Mini-SCHIP Sinks
November 27, 2007
by: Elizabeth Wright

Wastewatcher, 7-Nov

While Congress debated the merits of expanding the State Children’s Health Insurance Program (SCHIP) to middle-class families, increasing the cost of the program to $60 billion over five years, and attempted to fund it with a 61-cent increase in tobacco taxes, a similar battle occurred in the state of Oregon with surprising results. SCHIP, a federal-state partnership, was originally designed to assist low-income working families whose household income was too high to take advantage of Medicaid. Congress passed H.R. 976, which was vetoed by President Bush, to re-authorize SCHIP and expand it to families whose yearly income is 300 percent of the federal poverty level, approximately $62,000 for a family of four, from the current rate of 200 percent of the federal poverty level, or about $41,000. As of this writing, there is a lot of arm twisting and negotiation going on to get the votes needed to write a veto-proof bill.

Before subjecting our children and grandchildren to another expensive entitlement, Congress needs to heed a warning from Oregon, a state that is known for its "progressive" politics. On November 6, voters rejected a mini-version of SCHIP by a 60 percent to 40 percent margin. Liberal politicians in the state had hoped to provide taxpayer-funded health insurance to more than 100,000 uninsured children and low-income adults using an 84.5-cent per pack tax increase on cigarettes. Unable to get the votes they needed from Republicans to pass the measure and sign it into law, the Democratic-led state legislature decided to put the measure on the ballot for this year’s state election cycle as a constitutional amendment. As only 20 percent of Oregonians are smokers, the big spenders felt sure they would have a positive outcome on election day.

Both proponents and adversaries clearly recognized the connection between the fate of the Oregon plan and the ongoing debate in Washington. Democratic governor Ted Kulongoski, a strong supporter of the plan, said, "It’s the symbolism. If you can defeat it here in Oregon, you send a chilling message to the rest of the country." A battle royale ensued with opponents and proponents of the healthcare proposal spending millions of dollars on media to promote their respective views. Gov. Kulongoski even threw in $200,000 from his political action committee in support of the mini-SCHIP plan.

But the government-knows-best proponents were rebuffed by the voters of Oregon. After the stunning loss, Gov. Kulongoski opined that "What happened was the tobacco industry bought the election," which summarily dismisses his own constituents, implying that they were swayed like lemmings by the campaign ads. On the contrary, most post-vote analysis showed that Oregon voters were skeptical of expensive government meddling in healthcare, and concerned that the monies raised would be diverted to fund other programs (as politicians are prone to do). Oregonians don’t seem to be averse to routinely amending the state constitution (they have done so more than 40 times in the past 20 years), but they blanched at enshrining a new tax into the document.

Oregon voters saw through the mini-SCHIP smokescreen and didn’t like what they saw. But proponents of the bill were right about the failure of the Oregon version of this misguided idea turning into a primer for Congress, leaving the SCHIP expansion opponents holding the cards.