S-CHIP Legislation and Murray’s Laws

Over the past few weeks the Democrats have been pushing hard for an expansion of the S-CHIP medical insurance program to cover “children” up to age 25 and families making as much as four times the poverty level. Amazingly, however, the best they can do to argue for the expansion is to produce a child such as Graeme Frost, whose parents live in a 3,000 square foot Baltimore home worth at least $500,000 and own commercial property worth at least half that much. Graeme’s father owns his own business, and does not bother to pay for health insurance for himself and his family. Graeme and his sister attend a private school with an annual tuition of $20,000. A number of Democrats, including Senator Mikulski of Maryland, have objected that conservative bloggers who have pointed out these facts are attacking Graeme, who received S-CHIP help after an auto accident.

That’s ridiculous, of course—it is not personal criticism, and it is not unfair, to point out that the Frost family is relatively affluent and could afford health insurance—but two points about the story strike me as interesting.

First, Graeme is already covered by the program. Even if the Frost family were a splendid example of people who needed the help the program has been providing, they couldn’t support an argument for expanding the program. Charles Murray has observed that social programs obey a law of imperfect selection. The world is complicated. Programs never succeed in covering all those who might legitimately need their help. So, Murray observes, a pattern emerges: The media and various politicians find examples of people who need help but aren’t being covered; they use them to argue for expansion of the program; the program expands; more and more of those being covered don’t really need the help; so, the program costs more and produces fewer benefits per dollar spent. But there are still people who need help who aren’t covered, and the cycle repeats. Whether one sees the cycle as vicious, as Murray does, or as virtuous, as many Democrats evidently do, essential to its operation is finding people who have a legitimate need who aren’t currently covered by the program. Finding people who are currently covered and benefiting, whether legitimate or not, provides an argument for the continuation of the program, but not for its expansion.

Second, how do people like the Frosts end up being selected as examples of anything? I haven’t seen an explanation of how they were selected to represent the S-CHIP program. But their selection seems to me a symptom of something deeply troubling. Our politicians and their staffs, increasingly, don’t know anyone (household help excluded) who isn’t affluent. I suspect that most of them don’t know anyone who knows anyone who isn’t affluent.

This, I think, is responsible for what I see as the unreality of much political discourse about poverty, inequality, and similar issues. What someone like John Edwards says about these topics reveals astoundingly little acquaintance with the problems that poor and middle-class people face. No doubt, it’s always been a problem. Campaign finance reform, however, has exaggerated it, for reforms have had the (presumably unintended) consequence that politicians have to be wealthy or spend most of their time courting the wealthy for campaign contributions.

Whoever chose the Frosts as a poster family for the need for government health insurance had no idea that most Americans would love to be as well off as they are and are likely to resent being taxed to support them.

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