As expected the President vetoed the SCHIP bill. As expected, the Democrats found some victims to parade in front of the public to promote their cause, in an effort to override the veto. Healthcare is a big issue, a really big issue. More so, it's an emotional issue. For purposes that have nothing to do with providing healthcare for poor children, Nancy Pelosi and Harry Reid are totally misrepresenting the issue.
For those who may not know, SCHIP is the state's children's health insurance program currently up for extension. There has been a parade of news stories out this week about families who have benefited from SCHIP. As the Wall Street Journal noted yesterday the President is not considering rolling it back. It's the EXPANSION of SCHIP that's up for debate, not its ultimate fate, so all the children that the Democrats have paraded across our TV screens will still be covered. The fear mongering is a ploy. It's this sort of politics that folks like me are getting annoyed with. In truth, the President supports a modest expansion of the program; he simply does not want to increase coverage for those up to 3 times the poverty level, approximately $89,000.00/year.
The WSJ accurately portrayed this conflict yesterday:
A continuing resolution fully funds the program through mid-November, so none of the 6.6 million recipients will lose coverage. Even if Washington can't agree by then, there will be another stopgap, because SCHIP might as well already be an entitlement. A majority of Congress backs a much larger expansion. The controversy is over the role of government in health care.
States regulate insurance policy. Maine's disastrous results make it obvious that the more regulation, the less competition and the higher the price. Government has created the problem it's trying to resolve. Certainly, there are better ideas in the universe of technology and innovation than the perpetual expansion of SCHIP. Most people I speak to, both conservative and liberal, believe that care should be provided to those who need it. I think solutions need to be more intelligent and temporary in nature than our traditional entitlement programs.
The question is does government do this better than the private sector? The answer is of course not. The Medicare trust fund will be insolvent by 2015. Along with Social Security these entitlements make up the largest portion of the budget. Just like Social Security if we fail to fix it, it is doomed to collapse. As enticing as it may seem why would we think about making this entitlement disaster larger by making health insurance an entitlement? This would be a huge burden to our children.
In Alan Greenspan's new book "turbulent age" he coins the phrase "creative destruction." It is economic speak that borrows from science. Science says "matter can not be created or destroyed... its simply changes form." So too is it with all things economic like healthcare. When you create something, something else is taken away. When the democrats fully socialize medicine something else will be destroyed - specifically health care innovation and quality. Profits, no matter how nasty some folks think they are, stimulate innovation, innovation to resolve and remedy some of the most complex illnesses. There will always be these anecdotal stories of grief, however, we shouldn't make impulsive policy as a result. Europe and Canada have their own horror stories.
The conventional wisdom seems to be, if you can't afford it the government can. We are engendering an entitlement society by continuing to legislate by exception. Democrats do this especially well as we saw this week. I say we consider the costs and the reasons for the growing costs and tap in to the creative and entrepreneurial spirit of America to fix our most complex problems.
Expanding SCHIP with the idea of eventually making it an entitlement is a bad idea economically. What we create in the short run we will destroy in the years to come.
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