operation.

Make no mistake, SCHIP is a good program that should be extended. Any low-income child or pregnant woman currently eligible for SCHIP should continue to be eligible.

Extending SCHIP as it was originally designed - for low-income, uninsured children and pregnant women whose family income is approximately $40,000 - would cost $4.9 billion over the next five years. The good news is this program can be extended - in its current form - without raising taxes or cutting Medicare programs.

The new Democratic majority, however, has called for an expansion of SCHIP - going far beyond the original scope of the program. The majority wants to expand SCHIP to provide coverage for children of families making up to $81,000 while allowing even more adults to participate.

This proposal would cost $50 billion over the next five years, and it would be funded by cutting health care benefits for seniors and by raising taxes.

Successful private health care programs, including Medicare Advantage, would be cut, threatening to turn what is now a highly successful program for uninsured children into a massive expansion of the federal government.

Medicare Advantage is an innovative program providing flexible health coverage for over eight million seniors - roughly 20 percent of all Medicare beneficiaries.

Tobacco taxes would also be raised - 45 cents to 84 cents per pack. The Senate bill proposes a tax of 53 percent of the manufacturer's price on large cigars, up from 21 percent, and capped at $10, up from the current tax cap of about 5 cents. Cigars costing $18.87 or more would have a $10 tax.

The Democratic majority's plan to use SCHIP reauthorization for the opportunity to expand government-run health care is bad medicine for hard-working Americans.

Unfortunately, the House passed this massive expansion of SCHIP, H.R. 3162, by a vote of 225-204. The Senate also passed its own version of the bill last week, and the two bills will now be conferenced; President Bush has threatened a veto. While I support reauthorization of SCHIP within its current parameters, I feel strongly that we must focus on reducing the growth of current entitlements - not enact new ones.

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