The article states: "SCHIP was already displacing private plans for somewhere between one-quarter and one-half of all enrollees." I would like the author to provide some citation for this statement, because it's misleading and probably false.
If the author means uninsured families are more likely to buy into SCHIP than to buy a private plan on the open market, that is probably true, as SCHIP coverage is cheaper and better. Who wouldn't make that choice if they could? Bear in mind SCHIP is a means-tested program, so people over a certain income level don't qualify.
If the author means already-insured people are dumping employer-provided coverage to get on SCHIP, there are mechanisms in SCHIP to prevent that from happening and I doubt it happens very much if at all. I could be wrong,but I'd like to see some figures on that.
The bottom line is SCHIP insures the uninsured. The market has failed to insure more than 42 million people in this country.