S-CHIP: A Failure, But Also a Success!

E.J. Dionne’s column on S-CHIP today strikes me as somewhat oddly reasoned:

Bush argues that the $35 billion five-year expansion of the program, worked out between the Democrats and such leading Republicans as Hatch and Sen. Chuck Grassley of Iowa, might push too many children into government insurance. Bush wants a $5 billion expansion over five years, which the Congressional Budget Office says would eventually shove more than 1 million children off the program at a moment when the number of kids without health insurance is growing after years of decline. (That decline, by the way, was due in significant part to the success of SCHIP.) The goal of Hatch, Grassley and the Democrats is to expand the program to 10 million children from the roughly 6.6 million covered now. This battle is central to the long-term goal of universal coverage.

Dionne starts by arguing that the program is working, citing a minor decline in the number of children without health insurance. But then he goes on to admit that, actually, in recent years it’s failed to accomplish its goals–in other words, at this point, it’s not working–and, of course, will continue to do so without a major influx of federal cash. So a program that posted a few initial gains but now looks to be less than successful just needs a high-dollar to work; in other words, the program won’t work as designed, so hey… let’s make it bigger!

It’s a nice little trick, allowing him to simultaneously argue that the program is both a success and yet desperately in need of additional funds. I won’t deny that, as Martin Kady writes in the Politico, the issue will probably turn out to be a political loser for conservatives. The notion that health care–or, specifically, lack of health insurance–is a problem that ought to be solved by government is simply too pervasive right now for Republicans to have much success with a smallish program like this. Because of the relative narrowness of the program and the general anxiety over health insurance right now, this will almost certainly go down as a win for Ezra Klein and the rest of the country’s sneaky sequentialists.

But that doesn’t mean that Michael Cannon isn’t right that this creaky program, which sets up bad incentives and costs far too much, shouldn’t be tossed out entirely.