MediKid: The Evil Side of Doing Good

By Judy Cresanta
  • Tuesday, June 1, 1999

Under the guise of providing needy children with health coverage, the president and Congress enacted a wasteful program, dubbed "MediKid," as part of the 1997 budget deal. Before leaving office, Governor Bob Miller seized upon the Clinton initiative, which amounted to incrementalized "Hillary Care," naming it Nevada Check Up. It was part of a larger intrusive program called Family to Family made available shortly thereafter. Financed partly through Medicaid cuts and partly through increased taxes on the poorest Americans, MediKid was created out of a weak understanding of health insurance and children’s health care needs. Nevada will only compound the initial mistakes of the ill-conceived Clinton/Miller plans if it expands Nevada Check Up. In spite of its good intentions, the program neglects children’s real health needs and places them in a health care system where bureaucrats and politicians—rather than parents and health care professionals—control decisions and spending. Far from improving our children’s health, the proposed MediKid expansion will actually bring us ever closer to universal government-run health care.

Misinformation Leads to Waste

The Congressional Budget Office (CBO) estimates the MediKid program will cover 3.4 million children throughout the nation by July 1, 1999. This despite U.S. Census Bureau statistics which reveal there are only 2.8 million chronically uninsured children in America—not 10 million, as MediKid proponents claim. Moreover, roughly 800,000 of these children are already eligible for Medicaid. CBO figures show MediKid health coverage will cost taxpayers at least three times the cost of private coverage per newly covered child. Instead of creating a new federal program, Congress could have simply bought private health insurance policies for the same number of children and saved $16 billion.

People Aren't Stupid

Much of this waste can be found in the duplication of a need that is already being met by the private sector. Because of the high qualifying threshold (Nevada’s qualifies any family of four who earns less than $36,000), the MediKid program includes 1.4 million children who are presently covered by private insurance. In Nevada, nearly half of all eligible children already have private health insurance coverage. So the program would potentially move thousands onto the entitlement rolls.

Given the option of paying a premium for health care as opposed to receiving the service for free becomes a no-brainer for most people. Those who can afford to pay health insurance will simply drop the cost of their children’s coverage in favor of premiums between $10-50 and ultimately save thousands of dollars over the approximately 18 years spanning parental responsibility.

Ignoring the Poor

In January Nevada’s Division of Health Care Financing and Policy reported that only 1,381 children have been signed up for Nevada Check Up: 823 from Clark County, 249 from Washoe County and 309 from rural counties. Yet five months earlier, unnamed state officials gave a report to the Assembly Human Resources Committee that over 4,000 children were admitted to the program with the goal of 10,000 enrollees by July and 45,000 enrollees within two years. Aside from the obvious hyperbole employed by state bureaucrats to justify the program after Governor Kenny Guinn threatened to cut it, there is incredible shortsightedness built within the plan.

Poor people are not signing up for Nevada Check Up. Why? The program is still more expensive than the free health care available under already existing state Medicaid. Hospitals presently offer free medical care to anyone who qualifies under the hospitals’ indigent care programs. In the words of William Hale, chief executive officer of University Medical Center in Las Vegas, "Because two-thirds of the children targeted by the Check Up program live in Southern Nevada, I question whether parents will even apply for and pay fees under the program when they can come to the hospital for free treatment right now."

Countering Hale’s concerns, Chris Thompson, who drafted Nevada Check Up for the State Department of Human Resources said, "I feel pretty good that if we get the word out, parents will jump at the chance to insure their children for $200 or less a year." That logic would follow for those who are presently privately insured, but not for the truly poor who don’t have to pay anything now.

The bottom line is, needy families are afraid to sign up because they aren’t prepared to pay the initial $20-50 enrollment fee along with the additional required monthly premiums. A family of two earning $16,275 would pay a $20 initial enrollment fee while a family of five earning $38,500 would pay a $50 fee.

Fixing an Already Bad Deal?

Assembyman David Goldwater, seeing the Catch-22 inherent in the program, was quick to suggest that Nevada Check Up be rolled into the state Medicaid program. The bureaucratese response from Janice Wright, acting director of the State Health Care Financing Department, was that the simpler application for Nevada Check Up—two pages as opposed to 16 for Medicaid—would make the whole thing worthwhile. And with typical aplomb for application of the Peter Principle, the Legislature’s Interim Finance Committee approved the hiring of 12 additional people to man the program, leaving the option open to hire 10 additional employees "if the program warrants it."


Our state’s experience with entitlements tells us that Nevada Check Up’s costs will far exceed current projections. When this happens, lawmakers will face two choices: raise taxes or ration care. Higher taxes will make it harder for parents to protect their children’s health. The typical uninsured family already pays more in taxes than it spends on food, clothing and housing combined. The other option—rationing care—is even more frightening. While the federal law clearly states that eligibility is state-controlled, why is our state opting for such inherent absurdities in the Nevada Check Up program? Instead, Nevada should use this as an opportunity to rethink Medicaid, which has been eating up our state’s budget. Nevada could provide a refundable tax credit or provide vouchers by direct deposit to accounts for uninsured children that would at least not insulate the recipient’s family from the true cost of health care.

In any case, the primary goals of reform should include two important considerations. They should include the option for maximum consumer choice and work in a proactive—not reactive—way to ensure cooperation between the state legislature, state agencies and insurance companies. The alternative is Hillary Care at its worst.

Judy Cresanta is president of Nevada Policy Research Institute. She can be reached at

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