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SCHIPS, US Healthcare and Health Insurance… two very different things and a lesson for Ireland. October 25, 2007

Posted by WorldbyStorm in Health, The Left, US Politics.


In view of what I was writing about last week the current debate in the US about the SCHIP (State Children’s Health Insurance Program) brings to light a fascinating distinction between health care in Ireland and the US. Or, does it? Perhaps one might argue that the distinction has moved to near-meaninglessness. Now the US debate is one which I’ve only recently tuned in on, and I’m sure that some, or many, of the nuances evade me, but bear with me because this is a learning experience and one which I think has ramifications for the left more broadly. Anyhow, if I pick something up incorrectly no doubt someone will put me right…

Let’s start at the beginning. Slate had an excellent article by Timothy Noah on the program which gives an outline as to what SCHIP is about…

SCHIP, which is funded jointly by the federal government and the states, was created in 1997 as a sort of consolation prize after Congress defeated the Clinton administration’s proposed restructuring of the health-care industry. Its purpose was to provide health insurance to low-income children whose families earned too much to qualify them for Medicaid. States were given broad discretion to set eligibility rules, with the result that in New Jersey, which had the most generous rules, a family of four could participate in S-CHIP even if its income were as high as $72,275. (In explaining his veto, Bush misstated that ceiling as $83,000. He also failed to point out that two months ago his administration effectively lowered the ceiling to about $52,000 for a family of four.)

Remember, Medicaid is remarkably limited. Certainly much much more so than the Irish situation.

These aren’t small things, and progressives should weigh them up carefully when dealing with them, because they provide both an opportunity and danger for forwarding the progressive agenda. Why so? Because as Noah argues:

In vetoing reauthorization of the State Children’s Health Insurance Program, George W. Bush has fired the first shot in the battle over health-care reform. The likely result will be to help mobilize support for further government intervention in the health-care market, which would be a very good thing. Thank you, Mr. President!

It’s difficult to pry benefits away from the middle and lower middle classes in contemporary societies. Sure, taking them from those who don’t or can’t vote is a different matter. That becomes a sign of an almost macho political prowess – remember how the parties of center and right (and even the left of center engaged in such rhetoric) vied in the past to do so? Note also how child benefit is one of the great untouchables in this state. Reform might suggest that there is a nonsense in the state giving benefits to all. But two different dynamics come into play. Firstly there is the sense of entitlement by those from all social groups, secondly a natural fear on the left that means testing will result ultimately in the removal of benefits from some sections. I tend towards the second view, as one might imagine. The point is that just as the original and neo-Thatcherite right sought to enmesh people within private commercial networks (literally so in the case of telecoms) so it makes sense for the left to enmesh people within public networks. Not because of hegemonic considerations but because public networks provide in many (but not all) instances the most equitable solution.

But back to SCHIP. What exactly is the problem? Mr. Noah, if you will:

SCHIP has been generous to middle-class families, but its chief benefit has gone to poor families. According to the Congressional Budget Office, SCHIP brought the percentage of children who lack health insurance in families earning up to twice the poverty level (set this year at $17,170 for a family of three; below that, you’re usually eligible for Medicaid) from 26 percent down to 17 percent.

What distresses President Bush about the SCHIP program is that, even before the Democratic Congress voted in its reauthorization to extend eligibility to families with higher incomes, SCHIP was already displacing private plans for somewhere between one-quarter and one-half of all enrollees. That’s because SCHIP was less expensive and provided broader coverage than private plans. Is this a scandal? Only if you think that private health-care plans today are priced reasonably and offer adequate coverage.
Now let’s hold on a moment, because this is important. Bush has said he is vetoing SCHIP because he ‘believes in private medicine. But as Noah reports:

if the SCHIP bill set doctors down the road to serfdom it’s doubtful the American Medical Association would support its passage. What Bush really means is “I believe in private health insurance,”…. Even market fundamentalists are leery of the private health insurance industry these days… I don’t mean to suggest that Milton Friedman groupies now think that substituting government would be an improvement. But when Bush says “I don’t want the federal government making decisions for doctors and customers,” he neglects to point out that currently, private insurers are making decisions for doctors and customers, to the serious detriment of both.

