SCHIP Crowds out Private Insurance

A new CBO report on SCHIP (government-run health insurance for kids, recently expanded in PA under Governor Rendell’s “Cover All Kids”) remarks that government health insurance creates dramatic “crowd out” of private insurance:

On the basis of a review of the available studies, CBO concludes that the reduction in private coverage among children is most probably between a quarter and a half of the increase in public coverage resulting from SCHIP. That is, for every 100 children who gain coverage as a result of SCHIP, there is a corresponding reduction in private coverage of between 25 and 50 children. [emphasis added]

Funny, Governor Rendell makes no mention of this fact in his news release today on PA CHIP/Cover All Kids:

Now, it’s time to build on CHIP’s success story and crowd out expand access to health care for a few people everyone at great expense to taxpayers through Cover All Pennsylvanians program for adults that is part of my Prescription for Pennsylvania health care reform plan.