I'm making a prediction, and you can hold me to it. Sometime in the next year or two, you will see a television ad that looks and sounds something like this:
(Spot begins with scattered sounds of coughing and a picture of a hand cupping a mouth.) "Rachel has a nagging cough that just won't go away. It could be serious, but she hasn't been to the doctor about it because she has no health insurance."
(Camera pulls back to show face.)
"Rachel is only 6 years old."
(A low, ominous musical tone, followed by pictures of poor children.)
"Right now, there are 10 million children in America without health insurance. Ninety percent of these children live in working families but neither qualify for government programs nor have enough money to buy coverage."
(An image of the American flag flashes past.)
"It is simply wrong that children in America are denied health coverage that is provided to children in every other industrialized nation."
(Pictures of ambulances rushing to the hospital and children in hospital beds.)
"And if we don't give these children the health coverage they deserve today, they'll be coming to our hospital emergency rooms in the future with costly illnesses that we may not be able to cure."
(Camera returns to Rachel's face.)
"Call your member of Congress and tell him that Rachel deserves better."
The campaign for KiddieCare has begun. Last fall, candidates talked a lot about senior citizens and Medicare. Television ads played in many congressional districts showing exploitative pictures of frail elders fretting about the possibility of losing their benefits or becoming burdens on their families. You ain't seen nothing yet. AFL-CIO President John Sweeney stated it clearly last December: Congress had better protect and expand government public assistance programs. "If they don't come around," he says, "we'll use children's health the way we used Medicare, and that's a promise and a commitment." Believe him. After all, children make for better TV than seniors. Most people are predisposed to feel sympathy for innocent children but may associate pictures of the elderly with annoying parents or in-laws. That's why international aid organizations run infomercials about poor children in foreign lands rather than their presumably equally poor parents and grandparents.
In fact, those cloying ads with TV's Sally Struthers and Pernell Roberts pitching "a dollar a day" for poor Salvadorans, Somalis, and Bangladeshis are a telling sign of things to come. Already, politicians are starting to use the hook of uninsured children to pitch new health insurance programs at the federal and state levels. In January, Senate Minority Leader Tom Daschle (D-S.D.) proposed a new $4 billion federal program to use refundable tax credits to subsidize 90 percent of private health insurance premiums for families with annual incomes up to twice the federal poverty level. The bill would provide smaller subsidies for wealthier families earning up to $75,000 per year. Since 83 percent of American families make below $75,000, this is a classic middle-class entitlement. Similarly, Bay State Senators Teddy Kennedy and John Kerry have proposed a joint federal-state program to purchase private "child-only" health insurance for modest-to-middle-income families at a projected cost of $9 billion.
In January, President Clinton introduced his budget plan, including a proposal to subsidize health insurance for temporarily unemployed workers and their children. The Clinton administration also wants to require states to use savings from Medicaid reforms to loosen the program's eligibility requirements and expand enrollment. In March, the Children's Defense Fund held one of its media-savvy press conferences to demand health insurance for all American children and announced plans for a June 1 "Stand for Children" featuring CDF President Marian Wright Edelman, Rosa Parks, and noted child welfare expert (and talk show host) Rosie O'Donnell. To make the event a truly nationwide effort, local organizers have formed 170 Children's Action Teams in 38 states to set up a variety of headline-grabbing rallies and protests for the same day. "If you care about the 10 million children who don't have health insurance," Edelman intoned solemnly at the press conference, "sign the virtual petition for healthy children on the Internet and hold a rally or candidate forum to urge leaders to ensure healthy children now."
There are several reasons why congressional Democrats, the Clinton administration, and other advocates of expanded government control over health care have picked KiddieCare as their newest vehicle. One is that they got burned in 1993 and 1994 promoting ClintonCare for everyone, and they want to move slowly and cautiously. Another is that children, unlike the elderly, cost relatively little to insure. They rarely get seriously ill. Obviously, however, the most important reason for trying to sneak the KiddieCare nose under the tent is the Sally Struthers angle. When confronted with manipulative pictures of needy children, otherwise rational people lose their capacity for thought. Emotion takes over. And the people for whom this hook isn't enough often buy the typical CDF pitch that a little money spent now (on health insurance) will actually save money in the long run (by heading off serious medical conditions and ensuring healthy child development).
For those who get a little nervous about the prospect of a massive new government entitlement, largely targeted toward the middle class, the KiddieCare hook-and-pitch represents all that is wrong with the public policy debate today. It is based on gut reactions rather than careful analysis. It assumes that every problem has a government solution. And it stigmatizes those who don't go along as uncaring and cruel.
Let's look at the two components of the KiddieCare message separately. First, the hook. Here are the major claims advocates use to get your attention, and what makes them false or misleading.