The distinction is incredibly important. Of course Bush doesn’t want socialised medicine, but his real ire is confined to the idea of non-private health insurance, i.e. state health insurance which is of course what SCHIPs is by stealth. And while the AMA is part of an important industry, well, the insurers are part of a more important one.

The new improved SCHIP that Bush rails against is funded by… well, believe it or not a tax on tobacco. Now that’s a sort of hypothecation. Never my favourite route to funding. But, nonetheless, in a polity where the very term public funding is anathema sometimes we have to take what we can get. Noah is rightly cynical about the situation calling it a ‘dumb gimmick’ but he makes a very pertinent point when he suggests that ‘The principle that poor children “deserve” subsidized medical care while poor adults do not is based more on sentimentality and political expediency than on logic or genuine compassion’. Indeed.

He goes further by suggesting that the current outrage over the administration response to SCHIPs (and a veto by Bush) is one that could help lead towards greater support for universal health care. Consider the political context. Hilary Clinton has decided to present Healthcare Redux. This time, presumably, without the pain. The conservative message is somewhat less clear cut than before with significant Republicans actually in favour of a serious extension of healthcare. So the issue becomes less cut and dried than Bush might seek to present it. No bad thing that.

In a way it is interesting to see how in a profoundly less congenial socio-political environment for the left than Europe progress has to be made incrementally, but note too that progress is being made.

Why should this be? On an interesting edition of KCRW’s To The Point the issue was thrashed out amongst various parties including a representative for the libertarian Cato Institute and various journalists.

Perhaps predictably the response from the Cato Institute representative was one which was antagonistic. He characterised this as:

‘…essentially a welfare program… with all the negative effects that go with welfare… expanding into the middle class’. Part of the critique was that there was a ‘crowd-out’ effect whereby people who were covered by private insurance either through employer or their own efforts found it more advantageous to go onto a taxpayer funded program. His solution? Return it to state oversight, with no federal restriction. The key point being as he said was ‘if states want to fund people earning $80,000 a year they should be free to do so’. Methinks I sense a slogan ahead for any such process. Of course in state hands all such programs would be much more likely to be subject to attack. But note the dynamic, it’s the insurance issue which is crucial here (ironically note also that under the Cato Institute would effectively up the effective bureaucracy since it would result in a multiplicity of variants). He also suggested that Republicans tended to shy away from issues of health care – and frankly who could blame them?

A journalist from the Christian Science Monitor argued that this was part of an effort by which the Democrats sought to woo middle classes and demonstrate the utility of a Democratic majority. The Senate recently voted the largest increase for spending on college education. The House was working on a ‘bail-out for people affected by sub-prime mortgages’. The idea being to help the middle classes, not just the poorest and SCHIPs being a part of that in the extension of benefits to the middle classes.

It’s not madly progressive on one level. But on another it is important. Because short of revolutionary changes it is essential for society that progressive developments are implemented. I’m always leery of the best blocking the better. And what is the Republican alternative? Tax breaks for individuals – Giuliani has proposed a $7,500 tax deduction for individuals to purchase insurance. But all that seems to do, to my mind, is to feed the already voracious appetite of private health insurers.

In some respects that argument has been largely won on this side of the Atlantic. See how difficult it has been to remove certain benefits, particularly those the middle classes receive. But not entirely.

In our own beleagured polities insurance remains and element of a wedge which is apparently used to drive us in the opposite direction. In a way it is illusory, a means to introduce a layer between customer/patient and health product/service and a means to promote rather specious notions of ‘choice’. And tragically we saw last week what the rhetoric of ‘choice’ delivers in respect of healthcare.

