Don't step in the Schip

I was perusing Jot's blog and came across an old post that mentioned FactCheck.org, a non-partisan political site that examines the truthfulness of statements/positions made by parties/politicians.

A recent story on the State Children's Health Insurance Program (Schip) debate is interesting. My exposure to the issue comes primarily from conservative sources (Wall Street Journal, National Review). The Journal perspective from early August:

"Congress has left town for August, thank heavens, but not before passing bills that set up some important debates for the autumn. One of the biggest ought to be over the plans to expand the State Children's Health Insurance Program (Schip), which is a dress rehearsal for the health-care fight in 2008.

Schip was supposed to help children from low-income families, but Democrats are now using the program to expand government control of health care and undermine private insurance. To see this plan in action, look no further than the 465-page Schip revelation that Democrats muscled through the House last week.

Schip was created as a program that needs to be reauthorized every decade; the House plan makes it a permanent entitlement. Schip was supposed to help the uninsured; the House plan is consciously designed to "crowd out" private coverage and replace it with federal welfare. The bill goes so far as to offer increasing "bonus payments" to states as they enroll more people in their Schip programs. To grease the way, the bill re-labels "children" as anyone under 25, and "low income" as up to 400% above the poverty level, or $82,600 for a family of four.

As if this all weren't blunt enough, the House's Schip bill also includes a new tax on private insurance policies. Assessed at $375 million in its first year and increasing thereafter, this so-called "fair-share" tax will fund a new government agency to study the "comparative effectiveness" of certain medical treatments and kinds of insurance. Unremarked is that health insurance is already more expensive than it needs to be because of mandates like this one.

The factcheck.org story rebuts some these points. My initial interest in the topic was about how Schip expansion might function as the encroachment of a government health care system.

I lean towards the side of cradle to grave healthcare is not an absolute responsibility of the government, just as housing or food isn't. Yes, there are government programs to help there, but it's targeted assistance, like health care is now.

WSJ had another piece back in March about the "perverse incentives" in healthcare, ie the insurance structure in place isn't market driven:

When the doctor's time is rationed by waiting (rather than price), the primary care physician's practice is usually fully booked, unless the practice is new or located in a rural area. As a result, there is very little incentive to compete for patients the way other professionals compete for clients... Bottom line: When doctors and hospitals do not compete on the basis of price, they do not compete at all.

The article hints at another approach to costs, and I read recently (AZ Republic I think) about the inefficiency of complete healthcare. Think of other insurance you have (home, vehicle). It is not comprehensive for all costs. You pay for maintenance and upkeep, and the insurance only comes into play when some catastrophic happens.

So what if health insurance moved to that model? I realize deductibles play a role here, but those exist in home/car insurance also. The point is routine checkups (physicals, vision, dental, general office visits) are removed from any coverage, thereby reducing costs of insurance as well as forcing providers to suddenly have to compete on price, a competition that currently doesn't exist.