To win SCHIP battle, enlist employers

November 09, 2007|By Nicole Kazee

"We want to help kids more than you do."

That's what the Democrats have been saying in the battle for children's health insurance this fall, and it's not working. So it's time for them to try a new strategy and stress the real advantage of the State Children's Health Insurance Program: It favors working parents and the businesses that employ them.

SCHIP targets the group of people most likely to be uninsured: families that earn too much to qualify for Medicaid but can't get health care through their jobs. It's up for reauthorization this year, and the real battle is over which families will be eligible. Democrats want to allow states to offer SCHIP to families higher up the income scale, while Republicans want to limit it to the neediest children. President Bush vetoed one version of the bill, and a new version passed the House last month without a veto-proof majority.

Democrats have employed a blunt political strategy: Repeatedly accuse your opponents of hurting children, and hope the public catches on. But the public overwhelmingly supports expanding the program, and this has done little to change the minds of enough Republican lawmakers. And the argument that anyone wants to hurt children smacks of political manipulation.

But there is another strategy available. The fact that SCHIP targets kids with working parents means there is another important - and, so far, ignored - group of program beneficiaries: employers.

As health care costs skyrocket, employers (particularly small ones) are increasingly hard-pressed to provide insurance for their workers, let alone workers' dependents. Yet employees with health insurance - and employees whose kids have health insurance - are more productive and reliable than those without, regardless of who is paying the premiums. In other words, SCHIP takes the burden off the low-wage employers who find it difficult or even impossible to provide health insurance themselves.

And it's not just health care. A whole network of anti-poverty programs set up to benefit low-wage workers and their families, including food stamps, child care subsidies and the earned income tax credit, contributes to the stability and productivity of the labor force. All of this comes at very little cost to employers, who might even come out ahead if government programs substitute for private wages and benefits.

Why should Democrats care? Because employers are political pragmatists who have the power to help sustain the programs they like. What policy scholars know is that social programs that spread the benefits across large, politically diverse, powerful segments of the population are less vulnerable than programs that target narrow groups of the poor.

This is why an anti-poverty system that benefits workers and their employers would be likely to withstand budget crises and political battles like the present one. This is particularly true in a system where employers provide crucial political support for Republicans.

But employers will only support government programs if they understand how those programs affect them. Right now, very few do. Through conversations with business owners and their lobbying groups across the country, I have heard over and over that employers don't see the relevance of SCHIP to their bottom lines. Democrats, who have spent so much time in recent years demonizing Wal-Mart and much of the rest of corporate America, are partly to blame.

By drawing positive attention to the connection between SCHIP and employer labor costs, Democrats could bring historically conservative business leaders to the table in support of exactly the thing progressives want: the freedom for states to set high eligibility levels if they choose.

A partnership between low-income workers and low-wage employers would be revolutionary - and no doubt highly unsettling - in our polarized, class-based political system. But in failing to consider business as a potential ally, Democrats are threatening the future of the programs they hold most dear.

Nicole Kazee is a doctoral student in political science at Yale and a fellow at the Miller Center of Public Affairs and Demos. Her e-mail is nicole.kazee@yale.edu.

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