Hawaii is ending the only state universal child health-care program in the country, after just 7 months.
The Keiki (Child) Care Plan was designed to offer health care insurance to the children of parents who earn too much to qualify for Medicaid or Hawaii’s State Children’s Health Insurance Program (SCHIP), but are felt not to be able to afford private coverage.
State officials found that families were dropping private coverage in order to enroll their children in the “free” plan In fact 85 percent of the children in Keiki Care were previously in a private, nonprofit plan costing $55 per month. Facing budgetary shortfalls, Governor Linda Lingle pulled the plug on funding.
“All this is a lesson for political leaders in Washington who are drafting plans now to expand SCHIP to children in families earning up to $82,000 a year or more. That expansion would wind up doing what Keiki Care did: mainly crowd out the private coverage that millions of middle-income kids already have,” writes Grace-Marie Turner (NY Post 10/27/08).
According to MIT economist Jonathan Gruber, SCHIP crowds out private insurance 60 percent of the time. California, Pennsylvania, Illinois, and Wisconsin have turned back from major efforts to approach universal coverage because of the prohibitive cost. Massachusetts officials no longer claim that such a goal is even possible, Turner writes.
Two Massachusetts safety-net hospitals, Boston Medical Center and Cambridge Health Alliance, will be cutting programs because of state cuts of more than $200 million in payments to Medicaid providers (Boston Globe 10/17/08).
Designed to cover 3,500 children, Keiki Care was a small-scale program. Fiscal problems were evident when only 2,000 children had enrolled. Larger programs lead to fiscal disaster (Investors Business Daily 10/20/08).
Tennessee’s disastrous experiment with universal coverage “forced dozens of hospitals out of business, pushed thousands of doctors and other health care professionals out of the state, destroyed any semblance of competitive health insurance market, and nearly drove the state government into bankruptcy,” writes Patrick Poole (American Thinker 1/17/07).
The state budget was in such straits that a state income tax was proposed, precipitating the Tennessee Tax Revolt of 2000. Thousands of citizens swarmed into downtown Nashville, and traffic came to a virtual standstill, as cars blared their horns from 7:30 a.m. well into the night. Legislators abandoned the income tax proposal and fled. Poole described it as the “most exhilarating experience I have been privileged to…witness….” Democrat Gov. Phil Bredesen was forced to dismantle TennCare piecemeal.
People like Gov. Arnold Schwarzenegger, who proposed to inflict state health insurance on all residents of California, including illegal aliens, should go to Tennessee if they need a heart valve replaced, suggests Poole, to see first-hand the results of universal health care.
The same thing is happening in New York State. As the State government offers medicaid coverage for children of people with higher salaries, people with jobs cover themselves and cover their children with the State coverage. They save the annual family premium and reduce copays. Sometimes, they give themselves better coverage and their children get the State coverage. Or they get both coverages for their kids (if its free) and play a game of which insurance card to give depending on their immediate situation.
NY is drowning in medical costs due to free coverage. However NY state is smarter about it by bankrupting others instead of itself. NY state pays half of the medicaid bill with the feds picking up the other 50%. NY believes this brings in federal monies. However, counties are forced to pay half of the State’s 50% portion. This causes our County budget to consist of 90% medicaid costs. No money for anything else.
We previously lived in Memphis TN. What a mess.
“America is no better at socialism than the rest of the world.”
Socialized medicine will not work. Increased utilization of HSAs will!
Hawaii has mandated employer-provided health care since 1974, with Hawaii’s businesses paying the highest percentage of employee health insurance premiums in the country because the Hawaii Prepaid Health Care Act (PHCA) requires almost all Hawaii employers to provide health insurance to employees who work 20 hours or more for four consecutive weeks with an employee’s contribution to health insurance coverage not exceeding 1.5 percent of wages. The result is a per-capita total health cost that is 60% of the US average – about the same as the rest of the world, with a lower than the national average uninsured rate. The new “universal program” was for children only and was stopped due to budget concerns, leaving intact the great coverage and low cost that comes from mandatory affordable employer provision of coverage. The insurance companies 31% overhead has to end and will only end via a public option and an affordable mandate – either via subsidy as in the Senate Bill or via mandatory employer contribution as in Hawaii. Please contact an actuary – I am a retired actuary – before you write your next piece on insurance.