Media Advisory
Harriette Johnson
Media Relations Manager
[email protected]
phone 312/377-4000

Expert Comments: Starting Over on
SCHIP Reauthorization

(Chicago, Illinois - October 19, 2007) Yesterday's unsuccessful attempt by Congress to override President George W. Bush's veto of the proposed $35 billion SCHIP expansion marked a critical moment in preventing the federalization of health care. Now, all parties return to the reauthorization drawing board.

The following comments are from Kate Campaigne, legislative specialist at The Heartland Institute; Trevor Martin, director of government relations for The Heartland Institute; and Steve Stanek, a Heartland research fellow and managing editor of Budget & Tax News, a monthly Heartland publication.

You may quote from this statement or contact Campaigne, Martin, or Stanek directly for further comment.

"As the President and Congress return to deliberate a new SCHIP bill, they must concentrate on forming a program that accomplishes SCHIP's original goal: Cover poor children in families who earn too much to qualify for Medicaid and too little to afford private coverage.

"Reauthorization should focus on (1) reducing the number of children who are eligible for coverage but do not receive it; (2) restructuring SCHIP subsidies to allow and encourage families to purchase private insurance so families can decide what health insurance best fits their children's needs; (3) eliminating the federal-state matching formula for SCHIP funding; (4) fixing the incentives that encourage states to enroll higher-income SCHIP children instead of poorer Medicaid children; and (5) making sure SCHIP remains a capped funding program--not allowing it to morph into another entitlement program like Medicaid."

Kate Campaigne
[email protected]
Legislative Specialist - Health and Welfare

"Taxes on tobacco products are already high, and structured in such a way so as to be not only unfair to smokers, but also (and especially) to the poor.

"Tobacco taxes are, by their nature, a declining source of revenue, thanks to government's insistence that the number of tobacco users decrease. Ironically, governments continue to rely upon the revenue generated from this dwindling group of taxpayers.

"Raising taxes to fund a program whose funding allocation is already misspent is not sound public policy. For example, some states allow SCHIP participation for families with incomes up to $72,000 ... and 14 states allow adults to participate."

Trevor Martin
[email protected]
Government Relations Director

"People need to stop listening to the demagoguery and look at the facts. One key fact is this: The Congressional Budget Office estimates 50 percent of new SCHIP funds would go to children in families who already have private insurance. Many economists say the figure could be even higher. This SCHIP expansion aims to subsidize solidly middle-income families who already have insurance for their children. It is not aimed at children in working-poor families as the SCHIP program was intended.

"Furthermore, it is absurd to enact government programs that rely on smoking tax revenue even as tax and health policies discourage smoking. The CBO and U.S. Treasury Department have estimated a revenue loss to the states of $1.07 billion to $1.2 billion a year, as the higher price for cigarettes cuts consumption and prompts smokers to choose low-cost off-brands or turn to black markets."

Steve Stanek
[email protected]
Research Fellow
Managing Editor, Budget & Tax News

For further information about The Heartland Institute, please contact Harriette Johnson, media relations manager, at 312/377-4000 or email [email protected].

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