"Let them drink beer, while you pay." This is how Colorado taxpayers should interpret Governor Hickenlooper's recent veto of Senate Bill 213. For some families, SB 213 would have increased the Child Health Plan Plus (CHP+) enrollment fee to $20 per month. This is what the lowest income U.S. households typically spend on alcohol.
For families earning less than 250% of the federal poverty level, CHP+ currently charges a $25 annual enrollment fee for one child. SB 213 would have increased the fee to $20 per month for families with incomes between 205% and 250% of the FPL. Additional children would cost $10 per month, with a $50 cap.
Given that families in this income range spend much more than this amount on non-essentials, it's insulting to eligible parents to suggest that parents would not pay the increased fees that SB 213 proposed.
For comparison, 22 states charge at least $20 for this income range, while 28 charge at least $10, reports StateHealthFacts.org.
To justify his veto, the governor trots out a familiar boogieman: the cost-shift from the uninsured. He claims that the department running CHP+ "estimates" that 2,500 kids would lose CHP+ coverage, and says they "would likely become uninsured." Cost savings from increased fees would be "out-weighed by... costs of children... ending up... in emergency clinics."
This is wrong. First, many parents in this income range can afford insurance for their kids. Second, the uninsured pay more of their emergency medical bills than CHP+ does.
CHP+ is a State Children's Health Insurance Program, which "have consistently paid less per [emergency department] visit than... the uninsured," concludes a 2008 study published in Academic Emergency Medicine. In the study, 60% of the uninsured had lower incomes than the families SB 213 would affect.
Many parents who drop CHP+ enrollment would buy insurance for their kids. For example, when Missouri introduced monthly premiums for its child health plan, Urban Institute researchers found that "increases in other types of insurance coverage prevented an increase in the share that were uninsured."
CHP+ and its counterparts in other states "crowd out" commercial insurance such that parents drop commercial coverage to enroll. MIT economist and past Obama advisor Jonathan Gruber finds a "crowd-out rate of about 60%." The reverse is also true. When parents drop CHP+, some buy insurance. The Congressional Budget Office reported that in 2005, between 50 and 77 percent of kids in households with incomes affected by SB 213 had commercial insurance.
Another reason to expect that many CHP+ eligible parents can afford insurance is how much they spend on indulgences. A single parent with a $36,000 income is eligible for CHP+. According to the Bureau of Labor Statistics' Consumer Expenditure Survey, households earning up to $30,000 spend, on average, more than $190 per month on alcohol, tobacco, sweets, and entertainment. They also spend, on average, almost $80 per month on telephone services.
Also realize that the governor's "2,500 kids" figure is no "estimate," but merely an assumption by the Colorado Legislative Council. Even with this assumption, and assuming -- despite evidence -- that all 2,500 kids become uninsured, and then assuming that their parents don't pay ER bills, increased fees would still save taxpayers money.
The cost-shift from the uninsured is at most "1.7% of private insurance premiums," concludes a Kaiser Family Foundation report. This is about $80 for a typical Colorado employer-sponsored plan covering one employee. Adding 2,500 uninsured kids increases Colorado's uninsured population by less than half of one percent. The $80 cost-shift would rise by 25 cents.
The savings is at least four times more. According to StateHealthFacts.org, annual CHP+ spending is almost $13,00 per enrolled child. A decrease of 2500 enrolled children would save taxpayers more than $3 million, or about one dollar per Coloradan with commercial insurance.
Remember, this estimate ignores factors that increase taxpayers' savings: uninsured patients pay more of their emergency department bills than CHP+ does. Many families with income above twice the poverty line buy insurance for their kids. These families also spend, on average, around $200 a month on indulgences. They can certainly afford to pay $20 a month for their child's health plan, while authorities make taxpayers pay the rest.
CHP+ officials will soon propose changes to CHP+ fees and possibly co-payments, which are also extremely low. Maintaining current fees would not only be an injustice to taxpayers, but also an insult to eligible parents. The fees imply that parents value enjoying life's amenities more than their own children's health.
A version of this article originally appeared in the Boulder Daily Camera.
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How much of the discretionary income that upper-income people save with the low, regressive tax rates goes to alcohol? Are we insulting these folks by keeping their taxes low and assume they'd rather drink than help keep our schools, roads, and social safety net intact?
I am wondering how this number, which includes alcohol, compares to the same category in higher income levels, as well. Anecdotally, I know many more middle class people who regularly drink with dinner than I do people who cannot afford to do so. I know many people in each category, well.
You also said, "They also spend, on average, almost $80 per month on telephone services."
I would argue that telephone is a necessity in this day and age. It is the way you are expected to communicate with your employer, your child's school, your bank, the IRS, and with the government. If you have children, it is especially important. To call a telephone a luxury is laughable.
Last, the assumption people in the lower economic level brackets are "offended" by not having to pay more for their children's insurance is preposterous, and reflects your complete lack of reality. Where is your evidence for this statement? Frankly, I assert you made it up.
I would like to know a link where I can find your data analysis. I went to the link you provided and I cannot find it. There is a chart, but the chart does not link directly to a federal source -- it only quotes one. You said, "According to the Bureau of Labor Statistics' Consumer Expenditure Survey, households earning up to $30,000 spend, on average, more than $190 per month on alcohol, tobacco, sweets, and entertainment." Where is a direct link to the orginal source?
I would like to see what is included under the category "entertainment". A television? Cable tv? When I lived in my previous home, I had trouble getting reception for the regular channels. I had to have basic cable to be able to see the tv. Because of the (Republican-initiated) paranoia-inducing levels of security threat (green, orange, red), I was convinced I needed a television for important breaking news of terrorism. Since then, I've realized the War on Terror was largely fabricated by the right wing to manipulate the public, but I still think it is wise for everyone to have a television for at least weather emergencies.
As for tobacco, I agree that item should be zero for all income levels. Tobacco is weapon of murder prepetrated continuously by a greedy and opportunistic industry that has added known carcinogens and addictive substances, to further people's addictions and kill them.