? "There are 10 million American children without health insurance." This is almost certainly an exaggeration. Everyone involved in public policy debates should stop treating government statistics as if they come from heaven inscribed on stone tablets. The "10 million children uninsured" claim comes from the Current Population Survey, conducted every month by the U.S. Census Bureau. The annual health data come from the March survey. But the survey never asks directly whether any member of a household was uninsured for part or all of the year in question, and instead presumes uninsured status when households don't report coverage by a major government insurance program or by employer-provided insurance. The questions are inconsistent and tend to understate participation in the Medicaid program. Adjusting for these and other problems, the liberal Urban Institute, a Washington-based think tank, estimates that the number of uninsured children is 8.7 million, not 10 million.
Of those 8.7 million uninsured children, 2.4 million are eligible for but not enrolled in Medicaid, and an additional 700,000 will be eligible for Medicaid by 2000 because of past congressional action to expand eligibility. Eligibility vs. enrollment is largely a distinction without a difference. If brought to a hospital, clinic, or other health care provider, most eligible children would immediately be enrolled in Medicaid and receive whatever services they need for free. In effect, the Medicaid-eligible population, regardless of enrollment, is insured against the cost of health care services. So even according to data from a liberal source, the number of children who actually lack health insurance will be below 6 million by 2000.
?"Poor children are entitled to free health insurance." I don't think they are, but the fact is that poor children already receive free health insurance. It's called Medicaid. In fact, thanks to program expansions passed by Congress in the mid-1980s, families can earn up to 133 percent of the poverty level (and nearly double the poverty-line income in some states) and be eligible for free Medicaid coverage for pregnant women and young children. As a consequence, it might shock you to learn, about 37 percent of all American children up to 5 years of age, and another 20 percent of children between the ages of 6 and 14, are eligible for Medicaid. Most are enrolled. Just from 1988 to 1993, the number of children in Medicaid grew from 12.5 million to more than 20 million.
?"Children without health insurance have little or no access to medical care." This is nonsense. Being uninsured doesn't mean one can't obtain medical care, even for people of modest means. Some families simply pay doctors or hospitals cash for the services rendered. Many others go to subsidized clinics and public health departments to obtain preventive screenings, inoculations, or urgent care. When a child benefits from a federal program such as Women, Infants, and Children (WIC) or state public health initiatives funded by federal block grants, he or she remains technically "uninsured," despite receiving some form of preventive or acute care. Similarly, many children receive free or subsidized care from hospitals and charitable institutions. In 24 states, Blue Cross and Blue Shield plans operate a charity called the Caring Program for Children that provides a range of health care benefits free of charge to uninsured children whose parents cannot afford insurance but who do not qualify for Medicaid. Some 55,000 children benefit from the Blue Cross program alone. Another 96,000 children are enrolled in similar state programs. Are many of these children still "uninsured"? Yes. Are they shut out of the health care system? No. One study estimated that uninsured children receive about 70 percent of the outpatient visits that similar insured children do, and up to 85 percent of the inpatient care.
Children and pregnant women are already the subject of intensive public health efforts. The Health Care Financing Administration, which administers Medicare and Medicaid, reports that 95 percent of all U.S. women get prenatal care in the first two trimesters of pregnancy. Right now, any child in any state can receive free vaccines at a public clinic in their community. Vaccination rates are lower than they should be for children not because they lack access to medical care but because parents aren't doing their job. Purchasing health insurance for these kids won't solve that problem.
?"There are many children suffering and even dying because of a lack of health insurance." This is the crux of the emotional appeal, but also the weakest link in the argument. CDF's Edelman says that many families "forego health insurance for their children and…gamble on the fact that their children will stay healthy. That gamble has left too many children with ailments that would otherwise be treated routinely by doctors."
That may happen occasionally, but the notion that childhood disease is rampant among the uninsured is just bunk. Because of public health efforts aimed at pregnant women and children, as well as the general improvement in living standards and the quality of medical treatment over the past few decades, children today are far healthier than they have ever been. In 1940, about 47 out of every 1,000 babies died before reaching age 1. Today, that number is around 8.5. For children between 5 to 14 years old, the number of deaths per 1,000 fell from 0.6 in 1950 to 0.2 in 1990. Child death rates for cancer, heart disease, pneumonia, and influenza have all fallen significantly since 1960. The total number of reported cases of childhood measles in 1990 was 9 percent of the 1950 figure (320,000). There is, in short, no evidence of an epidemic of sickness and death among lower-income or uninsured children, whose health conditions in fact continue to improve.
Critics of KiddieCare proposals won't succeed if they just poke holes in the notion that there is an "uninsured children crisis." No matter how exaggerated the problem is, there are, in fact, some children who lack health insurance and don't receive the health care they need. There will always be groups like the Children's Defense Fund and their ilk throughout Washington and the state capitals who will make the seductive argument that providing health insurance to children pays for itself by heading off future medical and other costs borne by taxpayers. It is this central tenet of the KiddieCare pitch that must be challenged. Fortunately, there is no lack of authoritative evidence to do so.
