Warning Labels for Kidcare
by Naomi Lopez
September 2, 1997
Americans have reason to be wary when the new children's
health care program is praised by Senate Minority Leader
Tom Daschle, South Dakota Democrat, as "the single biggest
health achievement since we passed Medicaid in 1965."
The Balanced Budget Act of 1997, signed into law by the
president last month, establishes a new 10-year $48 billion
Child Health Assistance Program (CHAP) that provides federal
matching funds to states for covering uninsured children.
With only four short weeks until Oct. 1, the date when
states may begin drawing federal matching funds, states
soon will develop their children's health care programs.
There has never been a more important time for free-market
state legislators to practice what they preach. They must
insure against any further government encroachment on
our economic and health freedom and should make every
effort to preserve health care quality and choice.
How can states best cover uninsured children? The new
law allows the states to pursue a variety of options.
States may expand their current Medicaid program, establish
a separate state child health insurance program, offer
a combination of both, or provide health care services
directly, through hospitals, for example, or the public
schools. This latter option deserves special attention,
as the infrastructure for socializing medicine through
the public school system is already well entrenched across
the nation. According to the Robert Wood Johnson Foundation
affiliate Making the Grades March 1997 report, there are
more than 900 school-based health centers operating in
all but seven states around the country.
Irwin Redlener, president of the New York-based Children's
Health Fund revealed his vision for children's health
when he told the Bureau of National Affairs, "There are
elementary schools everywhere in this country; theoretically
we could blanket this country with school-based health
services and concentrate on the underserved areas." He
added that, "School health care used to function in a
vacuum. But now the functions have changed, they are providing
counseling, dealing with psychosocial problems, not just
bruises and headaches." While this vision may seem efficient,
the result will be disastrous. It would remove parents
from their children's health, limit physician choice and
compromise health care quality, at taxpayers' expense.
The implications of such a system reach well beyond
compromising both economic freedom and health quality.
This system also threatens individual health privacy,
parental rights, and educational choice. According to
Sue Blevins, president of the Institute for Health Freedom,
"Any state legislator who helps develop school-based health
care programs is clearly working toward the goal of socialism."
One has to wonder why the same public school systems that
fail to educate America's children should be permitted
to expand their mission to include medical and psychological
treatment of children's health needs.
Even if the school-based programs are not immediately
established in every area, there will be a steady and
constant pressure to move into the government-sponsored
program over time. According to the Congressional Budget
Office, as many as half of the program recipients could
be lured from private insurance into the government program.
As has happened with other government health programs
such as Medicare and Medicaid, this "temporary" program
that is generally available to children in families having
incomes up to 200 percent of the poverty level, will probably
not be scaled down or eliminated after the 10-year expiration.
If history is any lesson, the opposite will occur: The
program's eligibility guidelines will be expanded, additional
minimum required benefits will be added, and the program's
costs will skyrocket.
If school-based health programs are not the answer,
state legislators might be tempted to provide free health
care directly through hospitals or HMOs. But according
to Harvard health care economist Joseph Newhouse and the
Insurance Experiment Group, free health care is not synonymous
with good health. Their findings were based on a comprehensive,
national health insurance study conducted by the Rand
Corp. and U.S.Office of Economic Opportunity between 1974
and 1982. Researchers found that free health care had
almost no effect on the health of children. In fact, health
services were overutilized. The most important influences
on children's health, diet and hygiene, have nothing to
do with insurance. State lawmakers can, and should, avoid
the strong temptation to provide any additional direct,
free medical care.
Rather than pouring resources into efforts to reduce
the number of uninsured children through government-sponsored
programs, we should pursue free market approaches that
would remove barriers to affordable insurance and health
care. Such free-market approaches include removing state-mandated
insurance benefits and offerings, easing physician licensing
requirements, excluding Medical Savings Account contributions
from taxes, and providing vouchers for the purchase of
private insurance or health services.
It is no longer enough just to hold the line at every
opportunity; state lawmakers must immediately reverse
this dangerous course. Government health care proponents
who were defeated in the 1994 universal health insurance
fight may have lost that battle, but they ware winning
the war in attaining socialized medicine for the entire
nation on a state-by-state basis. Nothing short of a long-term
and fierce campaign based on free market principles and
choice will reverse this dangerous trend.
Naomi Lopez is a research associate at the Institute
for SocioEconomic Studies in White Plains, N.Y. The article
appeared in The Washington Times, September 2,
1997. Copied with permission.