LA, Jindal should resist SCHIP expansion

Republican Gov. Bobby Jindal faces a quandary with a decision to expand Louisiana’s coverage of the State Children’s Health Insurance Program: change the rules to expand coverage at a seemingly small cost to the state, or philosophically oppose more big government that threatens to crowd out the private sector. What he does may signal how much acquiescence his administration is willing to make with big government.

A priority of the reinvigorated Democrat majority in the federal government is to expand offering of this program. A version of this was defeated in 2007 only because the Republicans held the White House, but with big government liberal Democrat Pres. Barack Obama now ensconced for a likely four years, the green light is on to expand the program to allow middle-class families, with incomes as high as more that $83,000 a year, to get government coverage as an overall effort incrementally to push the nation to universal health care.

Louisiana at least has resisted talk to this point of increasing coverage beyond current standards for the citizenry, commendable given the considerable crowding out of the private sector/government intrusion that expansion would entail. But policy-makers have discussed expansion to include children of legal immigrants to age five. Currently, these services are covered only pre-natal.

Keep in mind that Jindal himself could have benefitted from this kind of rule. When born in Baton Rouge, his parents had been in the country only about a year. Given that perspective, his administration may wish to take advantage of this change if it goes through at the federal level since it will cost relatively little, some tens of millions of dollars annually, from state coffers to expand the program this way.

But at the same time, note that only the lowest-income legal immigrants would qualify for this benefit. Which begs the question, why should the state be in the business of encouraging lower-income rather than higher-income people to locate here, which this program would do? Tending to lower-income citizens is difficult enough without adding an incentive for lower-income legal immigrants with citizen children to come here.

Given this dynamic and the extra money the state would have to pony up to fund the program, it is best for the state to reject this option, True, legal immigrants of low incomes will still come to the state and Medicaid may have to pay for their citizen children, but the reimbursement given by the federal government for that should not differ too much from what would be available under this new law. In other words, costs to the state should not be much different and could be lower by resisting expansion. In tandem, the symbolic message of rejecting bigger government would be valuable.

Despite the carrot dangled by the federal government (paid for by higher taxes on cigarettes that disproportionately would hurt the poorer), Louisiana should reject this option given both the symbolism and the fact that tough budgetary times make any new expenditures questionable. For both practical and philosophical reasons this expansion should not occur in Louisiana, especially with a conservative governor at its helm.