As I was doing some research on the proposal to expand the SCHIP (State Children's Health Insurance Program) by taxing cigarettes and cigars, I came across and interesting perspective from Marc Kilmer of the Buckeye Institute.
(For some background information on this issue, I recommend local blogger Smoke If You Got 'Em, who has a post on the issue as well as the response to a letter he sent to Sen. Sherrod Brown. Toledo Talk also has a thread on the issue.)
Kilmer starts with an challenging question:
"If a politician ever suggested that taxes should be raised on the poor in order to pay for a product that people in the middle or upper class could already afford, it is not likely that this politician would have much of a future in office. So why, then, are so many members of the U.S. House and Senate rushing to support an effort to raise cigarette taxes (which hit the poor much harder than the rich) to pay for expanding federal health insurance program to include many middle class families?"
The reason, he explains, that SCHIP needs more money isn't just because of increasing medical costs - it's because coverage is being expanded to children in families that should be able to afford medical coverage (in some states a family of four can make up to $83,000 and still qualify) - and to ADULTS. In my logic, this doesn't make sense, as such expansions seem to be directly opposite to the original intent of covering children in families who made too much to qualify for medicare, but not enough to purchase their own insurance.
Kilmer says, "In fact, according to a recent study by the non-partisan Tax Foundation, almost 60 percent of American children would be eligible for government health care under a proposal being pushed by some Senators. Can anyone say with a straight face that this is really about “poor kids”?"
He further explains that the idea for such taxes is because "smokers impose such a heavy burden on government health care programs" so it's logical that they should pay more for medical care. But he rightly points out that children aren't supposed to be smoking, so how do you justify the use of such fund for them?
Kilmer hits the nail on the head with this statement:
"Why tax smokers more to pay for this program, then? I think it has a lot to do with the fact that people like “free” government programs. They like the concept of government funding children’s health care, but they do not want to pay for it themselves. So they pick out a group of folks engaged in activities they do not like – such as smoking – and decide to tax them."
But before you go off on the Democrats who are supporting this, remember that there are plenty on the right side of the aisle who believe this expansion of government is a good idea. In fact, it was a Republican Congress that, in 1997, gave us (what was at the time) the largest expansion of government health care since 1965, when Medicaid and Medicare were created.
The new federally funded program? "State Children's Health Insurance Program" (SCHIP).
At the time of passage, Congress estimated SCHIP would cost taxpayers $48 billion over ten years. Ten years later, the current figure being bandied about is $5.04 billion per year, which is not that much more than what's been spent, on average, each year previously. But the kicker is that the re-authorization is only for five years and some estimate that the shortfall from the states during that time frame could be $7 billion - yes, billion with a 'b'...
Ironic - when the Democrats controlled Congress in 1993, the Clinton administration failed to pass a national plan for socialized medicine. But Republicans, in 1997, implemented the administration's backup plan. According to the Association of American Physicians and Surgeons (AAPS), a "kids first" strategy which could be implemented through Medicaid was the backup option in case the larger plan failed. Many rejected 'HillaryCare' as socialized medicine...but those same people willingly took the first step toward the end goal by passing SCHIP.
So why did the GOP do this? Some speculate that they caved to an effective Democrat strategy which went something like this: Let's propose a new government program for children and fund it with cigarette taxes. Then, if Republicans oppose "KidCare" we'll charge that they don't care about children and that the only reason they oppose it is because they get large sums of money from the tobacco industry. This was a brilliant political strategy and one that is duplicated in numerous issues today. How many times do you hear, in a campaign, that it's 'for the children'?
At the time of passage, there was concern that the program would encourage families and employers to drop private health insurance and take this new government subsidy.
Estimates from the Congressional Budget Office in 1997/1998 were that half of the participants in the new program would be families who gave up private insurance. And they had good reason for such expectations....In 1987, Medicaid was expanded to pregnant women and their children with incomes 250% of the poverty level. Between 1988 and 1995, the number of kids covered by private insurance fell 8 percentage points while the percentage of kids covered by Medicaid climbed 7.6 points. Some studies showed that at least 3/4 of the shift was the result of parents dropping private coverage for themselves and their children.
Another concern at the time was that SCHIP would eventually become mandatory, regardless of family income or need. With the current proposed expansion to higher income levels, it's not yet mandatory, but it looks like it will certainly become the 'insurance of choice' for those eligible, after all - if the government is going to pay for something, why should I?
In 1994, the Republicans won control of Congress by promising to reduce government. But they didn't. Recently, under the guise of 'compassionate conservatism,' Republicans continued to expand the scope and reach of the federal government. One would think they would have learned a good lesson from previous experiences - that it is almost impossible to roll back entitlement programs once they're created, especially health-care entitlements. Yet instead of learning that lesson, in 1997 Republicans helped create the largest health-care entitlement in 30 years. And then, in 2003, they exceeded their previous record by passing what became the largest expansion of health-care entitlements when they approved the Medicare Prescription Drug program.
If they support the proposed expansion of eligibility for SCHIP, they may get credit for paving the road to socialized medicine.
Fellow SOBers weigh in: Porkopolis has additional information on SCHIP and some good links, and One Oar in the Water shares thoughts about socialism and presidential candidate Ron Paul.