Could SCHIP Plan Pillage Private Insurance?

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On Thursday, the House of Representatives is going to try to override the president's veto of a bill that would have expanded a popular children's health insurance program — SCHIP. The override is expected to fail. At a press conference Wednesday, President Bush once again explained his veto.

"I don't like plans that encourage people to move from private medicine to the public, and that's what's happening under this bill," he said.

But a new poll shows that the public supports an expansion of the program — even if it means some people would drop their private health insurance to get the government benefits.

Switch to SCHIP?

Jessica Baron is one of the people who would switch. She has a genetic condition that weakens her connective tissue and has left her with mild hip problems. Her 12-year-old son has the same condition, but his is worse. He has eye problems, weak ankles, knees and hands, and he needs a wheelchair. California has a plan that requires health insurers to offer something to people with pre-existing conditions, so they were able to get Blue Cross Blue Shield insurance policies for about $600 a month. But with co-pays for drugs and doctors, and a $1,500 deductible, their annual costs add up.

"We're looking at a minimum of $12,000," Baron says. "It's probably closer to $15,000 a year, if we include co-pays on medication, and anything we have to do that's preventative."

Baron and her son live in Southern California, where housing costs are high. Their rent and utilities run $24,000 a year. Barron is the executive director of a nonprofit group, Guitars in the Classroom, and makes $32,000 a year. Between rent and health insurance, "We've now overspent my pretax income and I haven't bought groceries yet," Baron says. "That's why my sofa is 11 years old and I'm driving around a falling-apart van with no automatic wheelchair lift."

Barron isn't complaining. She has savings that will last her another year or two. She's hopeful that her nonprofit will begin to do better, and she has the smarts to check out her options. One option was California's SCHIP Program, but she found that with the $8,000 she gets from her ex-husband to help with her son's care, she makes too much to qualify unless the program is expanded, which she hopes it will be.

Baron isn't alone. Analysts expect that some parents would switch their children from regular insurance to an expanded government program because it's available to children with pre-existing conditions, it covers almost everything, and it's cheaper.

Sarah Dufour would also like to make a switch. She and her husband live outside Buffalo, N.Y. They have insurance for their two sons, who are 3 and 6. Dufour doesn't know what her family pays out of pocket each year.

"It's too scary to find out," she says.

Her husband makes about $46,000 a year in an auto-body shop. He pays $89 a week for health insurance; his employer pays another $89. Not everything is covered and there are co-pays, like $250 for hospitalization, and $50 each time her accident-prone sons wind up in the emergency room.

"It does take quite a chunk out," Dufour says. "It's harder to save up for things like vacation. And Christmas time is always hard."

They haven't taken any vacations in the last few years. The family's income is $100 over the current maximum for the New York state plan.

Dufour, a lifelong Republican, supports an SCHIP expansion and says she would sign on if the program were expanded. She says this is one place the government should get involved because somebody needs to do something.

Public Support for SCHIP

SCHIP premiums are often free, or just $5 or $10 or $15 a month.

Economist Linda Blumberg of the Urban Institute says SCHIP makes financial sense for a lot of people.

"A private policy with comparable benefits is going to run in the neighborhood of $12,000 a year. And for a family of four with an income of $52,000 a year, that's almost a quarter of their income."

According to a new poll by NPR, the Kaiser Family Foundation and the Harvard School of Public Health, the public strongly supports an expansion of SCHIP even if it means some people would drop their private insurance.



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