Too many real policy debates these days get clouded behind the rhetoric of “it’s for the children”. Sometimes they are also hidden behind a cloud of smoke.
Barack Obama and the Democrats in Congress are making a top priority out of reauthorizing the SCHIP program – you know, ostensibly government-mandated health insurance for kids too rich for Medicare but unable to afford decent private coverage. Like most government programs, SCHIP isn’t all it’s cracked up to be. The Independence Institute’s Linda Gorman has one good critique of the program.
A popular component of the Democrats’ current proposal soon to be before Congress is a 61-cent increase in the excise tax on cigarettes, to raise funds and enrollment in SCHIP. Is it a good idea? Not so fast. Do policy makers want to fund health coverage for kids, or merely reduce the sale of cigarettes and redistribute wealth?
Because here’s the gem: according to research from the Americans for Limited Government Foundation, would end up costing the state of Colorado money. What do I mean? Reduction in cigarette use that’s projected by the change in demand will cost the state of Colorado money from the Tobacco Settlement Agreement and from its own tobacco excise tax. How much? Somewhere on the order of $22 to $24 million.
That’s right: $22 to $24 million that the state of Colorado, already struggling to come up with revenue, would have to find elsewhere.
Now, on the surface, the federal excise tax proposal would seem to be no skin off my back personally. I can’t stand cigarette smoking in the least – though if someone else wants to do it to themselves, I’m not in favor of using the blunt instrument of government to stop them. It’s really convenient for politicians to make them the scapegoats and promise to stick them with the tax burden. (It’s also a very regressive form of taxation.) But in reality, all of us non-smokers too get to foot the bill.
And as far as SCHIP goes, I don’t know but that my own kids might be eligible for enrollment, even though our family bears the cost of private health insurance and sacrifices plenty of luxuries to do so. I’d rather not be dependent on government, thank you very much. Here are some better ideas from the Galen Institute for how to solve the problem of the underinsured:
SCHIP dollars should be made available to parents so they can enroll their children in private plans that they purchase on their own or get through work. Many employer-provided health insurance plans allow parents to pay extra to put their kids on their own policies. But many parents â€“ especially those with lower incomes â€“ often can’t afford it.
SCHIP dollars could be made available to provide subsidies to parents so they can put their children on employer policies. While this is technically possible now, the administrative process is so cumbersome that only a few states have been able to succeed in implementing this option.
Congress must make it easier for states to offer SCHIP as a premium-support program. That would allow families to stay together on the same health insurance policy and give parents control over the benefits that are available to them and their children.
But the debate surrounding the 61-cent excise tax hike is a topsy-turvy one that for several reasons – including the fact that it likely will cost our state money – should be rejected.
I’m not buying the “for the children” bit. And you shouldn’t, either.