I have been an insurance broker in the state of Illinois for the past 15 years and I have seen first hand what happens when an over burdened, tax funded, Government controlled, entitlement program like Medicaid is offered to those with incomes well into the middle class.
Last year, SCHIP covered about 7 million low-income children and Medicaid covered an additional 23 million. This year, 2009, the U.S House of Representatives passed the H.R.2 SCHIP Expansion Bill which adds another 6.5 million children to Medicaid.
In fact, according to U.S. Census Bureau data, 42 million children will now be eligible. The bill also allows States to receive federal reimbursement for adding more immigrant children and pregnant immigrant mothers, and removes the 5 year waiting period now required for legal immigrants to be eligible. This would enable immigrants to become eligible for health benefits the moment they get here.
Currently, the present income eligibility cap is $44,000 for a family of 4. The new bill raised the Medicaid limit to $66,000. New York will even include families who earn $88,000 and other states allow families to subtract from their income calculation what they spend on rent or mortgage or heating or food or transportation. This means that children in some families who have incomes well over $100,000 will now be eligible.
With the median U.S. household income around $50,000, 60% of U.S. households still earning less than $62,000. This means that 3 out of 5 American households will now qualify for free health care for their children. It also means that the other 2 out of 5 household will have the burden of paying for all of this!
Let's take a look to see how some of these programs are doing. Click here to read about the Medicaid "expansion" program enacted in my home State, Illinois, by our recently impeached and now infamous Democratic Governor Rod Blagojevich.
In fact, Blago was so "generous" that he expanded these Medicaid entitlement programs to include a defunct "All Kids Covered" plan, a defunct "Mom's & Babies" plan and an equally defunct "Family Care" plan.
These entitlement programs were designed to provide FREE health insurance coverage to all low income women who are currently pregnant (Mom's & Babies) and all children - here legally or ILLEGALLY (All Kids Covered) but they were also to provide FREE health insurance to all low income mothers of children who are insured under the "All Kids Covered" program (Family Care).
Now, one does not need to study actuarial science to quickly conclude that these types of entitlement expansion programs simply can not continue to work without massive and endless influxes of tax payer dollars. In fact, the State of Illinois is currently $1.5 Billion (yes, that's BILLION) behind in payment of claims to medical practitioners who have already provided treatment to program recipients. Furthermore, submitted claims by unpaid practitioners have accrued a potential liability of $81 million in interest due to payment delays over the past 8 years.
Read more about the problems with claims payments here.
Update: As of January 2009 a moratorium has been placed on the sliding scale portion of the Illinois Family Care and the Mom's & Babies program. One can only wonder why. Could it be due to lack of funding?
Illinois had been lauded as the "Flagship" state for all others to follow regarding the expansion of the Medicaid entitlement programs. If this is the template for all others to follow, then god help us all, or at least those of us that actually fund the Medicaid system through our hard earned tax dollars.
Weighty decisions such as expanding the Medicaid system to virtually "All Kids" regardless of their actual need, simply can not be made based entirely on emotion! Prudent decision makers must weigh the desire to help all mankind against fiscal REALITY. There simply is not enough money to provide such irresponsible expansions of the Medicaid program.
This is the real reason why President Bush vetoed the SCHIP program after the $780,000,000,000 (BILLION) "Porkulus Maximus" Bailout Bill passed in the Senate which was pushed hard by the Democratic Party. Of course, despite the caution of conservatives in the Republican party, the SCHIP bill did pass both the House and
Senate in 2009.
But how can we afford to pay for such entitlement programs? Should we limit these programs to those that truly cannot afford to purchase individual health insurance on the open market? How will we determine who is deserving of such entitlements (e.g. legal residents of this country who actually qualify during a legitimate needs assessment.)
What about personal responsibility? Should we also pay for the middle class if they can afford to purchase health insurance on their own?
Expansion of these entitlement programs to the middle class may be well meaning, but it is undoubtedly a fiscally irresponsible act that will end up crippling the already over burdened system.
We might not feel the direct impact of this now, but we most certainly will when all of the "Baby Boomers" start entering the Assisted Living and Long Term Care arena. Should we just let Boomers who don't have the forethought to purchase Long Term Care insurance off of the financial hook while taxpayers shoulder the burden?
Today, those of us who are in need of health insurance have many options to choose from and, contrary to popular belief many of these options are priced very affordably.
An integral part of being personally responsible is that you take the time to explore ALL of your options so you can fiscially sound decisions BEFORE leaning on a an already over burdened Medicaid system.
If you have other options, you should never leave any decisions up government bureaucrats, especially your healthcare.
To see a list of Frequently Asked Questions (FAQ's) relating to Health Insurance, click here.
About the author: C. Steven Tucker, is the President of Small Business Insurance Services, Inc. He is a multi-state licensed insurance broker who has been serving the Small Business community and Self-Employed for 15 years. C. Steven has served as a Subject matter expert for the Wall Street Journal and Fortune Small Business Magazine and hosts his own internet radio show, entitled, "Health Insurance 101." He is also touted for being a consumer watchdog against greedy insurance companies, insurance scams and unscrupulous agents on Twitter.