Hawaii Drops Universal Child Healthcare

Earlier this year, the state of Hawaii launched an ambitious program to provide free health care to children whose families did not have health insurance, or had very low incomes. Now, just seven months later, the state is abandoning the program. Why?

"People who were already able to afford health care began to stop paying for it so they could get it for free," said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. "I don't believe that was the intent of the program."

State officials said Thursday they will stop giving health coverage to the 2,000 children enrolled by Nov. 1, but private partner Hawaii Medical Service Association will pay to extend their coverage through the end of the year without government support.

Did Hawaii's oh-so-clever politicians really not foresee this? Hawaii is a highly taxed state with a cost of living significantly higher than in other states. The taxpayers who were footing the bill for this largesse saw that they were paying twice for child health care - first, for their private insurance, and then again for insurance for everyone else - not surprisingly many decided to cut their losses by dropping their expensive insurance and taking advantage of the free offering from the state. Why not? They were already paying for it with their taxes.

If you provide something valuable for free, people will take it, and they will take more of it than they would if they had to pay for it. That's both basic economics and basic human nature. Politicians never seem to get that.

And they wouldn't have acknowledged that reality in Hawaii either, if circumstances hadn't forced them to do so.

The Republican governor signed Keiki Care into law in 2007, but it and many other government services are facing cuts as the state deals with a projected $900 million general fund shortfall by 2011.

Signed into law by the Republican governor. Does anyone wonder why the GOP is in tatters?