Hawaii Learns Tough Lession: Free Childrens Health Insurance Program Abused By Wealthy Parents
Fascinating commentary on human nature. Thanks to Grace-Marie Turner at the Galen Institute (this excerpt is part of an article published in the NY Post today):
HAWAII just had a vivid les son in health-care economics, learning that if you offer people insurance for free – surprise, surprise – they’ll quickly drop other coverage to enroll.
As a result, Hawaii is ending the only state universal child health-care program in the country after just seven months.
The program, called the Keiki (Child) Care Plan, was designed to provide coverage to children whose parents can’t afford private insurance but who make too much to qualify for other public programs (such as Medicaid and Hawaii’s State Children’s Health Insurance Program). Keiki Care was free for these gap kids, except for a $7 office-visit fee.
But then state officials found that families were dropping private coverage to enroll their children in the plan. “People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink of Hawaii’s Department of Human Services.
In fact, 85 percent of the children in Keiki Care previously had been covered under a private, nonprofit plan that costs $55 a month.
When Gov. Linda Lingle saw the data, she pulled the plug on funding. With Hawaii facing budget shortfalls, she realized it was unwise to spend public money to replace private coverage that children already had.
Yet Lingle is facing a political firestorm in the state from critics who say that she’s denying children health insurance – notwithstanding the fact that children in Hawaiian families earning up to $73,000 a year are eligible for Medicaid…
The Hawaiian debacle should also be a caution to Barack Obama, who wants to mandate that all children have health insurance. This would plainly not only require penalties for those who didn’t comply but also new programs to help parents get their children covered. The risk of crowd-out will be great.
Great post. It’s great to see bloggers continue to focus on health care as we approach next week’s election. It is, without a doubt, an important and complex issue. Did you know that the federal government spends nearly $700 billion annually on health care? Or that the private sector costs an estimated $1.1 trillion each year?
Here at Public Agenda we’re put together an informative non-partisan guide that focuses on the facts and on the plethora of perspectives surrounding the health care debate in America. You can learn more about health care statistics by visiting publicagenda.org/citizen/electionguides/healthcare and feel free to contact us with any questions.
Did parents who's kids were previously enrolled in the $55/month plan go for the free plan because it provided more comprehensive coverage? What private medical insurer would give adequate coverage for $55/month? Was it catastrophic coverage, perhaps? Or…?
I suspect there's more to the story than we're learning in this blog post.
If I'm wrong, I still believe the question must be asked (and answered):
Were there any extenuating circumstances ~ morally and pragmatically valid circumstances ~ that led parents to reasonably trade $55/month coverage for free coverage (in violation of the free program's mission)?
Or were they simply being greedy, as most humans are wont to be when freebies are readily at hand?
Finally, I would ask: Was the free program administered responsibly? I suspect not. Otherwise, how could kids with existing (allegedly adequate) coverage pass through “due diligence” and screening to qualify for free coverage?
Who qualified these “85%” of enrollees who ~ it turns out much, much later, unbeknownst to the free program's leadership ~ already had perfectly good, affordably-priced insurance?
It took me two full months of tests and trials and waiting to get disapproved for Vermont's VHAP program (for unemployed and low-income residents) and approved for their Catamount program (for slightly less poverty-stricken unemployed and working-poor folks).
If Vermont can put me through a two-month mill (and I still don't have insurance yet; enrollment will take another month, and I'll have to wait 12 months for treatment of pre-existing conditions), why couldn't Hawaii's free program have been more rigorous in its application/approval processes?
Did parents who's kids were previously enrolled in the $55/month plan go for the free plan because it provided more comprehensive coverage? What private medical insurer would give adequate coverage for $55/month? Was it catastrophic coverage, perhaps? Or…?
I suspect there's more to the story than we're learning in this blog post.
If I'm wrong, I still believe the question must be asked (and answered):
Were there any extenuating circumstances ~ morally and pragmatically valid circumstances ~ that led parents to reasonably trade $55/month coverage for free coverage (in violation of the free program's mission)?
Or were they simply being greedy, as most humans are wont to be when freebies are readily at hand?
Finally, I would ask: Was the free program administered responsibly? I suspect not. Otherwise, how could kids with existing (allegedly adequate) coverage pass through “due diligence” and screening to qualify for free coverage?
Who qualified these “85%” of enrollees who ~ it turns out much, much later, unbeknownst to the free program's leadership ~ already had perfectly good, affordably-priced insurance?
It took me two full months of tests and trials and waiting to get disapproved for Vermont's VHAP program (for unemployed and low-income residents) and approved for their Catamount program (for slightly less poverty-stricken unemployed and working-poor folks).
If Vermont can put me through a two-month mill (and I still don't have insurance yet; enrollment will take another month, and I'll have to wait 12 months for treatment of pre-existing conditions), why couldn't Hawaii's free program have been more rigorous in its application/approval processes?
Did parents who's kids were previously enrolled in the $55/month plan go for the free plan because it provided more comprehensive coverage? What private medical insurer would give adequate coverage for $55/month? Was it catastrophic coverage, perhaps? Or…?
I suspect there's more to the story than we're learning in this blog post.
If I'm wrong, I still believe the question must be asked (and answered):
Were there any extenuating circumstances ~ morally and pragmatically valid circumstances ~ that led parents to reasonably trade $55/month coverage for free coverage (in violation of the free program's mission)?
Or were they simply being greedy, as most humans are wont to be when freebies are readily at hand?
Finally, I would ask: Was the free program administered responsibly? I suspect not. Otherwise, how could kids with existing (allegedly adequate) coverage pass through “due diligence” and screening to qualify for free coverage?
Who qualified these “85%” of enrollees who ~ it turns out much, much later, unbeknownst to the free program's leadership ~ already had perfectly good, affordably-priced insurance?
It took me two full months of tests and trials and waiting to get disapproved for Vermont's VHAP program (for unemployed and low-income residents) and approved for their Catamount program (for slightly less poverty-stricken unemployed and working-poor folks).
If Vermont can put me through a two-month mill (and I still don't have insurance yet; enrollment will take another month, and I'll have to wait 12 months for treatment of pre-existing conditions), why couldn't Hawaii's free program have been more rigorous in its application/approval processes?
Did parents who's kids were previously enrolled in the $55/month plan go for the free plan because it provided more comprehensive coverage? What private medical insurer would give adequate coverage for $55/month? Was it catastrophic coverage, perhaps? Or…?
I suspect there's more to the story than we're learning in this blog post.
If I'm wrong, I still believe the question must be asked (and answered):
Were there any extenuating circumstances ~ morally and pragmatically valid circumstances ~ that led parents to reasonably trade $55/month coverage for free coverage (in violation of the free program's mission)?
Or were they simply being greedy, as most humans are wont to be when freebies are readily at hand?
Finally, I would ask: Was the free program administered responsibly? I suspect not. Otherwise, how could kids with existing (allegedly adequate) coverage pass through “due diligence” and screening to qualify for free coverage?
Who qualified these “85%” of enrollees who ~ it turns out much, much later, unbeknownst to the free program's leadership ~ already had perfectly good, affordably-priced insurance?
It took me two full months of tests and trials and waiting to get disapproved for Vermont's VHAP program (for unemployed and low-income residents) and approved for their Catamount program (for slightly less poverty-stricken unemployed and working-poor folks).
If Vermont can put me through a two-month mill (and I still don't have insurance yet; enrollment will take another month, and I'll have to wait 12 months for treatment of pre-existing conditions), why couldn't Hawaii's free program have been more rigorous in its application/approval processes?