Options Exist For Offsetting the Cost of Extending Health Coverage to More Low-Income Children
Publication Date: March 2007
Special Collection: John D. and Catherine T. MacArthur Foundation
Keywords: Health care costs; Health insurance; Income diversity; Economic inequality
There is growing consensus that SCHIP reauthorization should make substantial progress toward covering all uninsured low-income children. SCHIP reauthorization legislation thus will require significant increases in federal funding, so states have sufficient federal SCHIP funds both to maintain their existing SCHIP programs and to enroll as many as possible of the roughly six million low-income children who are eligible for Medicaid or SCHIP but are uninsured. The cost of such legislation will be substantial. The Congressional Budget Office estimates that the net federal cost of providing the federal funding needed just to sustain existing state SCHIP programs is $7.9 billion over five years. Based on CBO estimates of the cost per child of covering uninsured children as well as other factors, the additional federal cost of immediately enrolling the roughly six million eligible uninsured children easily exceeds $50 billion over five years.The issue is not that potential offsets are lacking, but that each potential offset is opposed by powerful special interests. Crafting an SCHIP reauthorization bill that substantially reduces the number of uninsured low-income children without swelling the deficit will require policymakers to make tough choices, and to stand up to special interests in order to serve the broader national interest. What follows is a representative list of potential offsets that would reduce entitlement expenditures or increase revenues and could be used to pay for SCHIP reauthorization.