I know I'm late to the game here, but I also find it fascinating that the article quoted Democratic Caucus Chairman Rahm Emanuel as saying that the SCHIP reauthorization date was "spring training" for a future debate over universal health care.
You're right that the status quo isn't all that appealing. Of course, what the wider public doesn't seem to realize is that many of the unattractive features of the current system are directly related to government meddling. I've had conversations with folks and pointed out that the health care industry is the most highly regulated industry in the nation. They scoff at me, saying that there is virtually no government control over health care. Those of us who study health policy know that's not true, but how many in the public want to talk about certificates of need, state mandates on health insurance, rate setting, and the like?
Yes, it's hard to argue against something that is "for the children"--even if in many states it isn't! (Some states have more adults in the SCHIP than they have children).
I'd like to think that people have enough pride in themselves to respond to an appear along the lines of "do you want to subject yourself to a dreary government office, or would you like to handle this yourself?"
Perhaps government welfare programs for health insurance are like mass transit: not something that most people would want for themselves, but something that ought to exist "for other people."
Here's one problem we face: people rightly resist efforts to be forced onto mass transit (it works for some, granted), because they have and know a satisfactory alternative: the car. They know that it gets them to work, to the grocery store, to the kid's sports, and so forth, and can't imagine how a bus would do it.
And what's the common experience with private sector health insurance? Rising costs, "Explanation of Benefits" forms that explain little, horror stories of denied benefits, and so forth.
In other words, government-run systems don't appeal, but neither does the status quo.