We have data on the impact of free or subsidized medical insurance on cost and health from the Medicaid expansions that began in 1986. As now, the argument then was that unless pregnant women and children are insured and receive preventive care services, untreated problems will mushroom into serious and costly conditions. Furthermore, the argument goes, because many of these patients will end up in emergency rooms anyway, taxpayers will pay one way or the other.
The available evidence doesn't support this position. For one thing, KiddieCare may not significantly change the number of uninsured children or pregnant women. Many children and families who will take advantage of KiddieCare subsidies would otherwise have bought coverage on their own. In a KiddieCare world, employers will be less likely to offer health insurance, expecting the government to insure their employees. This has already happened with the Medicaid expansions. A study by economists David M. Cutler and Jonathan Gruber in the Quarterly Journal of Economics found that fully 50 percent of the increase in Medicaid enrollment from 1987 to 1992 was associated with a "crowding out" of private insurance. Some employers canceled or cut back insurance coverage, while employees chose to enroll in employer-provided insurance less often, especially for their dependents (probably because such insurance usually involves deductibles, co-payments, and premium sharing, while Medicaid does not).
Also, simply giving children and mothers health insurance doesn't guarantee that they will use preventive services–though they may well make greater use of physicians and other providers for acute conditions. Even vigorous outreach programs such as direct mail, phone calls, and home visitation by nurses don't seem to make much difference in preventive service consumption. In a study of Medicaid-eligible families in North Carolina published in the American Journal of Public Health, Dr. Maija Selby-Harrington and other public health researchers at the University of North Carolina found the results of outreach programs to be statistically significant but small. Another study by the Agency for Health Care Policy and Research within the U.S. Department of Health and Human Services found that for low-income preschool children without health insurance, a full year of Medicaid increased the probability of bringing children in for routine checkups by only 17 percent. "Factors other than insurance and income, such as the lower educational attainment of low-income mothers, explain approximately 80 percent of the gap between low-income and other children in their well-child visits," the agency concluded.
Comparing the costs and benefits of providing prenatal care through government programs, Dr. Jane Huntington of the Group Health Cooperative of Seattle and Dr. Frederick A. Connell of the University of Washington's School of Public Health and Community Medicine concluded that there is no evidence such care pays for itself by heading off future health care costs. Their article, in the November 10, 1994, issue of The New England Journal of Medicine, was notable for a couple of reasons. One was the scope of their analysis; they reviewed more than 100 studies on the effectiveness and economics of prenatal care. Another was that despite their findings, they support government-provided prenatal care programs. They are, in other words, hardly biased against the KiddieCare thesis that spending money on children and pregnant women will pay for itself in the long run.
Huntington and Connell found that the research on which the claims of the CDF and others are based is full of methodological problems. For one thing, they noted that the studies did not truly compare an experimental group and a control group of similar characteristics, because mothers elected to take advantage of the programs. "The current perception of prenatal care oversimplifies the difficulties of delivering prenatal care to women who do not now receive it, overestimates the benefits of prenatal care, and contributes to the medicalization of complex social problems," they wrote.
Indeed, there is no clear evidence that infant mortality rates, for example, bear any relationship to health insurance coverage or prenatal care. They may be more related to such behaviors as using drugs and having children out of wedlock. This is not to say, of course, that preventive care isn't worthwhile or that children and pregnant women don't benefit from it. But it doesn't appear to pay for itself in future savings.
A Little Honesty, Please
At its root, the argument for guaranteeing health insurance to all American children (and their families) is a moral one, not an economic one. Huntington and Connell, the prenatal- care debunkers, admit that cost savings may not be the appropriate criterion by which to judge government health programs: "It may be better to ask not 'How much does this save?' but, rather, 'How much is this worth?'" A little honesty would be helpful. Advocates of KiddieCare believe that children as a matter of right deserve health insurance paid for by the government. They should have the courage of this conviction, rather than attempting to camouflage it in maudlin sentimentality and impossibly precise pseudoscience.
For those who favor less government, the moral case for KiddieCare has a straightforward rebuttal: No government should be in the business of promising entitlements to middle- income, able-bodied citizens and their children. That is what KiddieCare would be: It is an attempt to plug the "crack" between Medicaid coverage for the poor and near-poor and the private health insurance market for those whose employers provide either coverage or the income to buy it. If the child of a family making $75,000 is entitled to subsidized health care from the federal government, then there is effectively no limit on what government can promise and force taxpayers to fund. Except, of course, the practical limit that if we maintain and expand middle-class entitlements, the federal welfare state will eventually go out of business. One can only dream.
Contributing Editor John Hood (Locke@interpath.com) is president of the John Locke Foundation, a state policy think tank in Raleigh, North Carolina, and the author of The Heroic Enterprise (The Free Press). His Reason Public Policy Institute study on Medicaid reform is forthcoming.