news-record.com

The contentious debate over funding a national health insurance program for children by raising the federal cigarette tax has caught North Carolina squarely in the middle.

Last session, state legislators set aside $7 million to start the N.C. Kids Care program to help middle-income families with the cost of children's health insurance.

At least some of the funding was expected from the federally funded SCHIP (State Children's Health Insurance Program), created a decade ago for families that earn too much to qualify for Medicaid but can't afford private coverage for their children.

For now, that funding is sidetracked. President Bush vows to veto legislation that greatly expands coverage and increases costs by $35 billion. Congress wants a whopping 61-cent-per-pack hike in the federal cigarette tax to pay the additional costs over five years.

Yet a regressive tax that hurts tobacco sales is too high a price to pay -- even for a worthwhile program. North Carolina tobacco farmers, already adjusting to the end of the federal tobacco quota system, will take a financial hit if demand lessens. It's unfair and unrealistic to expect the tobacco industry to pay the full funding tab.

Also worth a closer look is who qualifies for coverage. Under the rules, families earning up to 300 percent of the national poverty level -- about $62,000 for a family of four -- are eligible. SCHIP opponents argue that's too high and will only shift coverage away from private insurers.

As for revenue, taxing cigarettes is not a reliable, long-range source. To produce what Congress needs to fund SCHIP expansion, 22 million new smokers would be needed by 2017.

Such numbers are inconsistent with ongoing -- and effective -- federal efforts to reduce smoking as a means of improving the nation's health. In light of that initiative, adding smokers in the next decade seems unlikely.

The congressional funding plan simply doesn't add up. Higher cigarette taxes are supposed to discourage smoking, not encourage it. Also conveniently ignored are demographics showing that smokers targeted to pay the higher tax often have lower incomes. They're the same people SCHIP aims to help.

As the standoff between the president and Congress lingers, the state could be caught in a bind. What was expected to be a welcome funding fix for the state could wind up hurting existing, proven programs. Children who qualify may not get coverage.

Given the slim chance for a veto override, compromise is in order. While stopgap funding helps, it isn't the answer. Instead, both sides need to put aside partisan politics and come up with a fiscally sound plan that best serves families most needing it.