But – to move very slightly away from that terrain – I think the reality of providing contemporary health services has to some degree halted that rightward drift more or less in its tracks. As an ideological battleground it is simply too complex, and too embedded in the public consciousness, to provide the sort of neat little narratives that some would dearly wish for. Brian Cowen’s surly but accurate naming of Health as ‘Angola’ because it resembled a quagmire tells us much of what we need to know about its lack of potential as a vote getter. Mary Harney has displayed some personal courage in remaining within it, but then one might argue if she didn’t what remaining credibility would the Progressive Democrat vehicle have? Presumably a case of going from slim to none.

And while simply throwing money at healthcare is insufficient – and prevention should be the watchword – the illogicality of co-location as a serious means of increasing bed numbers has assumed something of a narrative within the public discourse.

As it happens I’m not antagonistic to private health services in certain instances. In my own experience I can think of certain technologies which arguably should remain outside the public sphere due to their experimental and/or other nature. Nor, as I’ve indicated before, am I entirely upset at the idea of universal health insurance – although I’d prefer a situation where it was funded from taxation. As one of the comments on the previous post on this subject noted before the weekend, insurance top-ups could exist but would acquire nothing more than – perhaps – privacy, or broadband, or whatever. But the core principle has to be that every person receives the necessary care that they require, not that one is given superior care than another. It’s pretty simple really.

[Incidentally, coming tomorrow, an addendum to the Left Archive that will be of interest to those reading Garibaldy’s contribution this week]


1. Eagle - October 25, 2007

To be honest, I’m not that up-to-speed with the SCHIP debate. However, I firmly believe that middle class people should not get this benefit and there’s no reason why a family with an income of $70 (plus) can’t afford health insurance.

Anyway, it was this comment that caught my eye.

But note the dynamic, it’s the insurance issue which is crucial here (ironically note also that under the Cato Institute would effectively up the effective bureaucracy since it would result in a multiplicity of variants). He also suggested that Republicans tended to shy away from issues of health care – and frankly who could blame them?

Multiplicity of variants? Not sure what that means, but if it means that you end up with 50 bureaucracies rather than one, then so what? Better fifty different experiments in how to handle this issue (or most issues, to my mind) than one Washington-based black hole.

What we have in Europe now is 27 “variants”, no? Should there be one health system for all of Europe funded by EU taxes and run by a massive mini-city in Brussels? I don’t think so.

I don’t think so. I believe there’s more efficiency in many small governments than in a single massive one.


2. Health and Fitness For All » Model Fitness: Flipping over Kim Strother’s gymnastics - October 25, 2007

[…] SCHIPS, US Healthcare and <b>Health</b> Insurance two very different <b>…&lt… […]


3. WorldbyStorm - October 25, 2007

Isn’t that very wasteful Eagle? Although I take your point about the EU. But, then again, there are distinctions between federalism in the US and state sovereignty in the EU. Incidentally, would it necessitate a mini-city. Seems to me there could easily be a devolved model which might actually come closer (although perhaps not quite close enough) to what you suggest.


4. Eagle - October 26, 2007

Isn’t that very wasteful Eagle?

Possibly, if you believe that the federal government is continuously seeking greater efficiencies and innovative solutions. However, I don’t believe that.

With fifty different bureaucracies you have some semblance of competition. And, although getting change through a big state bureaucracy is challenging, at least you can see when your bureaucracy is under-performing – in terms of costs primarily – when compared with other states. You have some leverage when you (as an elected representative) try to innovate or at the very least force through changes through the dead weight of the civil service.

Additionally, the bigger the government department, the easier it is to (a) hide massive waste and (b) continue with work practices that have long since been out-dated.

I actually believe that there is no efficiency gained by centralizing to one MASSIVE bureaucracy in Washington when there are 50 pretty big (and, if size equals efficiency) efficient bureaucracies already. I think the efficiencies gained from centralizing are minuscule (law of diminishing returns) when compared with the opportunities for waste and redundancy and inflexibility among staff.

