Many have never heard of the SCHIP program, however, in the stepwise progression towards a single payer National Health Care System, it was the opening salvo in the larger battle now underway. I submit this post as part 2 of the drive to Nationalize our health care delivery while simultaneously denying this goal.

Created by Ted Kennedy and Orrin Hatch in 1997, and passed by a Republican Congress, SCHIP was a modest program designed to extend health insurance coverage to children of American families living in poverty; the working poor. A reasonable and compassionate goal; one perhaps many, if not most, could support. However, it is now emblematic of the ruse being employed to capture an ever increasing portion of the US population into Government run and funded plans. This post will demonstrate why the State Children’s Health Insurance Program (SCHIP) has been perverted from it’s original purpose, to one with very different goals.

Several years ago the Democrat Congress passed the very same expansion language, only to have it vetoed by President Bush and his veto sustained. However, under the Pelosi congress with President Obama in the White House, the bill has now become law. Funded by a new $0.65 per pack tax on cigarettes, SCHIP now extends eligibility up to a minimum 300% of federal poverty limits, roughly $66,000 for a family of four (and above the Median US household income of $50,233). I say at a minimum, because individual states are free to set higher limits (400% in New York, ~$88,000 per family) and include the parents of these poor kids as well.

SCHIP funds are distributed as a block grant, with the Federal Government picking up 65% to 83% of the total costs. The CBO estimated it will add $35 billion to federal health care expenditures over the next 4 years, although the Wall Street Journal estimates the true costs to be closer to $74 billion. The higher figure accounts for expensing gimmicks built into the legislation, and that the plan assumes after the four year period ends, all new enrollees will be unceremoniously ejected from the system; something I would suggest is unlikely to happen.

“So what?” you say, covering the health care needs of kids is money well spent. Perhaps, but interestingly it is not just the income limits that are “flexible”, but the definition of who qualifies as well. As Michael Tanner at the CATO Institute notes, “already there are 11 states using SCHIP funds to provide taxpayer funded insurance to adults. In fact in Minnesota 48% of program participants are adults, not children, while in Illinois 45% of SCHIP recipients are adults.” According to the state’s own projections Illinois will soon spend more SCHIP money on adults than on children. Qualification for the program is simple, and elegantly designed to ignore immigration status in distributing our wealth.

Among the most disturbing traits of this program is the way it has morphed from one providing coverage for people otherwise lacking insurance, to one that REPLACES private coverage for the middle and upper middle classes. According to the Congressional Budget Office, 77% of newly eligible children are from families that already have/had private coverage, moving millions from private health insurance into a newly expanded government plan. The SCHIP expansion is not so much about providing insurance for those who lack it, as shifting coverage from those on private plans to one controlled by the Federal Government.

Like the promise of keeping our private insurance if we like it, while writing legislation which makes it almost impossible that will occur, the Pelosi Congress has altered SCHIP to represent another step down the road to a nationalized system for all. When one can simultaneously qualify for a low income health insurance plan, and be subject to the AMT for wealthy Americans, something is seriously wrong in Wonderland….