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WSWS : News & Analysis : North America

Bush plans veto on child health bill

By Alex Lantier
21 July 2007

Use this version to print | Send this link by email | Email the author

US President George Bush has announced his intention to veto a bipartisan bill prepared by a Senate committee to increase funding for the S-CHIP (State’s Children Health Insurance Program) block grant program. S-CHIP funds are typically used to subsidize health insurance for children whose families earn more than the maximum set for participation in the Medicaid program, but who are nonetheless too poor to buy private insurance. White House officials’ defense of the decision relied on a deceitful paean to private insurance and free enterprise.

The S-CHIP program will expire in September 2007 unless the federal government grants it new funding. It helps cover 6.6 million children by providing approximately $5 billion per year to US state governments, which are free to spend it on health programs of their choice. Some states use the funds to supplement (and often reduce their own funding of) federally mandated Medicaid programs they administer; others have used it to set up new health coverage programs.

Despite S-CHIP and other federal programs such as Medicaid, 9 million children remain uninsured in the US. The Senate bill proposed an increase in funding of $35 billion over the next seven years and projected that this would allow coverage of 3.3 million more children. It proposed to pay for the bill by raising taxes on tobacco products, including a 69-cent increase in the tax on a pack of cigarettes.

The Senate bill would extend S-CHIP benefits to those earning 300 percent of the federal poverty level (about $63,000 for a family of four), arguing that even with this income level, the typical yearly premiums for a private family coverage plan ($11,480 according to USA Today) are prohibitively high. Medicaid benefits typically are unavailable to anyone earning above between 100 and 133 percent of the federal poverty level (just under $21,000 and $28,000, respectively).

Even though the bill promises from the outset to leave millions of children uninsured, questions remain about whether its limited goals will be met with the current funding levels. A House version called for $50 billion in extra funding over the next seven years, but the Senate trimmed this to $35 billion.

The White House insists that the program only needs $5 billion more than current funding levels over the next seven years, despite spiraling increases in medical costs. Senator Chuck Grassley of Iowa noted that the White House’s plans were “extremely unrealistic.”

Bush promised to veto the bill at a photo-op in Landover, Maryland, on July 18. In a complete travesty of the contents of the bill, which seeks to insure uninsured children, he claimed that it would encourage people “to drop their private insurance in order to be involved with a government insurance plan.”

Seeking to justify his opposition to children’s health care, he launched into a diatribe about his right-wing, free-market beliefs. He said, “I believe government cannot provide affordable health care. I believe [the S-CHIP plan] would cause—it would cause the quality of care to diminish. I believe there would be lines and rationing over time. If Congress continues to insist upon expanding health care through the S-CHIP program—which, by the way, would entail a huge tax increase for the American people—I’ll veto the bill.” The next day, at a photo-op in Nashville, Tennessee, he again denounced the S-CHIP plan as “the beginning salvo of the encroachment of the federal government on the healthcare system.”

One hardly knows where to begin with such a mass of lies and distortions.

In the first place, public services already play a huge role in health care, with more than 85 million people enrolled in federal Medicare and Medicaid programs. Since in the US, health insurance is tied to employment and jobs increasingly do not provide health benefits, there is simply nowhere else for most elderly or poverty-stricken workers to go.

The claim that public authorities cannot provide “affordable health care” is false, and widely known to be so. According to a 2003 article in the New England Journal of Medicine, private insurance keeps 11.7 cents per dollar it collects, versus 3.6 cents for Medicare and 6.8 cents for Medicaid. (The overhead on Canada’s universal coverage plan is 1.3 cents per dollar collected.)

The added expense of private insurance is largely due to the need to provide profits to shareholders and big salaries to CEOs and management, and also due to the profusion of administrative staff needed to adjudicate (and often deny) claims and oversee the different plans offered by each company. This also affects doctors and hospitals, who also hire large staffs to deal with the hundreds of insurance companies and thousands of plans their patients have. Roughly 30 percent of healthcare workers in the US today are administrative staff that perform such functions.

Finally, it is the height of hypocrisy for Bush to oppose spending $5 billion a year on child health because of its impact on budget and tax policy. That sum represents 0.18 percent of the federal budget of $2.8 trillion, and 2 percent of the current estimated yearly cost of the Iraq war ($250 billion), which has been funded by deficit spending over $400 billion yearly. Additional military expenses to the tune of more than $100 billion per year are routinely kept off the government’s books.

The claim advanced by Bush and, to a lesser extent, by some supporters of the bill—that it would somehow represent, if passed, a substantial new federal intervention into health care financing—is fundamentally bogus. US yearly healthcare spending is more than $2 trillion, or 16 percent of US GDP, and has been increasing at approximately 10 percent yearly since the 1970s. Spending $5 or $10 billion dollars is, quite literally, a drop in the bucket.

In fact, S-CHIP has always functioned as a partial band-aid on massive public health problems. S-CHIP started in 1997 as a 10-year program, agreed to by then-President Bill Clinton and Republican Speaker of the House Newt Gingrich, to partially remedy the lack of healthcare coverage after the Democrats failed to pass a national health care plan in 1994, despite their control of the presidency and both houses of Congress. Its “block grant” character was part of an entire wave of social cuts, agreed to by Clinton, whereby federal social programs were dismantled and replaced by cash payments to state governments, which were forced to oversee the programs. The most prominent program thus destroyed was Aid to Families with Dependent Children (AFDC), in the “Clinton welfare reform.”

Numerous recipients of federal aid were not informed that they continued to have benefits available at the state level, and many of those entitled to Medicaid coverage do not exercise it.

Even if the bill were to pass, it would still leave at least 5.6 million children totally uninsured. Raw numbers of uninsured children, moreover, typically underestimate the lack of health care availability. According to a Columbia University study, more than 23 million US children lack regular health care—9 million due to complete lack of insurance, 11.5 million because their insurance coverage is sporadic, and 3 million because they cannot get rides or access to a doctor’s office. This represents more than one quarter of all US children.

This lack of care coincides with a drastic worsening of children’s health, and particularly an upsurge in chronic disease linked to unhealthy food and environmental conditions. More than 18 percent of children are obese (up from 5 percent in 1970), asthma affects 9 percent of children (double the figure in 1980), and one third of US children are expected to contract diabetes in the course of their lifetime. Serious illness rates are also up, according to a study by Dr. James Perrin of Massachusetts General Hospital, with more than 7 percent of children “hampered in their activities” by an illness lasting at least 3 months, as opposed to 1.8 percent in 1960.

See Also:
Former surgeon general describes Bush administration's interference on science and health issues
[17 July 2007]
Hundreds of thousands hit by anti-immigrant measure
US: Medicaid recipients denied benefits under proof of citizenship law
[21 March 2007]