The Cato Institute's Michael Cannon penned an op-ed on the renewal of SCHIP:

Under SCHIP, the taxpayers fund health coverage for children in families of four earning as much as $72,000 per year, though not all eligible families enroll. Democrats in Congress want to open the program to families of four earning $83,000 per year or more. President Bush is OK with expanding SCHIP to cover well-off families - but only if the states enroll 95 percent of those lower-income children first.
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SCHIP casts a much wider net than suggested by its stated purpose - namely, providing coverage to children in families that earn too much to qualify for Medicaid (which ostensibly serves only the poor) but still can't afford private insurance. According to a study in the journal Inquiry, 60 percent of children eligible for SCHIP already had private coverage when the program was created.
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Worse still, SCHIP makes private coverage less affordable for everyone. Under Medicaid and SCHIP rules, the government agrees to pay a percentage of what drug makers charge private payers. Economists Mark Duggan of the University of Maryland and Fiona Scott Morton of Yale find that manufacturers respond by raising prices for private purchasers an estimated 13 percent.
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Congress should let SCHIP expire on Sept. 30 and replace it with the freedom to purchase health insurance from anywhere in the nation.

Some will complain that scrapping SCHIP would leave dependent families in the lurch. As a transitional step, Congress could convert federal Medicaid and SCHIP funding into a smaller, lump-sum payment to each state. That would serve as a halfway point toward eliminating these payments and simultaneously cutting taxes. States that want to maintain their current spending levels could raise the tax revenue themselves.