How to Improve Children’s Health Insurance Coverage Nationally

October 06, 2020 - Children’s health insurance coverage is not stable even under the Children’s Health Insurance Program (CHIP), a recent study published in Health Affairs discovered.

“The current insurance picture for children does not include the permanent, stable coverage guarantee that the elderly enjoy through Medicare,” the researchers wrote.

An economic down-turn could disrupt how many children get comprehensive health insurance coverage via employer-sponsored plans for their caregivers.  And even for those who have uninterrupted coverage through a parent or guardian’s employer, for low- and middle-income families, employers are less likely to have rich benefit options for children. This is particularly true for children with disabilities.

Families without employer-sponsored insurance or whose children have disabilities will often turn to Medicaid. This is particularly true among Latinx children and non-Latinx Black children. But Medicaid’s low reimbursement rate may limit provider options for families.

Marketplace coverage might offer some coverage but its benefits may also be scant and, if the child is eligible for another form of public insurance, then they no longer qualify for subsidies.

READ MORE: Medicaid, CHIP Amendments Help States Fight COVID-19 Outbreak

CHIP’s payment system and benefits function much like Medicaid’s, except insofar as CHIP’s state funding is capped.

Observing National Health Interview Survey adult and children coverage trends from 1980 to 2018, researchers found that, while adult uninsurance surged, children’s uninsurance sloped fairly consistently until 2015. The drop in uninsurance was especially steep between 2008 and 2015.

There were four key factors that drove this plunge in children’s uninsurance: expanded Medicaid and CHIP, streamlined enrollment and renewal processes, changes to public insurance eligibility and enrollment due to the Affordable Care Act, and efforts to cover immigrants and families with mixed-status.

Since 2015, however, these factors have been counteracted, leading to a owth in children’s uninsurance.

Efforts to reduce Medicaid eligibility errors, streamlined processes became encumbered again. The public charge rule compelled legal immigrants to stay away from public insurance programs. Narrowing Medicaid eligibility and delays or decreases in funding also contributed to the rise in children’s uninsurance.

READ MORE: Eligibility Process Impacts Medicaid, CHIP Improper Payment Rates

Children were more likely than adults to have Medicaid or CHIP in 2018 and less likely to be uninsured, with about 5.5 percent of children being uninsured, as opposed to 13.3 percent uninsurance among adults. In 2018, children’s enrollment in CHIP and Medicaid dropped by 2.2 percent.

Uninsurance among children varied widely based on state, demographic, and family income.

“Adolescents were disproportionately represented,” the study found. “Although Latino children were substantially more likely to be uninsured than non-Latino White, Black, or other children, White children represented the single largest group of uninsured children.”

When it comes to resolving children’s uninsurance levels, the researchers leaned toward a single payer model.

“Such an approach offers certain structural advantages: nationwide uniformity, durability, continuity, and the potential to universalize special coverage parameters that, similar to EPSDT benefits, have been expressly designed to meet the unique needs of children and adolescents,” the researchers argued.

READ MORE: CHIP and Medicaid Enrollment Down 2.2% Among Children in 2018

They also cited the potential for rectifying racial health disparities under such a model.

However, there is possibility for improvement under the current system without overhauling the healthcare system, the researchers acknowledged.

One strategy would be to bolster the Medicaid and CHIP programs. By creating a federally-funded, combined Medicaid-CHIP benefit that encompasses those up to 300 percent of the federal poverty level, more children could have stable coverage.

States could choose to expand the program up to 400 percent of the federal poverty level and families who fall outside of the income eligibility limits could buy into the program.

A program like this would likely cover over half of all children and, at 400 percent of the federal poverty level, it could offer almost universal coverage to uninsured children. However, this type of program would not offer coverage to parents.

Alternatively, states could focus on the Affordable Care Act marketplaces. Similar to the previous approach, the goal would be to extend coverage eligibility to 400 percent of the federal poverty level. The program could enrich existing benefits and utilize CHIP cost-sharing structures.

This option would be simpler for families since the entire family could be on one Marketplace plan, as well as greater affordable coverage access nationwide.

However, a program that focuses on Marketplace plans may inherit the more anemic benefit options. This could be fixed through Medicaid supplemental benefits or “wraparound” coverage for children with disabilities, such as those that already exist in employer coverage, but there may still be gaps for certain groups of children.

“Essentially, the two models are mirror images of one another, with each offering strengths and limitations,” the researchers explained.

“Either would, in our view, be compatible with strategies to improve coverage for adults, which is an extremely important step for children, given that the health and welfare of children depend on the financial well-being of the family and on whether and how well their parents’ health care needs are being.”