As I understand it, there’s almost 14 million children uninsured today.
— Senator Tom Daschle (D-SD), January 9, 1997
We have called this news conference today to announce that it is Democrats’ number one health priority this year to reverse those trends by guaranteeing access to health care for those 10.5 million children who currently lack coverage.
— Sen. Daschle, January 16, 1997
Senate Minority Leader Daschle claims to have identified a fundamental flaw in our health care market: too many children lack health insurance. To remedy this, he has proposed legislation aimed at providing health coverage to uninsured kids, as have Sens. John Kerry (D-MA) and Ted Kennedy (D-MA). Unfortunately, Sens. Daschle, Kerry and Kennedy have a poor understanding of the number and plight of uninsured kids and their families. As a result, they have proposed government fixes that would cause even more kids to go uninsured.
Sen. Daschle has estimated there are 14 million uninsured children in the U.S. When he announced his initiative, he pared his estimate down to 10.5 million. This implies that 10 to 14 million children are growing up without health insurance, and may never get the health care they need. Fortunately, the implication is false.
Like any market, the health insurance market is always in flux. Families have spells of noncoverage when they change jobs, earn too much to qualify for Medicaid, choose not to take advantage of Medicaid, or when their employer drops coverage. When a family regains coverage depends on insurance costs, family finances, and their employer’s ability to provide health benefits.
The size of the problem. Sen. Daschle’s estimates are based on the U.S. Census Bureau’s Current Population Survey (CPS). However, the CPS is designed to collect information on employment — not health coverage — and contains biases that inflate the number of uninsured. A more accurate measure of uninsured children is given by the Census Bureau’s Survey of Income and Program Participation (SIPP), which shows who loses their health insurance and for how long.
The 1992-1994 SIPP reveals that 2.8 million kids (4 percent) had no health coverage during the 28 months studied. It also reveals that over half of all children who lost health coverage regained it within four months. Thankfully, that is shorter than for any other age group and over one month shorter than reported in the 1991-1993 SIPP (5.1 months).
In his estimates, Sen. Daschle includes children who are eligible for Medicaid assistance but do not enroll. The General Accounting Office (GAO) estimates 2.9 of the 9.8 million children counted as “uninsured” by the CPS fall into this category. While comparisons between CPS and SIPP data are difficult, the GAO’s 2.9 million Medicaid-eligible children must overlap some of the 2.8 million children uncovered for all 28 months.
This refutes the notion that 10 or more million children are growing up without health insurance. In fact, the vast majority of kids are covered continually. Although some 2.8 million kids are chronically uninsured, many of them are already eligible for Medicaid. Still more kids lose their health insurance, but regain coverage after a brief time.
Implications for health care policy. To insure more children, Congress must act to make spells of noncoverage shorter and less frequent. Congress can do this by repealing laws that make health coverage too expensive, such as laws that force families to buy more insurance than they need. Congress should also eliminate unfair tax laws that make health insurance more expensive for families than it is for businesses.
However, Sens. Daschle, Kerry and Kennedy have proposed legislation that would make spells of noncoverage longer and more frequent. Both plans would erect massive government health care bureaucracies. It has been suggested that Sen. Daschle will pay for his program by raising taxes on businesses, which would cause even more companies to drop health coverage for children. Sen. Kennedy has himself admitted that his proposal will cause employers to drop coverage for children: “There will be some slippage.” Sens. Kerry and Kennedy propose to pay for their new $9 billion a year entitlement with a regressive hike in excise taxes. Excise taxes hit low-income families disproportionately hard — the same individuals this new entitlement purports to help.
The crisis described by Sen. Daschle does not reflect the situation of America’s children. A closer look at the problem suggests that Congress can best help uninsured kids by finding ways to make spells of noncoverage shorter and less frequent. There are better ways to solve the problem than new taxes and more government.
FreedomWorks Letter to Congress in Support of Fiscal Commision Act (H.R. 5779)