Long before a Republican Congress created one of the largest federal entitlements in history, the Medicare prescription-drug benefit, it created one of the largest entitlement expansions at the state level in decades, the State Children?s Health Insurance Program, or S-CHIP. Back in 1997, Sen. Orrin Hatch and Sen. Ted Kennedy were prime sponsors of the legislation, which used federal and state funds to subsidize health insurance for families well above the eligibility thresholds for Medicaid ? and thus well into the ranks of the middle class. At the time, Republican staffers on the Hill insisted that S-CHIP was nothing like Medicaid, that it preserved the states? ability to adopt market-based instruments for insuring children, and that its costs would be limited. They had, of course, been outmaneuvered by Kennedy?s staff, though they didn?t yet know it. States had just been ?given? a new program about which they and their congressional delegations would lobby in perpetuity to secure additional federal funding and loosen eligibility rules. As far as the uninsured are concerned, Kennedy?s people knew all along that many if not most of the families getting into S-CHIP would be either exiting or failing to enter the private insurance market, thus weakening it and advancing the long-term goal of a single-payer health plan.
Now that S-CHIP is coming up for reauthorization, there is a Democratic Congress. Guess what they are about to do?
