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MediKid: The Evil
Side of Doing Good

by Judy Cresanta

nder the guise of providing needy children with health coverage, in 1997 the president and Congress enacted a wasteful program, dubbed "MediKid." Before leaving office, Governor Bob Miller seized upon the Clinton initiative, named it Nevada Check-Up and pushed it through the state legislature. Financed partly through Medicaid cuts and partly through increased taxes on the poorest Americans, MediKid is based on a weak understanding of health insurance and children’s health care needs. Here in the Silver State, Nevada Check-Up neglects the real health needs of children, putting the latter into a system where bureaucrats and politicians—not parents and health care professionals—control decisions and spending. Far from improving our children’s health, expansion of MediKid will actually bring us ever closer to a universal government-run HillaryCare disaster.

The Congressional Budget Office (CBO) estimates MediKid will cover 3.4 million U.S. children by July 1. But U.S. Census Bureau statistics show there are only 2.8 million chronically uninsured children in America (not 10 million, as MediKid proponents claim). CBO figures show MediKid coverage will cost taxpayers at least three times the cost of private coverage per newly covered child. Instead of creating a new federal program, Congress could have simply bought private health insurance policies for the same number of children and saved $16 billion.

Much of this waste arises out of duplication of services already being provided by the private sector. Because of the high qualifying threshold—here in Nevada, any family of four earning under $36,000 is accepted—MediKid includes 1.4 million children already covered by private insurance. In the Silver State, nearly half of all eligible children already have such coverage. All the program would do is make their coverage a publicly funded entitlement. For most people, the choice between paying a premium for health care insurance versus getting it for free becomes a no-brainer. Even those who can afford to pay health insurance will have a strong incentive to shift costs from their budget onto the public’s.

Notwithstanding this, Nevada’s Division of Health Care Financing and Policy reported in January that only 1,381 children had been signed up for Nevada Check-Up: 823 from Clark County, 249 from Washoe County and 309 from rural counties. Poor people are not signing up for the program because it is still more expensive than the free health care available under the state’s already existing Medicaid program. Also, hospitals presently offer free medical care to anyone who qualifies under the hospitals’ indigent care programs. As William Hale, CEO of University Medical Center in Las Vegas, said, "Because two-thirds of the children targeted by the Check-Up program live in Southern Nevada, I question whether parents will even apply for and pay fees under the program when they can come to the hospital for free treatment right now."

In rebuttal, the man who drafted Nevada Check-Up for the state Department of Human Resources, Chris Thompson, said, "I feel pretty good that if we get the word out, parents will jump at the chance to insure their children for $200 or less a year." Though that logic would work for families presently purchasing private insurance, it doesn’t work for the truly poor. Thompson is expecting people who pay nothing now to sign up to pay not only the initial $20-50 enrollment fee but also additional monthly premiums.

Assembyman David Goldwater, seeing the Catch-22 inherent in the program, suggested Nevada Check-Up be rolled into the state Medicaid program. The response from Janice Wright, acting director of the State Health Care Financing Department, was bureaucratic resistance. She noted that Nevada Check-Up’s application is only two pages, while Medicaid’s is 16. Always eager to apply the Peter Principle, the Legislature’s Interim Finance Committee approved the hiring of 12 additional people to man the program, leaving the door open to hire another 10 "if the program warrants it."

Nevada’s experience with entitlements assures us that the costs of Nevada Check-Up will far exceed current projections, leading lawmakers to feel they either have to raise taxes or ration care. Higher taxes make it harder for parents to protect their children’s health. The typical uninsured family already pays more in taxes than it spends on food, clothing and housing combined. The other option—rationing care—is even more frightening.

Why is our state opting for such an inherently absurd program as Nevada Check-Up? Instead, Nevada should use this as an opportunity to rethink Medicaid, which has been eating up our state’s budget. Better solutions would be for Nevada to provide a refundable tax credit or vouchers by direct deposit to accounts for uninsured children. These at least would not insulate recipient families from the true cost of health care.

Maximum consumer choice should be a primary goal of reform. The alternative is HillaryCare at its worst. NJ

Judy Cresanta (jc@npri.org) is president of Nevada Policy Research Institute.


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