By the way, Federal Dept. of Health in the US employs something like 50,000 people, mostly in the Washington area. That’s despite the fact that there are fifty state governments with their own health departments.

So I guess if we had one health service for all of Europe it wouldn’t be a mini city at all.


5. WorldbyStorm - October 26, 2007

I genuinely see your point, and believe it or not share much of it particularly as regards experimentation with different approaches, but perhaps that’s an argument to move away – at least in part – from monoliths towards more localised and effective healtcare structures. And that in itself is to shift away from what we’re looking at here, isn’t it?


6. Eagle - October 27, 2007


Yes, localized healthcare structures. Localized funding, localized decision-making, localized operational control.

And, this is where my decentralizing instincts override my conservative ones, if we had such a structure I would be much less opposed to a government led (or even run) health system.

My opposition to S-CHIPS (& the rest of the public health care infrastructure) is more due to my opposition to BIG government than any government.


7. Garibaldy - October 27, 2007

Localised funding. So then the rich areas have good hospitals, and the poor areas poor ones.

Decentralisation (and the privitisation of support services) has been tried with the NHS trusts. The result is huge sums wasted on bureaucracy, and worse service, MRSA etc.


8. WorldbyStorm - October 27, 2007

Hmmm… I know where you’re coming from Garibaldy, but funding of course depends on many different factors. But I’m with Eagle if it is a case of control as distinct from funding. Decentralisation is a good thing… and clearly more democratic.


9. Garibaldy - October 27, 2007

I wonder if decentralisation is automatically more efficient. Or necessarily more democratic in something like a health service. What we’ve seen in the NHS trusts is loads of petty bureaucrats building empires, and hiding disasters, and being able to do so due to the lack of oversight from the centre.

Clearly health services need to be more responsive to needs at a local level. BUT the fetishisation of choice contains dangers. We are now looking at a position in the UK where people will supposedly be able to choose which hospitals to go to. Which will lead to a concentration of funding in some places and the neglect of others. Personally, I’d rather see and efficient and well-run hospital that got me better and where I didn’t have a choice, than an illusion of choice and a postcode lottery.


10. WorldbyStorm - October 27, 2007

I’m not so concerned with choice as such. I agree, it becomes a fetish. But, localised control or accountability is important. One of the huge issues of the contemporary period is the sense of detachment or distance between people and entities. That’s bad because it leads to a loss of a sense of ownership. But of course outcomes have to be the same.


11. Garibaldy - October 27, 2007

Agree on the democratic deficit needing addressed. But healthcare is something that is supposed to be equal for everybody, and there is a large element of danger in localism for healthcare.


12. WorldbyStorm - October 28, 2007

Which I’d agree with. Hence the need for equitable outcomes.


13. SCHIPS, US Healthcare and Health Insurance… two very different things and a lesson for Ireland. - October 29, 2007

[…] WorldbyStorm Blogged about a good topic today on cedarlounge.wordpress.comRead this summary…. […]


14. insurancecool - January 22, 2008

The main thing that all had an opportunity it to receive.
The choice should not be focused on the certain layers of a society.


15. wintervssummer - November 29, 2008

I very much love summer 🙂
Someone very much loves winter 😦
I Wish to know whom more 🙂
For what you love winter?
For what you love summer? Let’s argue 🙂


16. sophia - January 18, 2009

If you were in charge of the budget, would you provide for your family first before helping others?
We are in a crisis financially in this country. Our debt is huge. Our citizens are hurting. So what does the House of Reps do? They pass SCHIPS with a tag-a-long = include children of illegals and/or illegal children of legals.(yes, there are those).
We should get our own house in order before throwing money at the problems of other countries.
Tell the senate to stop this nonsense.


17. A sign of our times… « The Cedar Lounge Revolution - April 7, 2011

[…] health system has significant public funded elements, Medicare and Medicaid and SCHIPS [dealt with here some time back] are the main […]


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