This is the Cato Daily Podcast for Monday, August 13th, 2007. I'm Caleb Brown.

S-CHIP was a Republican-led plan meant to provide coverage to children whose families were too wealthy

for Medicaid, but not wealthy enough for private insurance.

The program has shortcomings, some of which mirror the problems in Medicaid.

So says Michael Cannon, the Cato Institute's Director of Health Policy Studies.

SCHIP is slated to expire at the end of September.

Should the federal government simply allow the program to last S-CHIP is slated to expire at the end of September.

Should the federal government simply allow the program to lapse?

It should.

That would be probably politically infeasible.

But look, this is a program that encourages the states to enroll more and more Americans into government health insurance

programs, including a lot of Americans who don't need the assistance.

It encourages the enrollees not to achieve self-sufficiency because like other welfare programs,

it creates a low-wage trap that discourages enrollees from increasing their incomes.

And it also does a lot to make private health insurance more unaffordable, including things like

crowding out private health insurance.

A lot of people just substitute government health insurance throughCHIP and Medicaid for the private health

insurance that they would otherwise purchase. So really what Congress should be doing

is just letting this program lapse. A lot of people would be concerned that those

who are enrolled in S-CHIP right now would not be able to get the health insurance and the health care that they need.

But, you know, we have an analog for this.

When Congress restricted eligibility for Medicaid among non-citizen immigrants essentially cut them from the Medicaid roles,

...