The news from Hawaii that the state is ending its experiment in universal health coverage for children may well be the timely warning that Washington needs to avert bankruptcy. Hawaii has learned what some have known all along–that the cost of free care is unaffordable. The AP reports:
“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”
Does that sound familiar? That is precisely what Heritage warned against in last year’s debate on the State Children’s Health Insurance Program (SCHIP). Shifting the cost from the private sector to the public sector does not increase insurance rates, it, well, merely passes the cost around like a proverbial hot potato. Hawaii demonstrates the issue has become expansion of public benefit programs as a means of redistributing income rather than about making health care affordable.
One wonders whether other states also pursuing universal coverage are listening. The budget crisis in California has diverted the state at least temporarily from the same path. Illinois is already spending itself into oblivion and routinely has found it is incapable of paying its Medicaid bills on time over the past few years. New Jersey is lobbying Washington for an increase in the federal contribution to Medicaid while at the same time expanding coverage with state only funds.
Senator Obama’s proposal for universal coverage of children including mandates and expansion of Medicaid and SCHIP has always been shaky for lack of specifics. How do mandates work if there are no penalties as he responded in the most recent debate? His home state of Hawaii and adopted state of Illinois demonstrate his proposals won’t work.