Monday, September 24, 2007

Corzine Breaks the Law Again

Jon Corzine seems to have escaped the public relations hit associated with his motorcade speeding to meet with Don Imus. Now he's decided to use lawbreaking for political gain. The Wall Street Journal notes that states like New Jersey have been going beyond the guidelines for SCHIP -- the State Children's Health Insurance Program -- to subsidize health insurance for upper middle income families who don't need the help, rather than the lower middle-income families the program was intended to help:

In a tardy response to this trend, the federal Department of Health and Human Services announced in August that before states could further expand their Schip programs beyond 250% of poverty, they would have to enroll 95% of children below 200% of poverty. This limit moves the most disadvantaged children to the head of the line, before subsidizing those who need it less. In practice, it also checks Schip's mission creep. Such directives are a legitimate tool that all Administrations use to shape policy.

The usual liberal precincts claim to be enraged. Governor Corzine declared that New Jersey would unilaterally disregard the HHS rules and "vigorously continue" to enroll at 350% of poverty -- the highest ceiling in the country. And he'd do so even though about 119,000 New Jersey children under 200% of the poverty line remain uninsured -- and although the state spends 43% of its yearly Schip grant insuring adults.

For several years the number of uninsured New Jersey children under 200% has held steady, while New Jersey's Schip rolls have grown by about 10% a year. One major reason is that the state continues to enroll families with incomes up to $72,275. What's more, this public coverage is mostly substituting for the private variety. A recent working paper from the National Bureau of Economic Research estimates the crowd-out for Schip at 60%, meaning that in order to cover four new kids the government is paying for six more who already had private insurance. This effect is even more pronounced at higher income levels: Nationally, 89% of children between 300% and 400% already have private coverage.

Governor Corzine could always tax his own residents to pay for this largesse. Then again, New Jersey already has one of the worst tax burdens in the country, and Trenton has raised taxes five times in the last six years. For the Governor, the political beauty of Schip is that it allows New Jersey to finance its spendthrift ways on the backs of more responsible states...

And soon enough, every state may become New Jersey. As Senate Finance Chairman Max Baucus recently noted, "I think the Children's Health Insurance Program is another step to move toward universal coverage. Everyone realizes that the goal of this legislation moves us a giant step further down the road to nationalizing health care." At least Mr. Baucus isn't disguising his socialist goal, unlike Mr. Corzine.
The administration ought to call more attention to what Corzine and New Jersey are doing -- denying assistance to the truly needy in order to make it available to those who already have health insurance. The Democrats in Congress are proposing to spend billions more to expand this trend to other states. They scream about the President's decision to finance a war on terror with deficit spending; but then propose to expand health insurance subsidies for those who already have it by expanding the deficit further. Is that the fiscal rectitude the American people voted for in 2006?

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