By any reasonable standards, the expansion of SCHIP, the program to provide health insurance for children whose families don't have employer-provided coverage, aren't quite poor enough to qualify for Medicaid, but nowhere near rich enough to pay for individual policies, should have been a no-brainer -- which is too obvious a cheap joke to bother with. Children should be worthy of the same special concerns that we give to puppies and kittens -- but it doesn't work that way for the Bush administration. On Sept. 7, the administration turned down a New York state request to expand its SCHIP program to cover families at 400% of the poverty level. Instead, the administration issued new regulations which will protect the insurance companies from the possibility that families might drop their private coverage and switch to the state-backed program. One of these regulations required that any child who was previously covered by a private plan wait a full year before being enrolled in SCHIP. The state agreed to that -- if the administration would make exceptions for children who had lost their coverage involuntarily -- because of death of a parent, or because the parent had been fired from a job that provided health coverage. The administration refused. Apparently the nation's private health insurers have to be protected against sick orphans.
While this may have been bad news for New York state, or at least its children, the state at least had the satisfaction of knowing it would collect $4 million as part of the multi-state settlement with UnitedHealthcare. UHC, the country's second-largest health insurer, had reached a $20 million settlement with 36 states. The states had complained of late payments, incorrect payments, failure to apply deductibles properly and other failures to follow the terms of contracts. United Healthcare also agreed to a three-year "process improvement" plan, with quarterly reports, and an assurance that if it failed to show adequate improvement, it would pay up to an additional $20 million.
Nothing in the settlement seems to offer compensation for the providers who didn't get paid, or the patients who didn't have their bills paid properly. Also, $20 million doesn't seem like a very harsh penalty for a company which, in 2005 gave its CEO a $124.8 million compensation package. The CEO in question, William McGuire, left abruptly in 2006 when it turned out that some of that compensation package had been in the form of backdated options. That's was something of a shame, because Dr. McGuire had been an innovator in many areas, including having patients manage transactions via the Internet so that the company could reduce the size of its support staff. Firing people raises stock prices, which raises option values, which raises CEO compensation, which is why Dr. McGuire was worth so much. And the children of the people who were fired might qualify for enrollment in a government-sponsored plan, Medicaid or SCHIP, after only one year.
So -- United Healthcare and other insurers need protection against children with ear infections and sore throats, whose ungrateful parents might not be able to pay the full premiums. They're not without their defenders. When the Senate passed a bill to expand SCHIP, Michael Leavitt, the secretary of Health and Human Services, was quoted as saying that the Senate was jeopardizing the health of millions of children by passing a bill that the president would have no choice but to veto. Sen. Trent Lott, R-Miss., warned that this is the start of a path towards socialized medicine. He said that as if it were a bad thing.
There was a time when limited government and a unitary executive were generally accepted as the best ways to run a society. Government was expected to provide protection against Ghengis Kahn, Attila the Hun and Tamerlane the Great -- which may explain why the unitary executive and limited government are out of fashion in any well-run nation. Also, over time, the role of government expanded to include protection against abject poverty, typhoid fever and raw milk cheese. Now it looks as if the role of government might be expanded to benefit children born into families who didn't get their share of the Bush tax cuts. But first, we have to protect the insurance companies against the children. After all, it's a no-brainer.
Sam Uretsky is a writer and pharmacist living on Long Island, N.Y.
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