PEDIATRICS Vol. 114 No. 5 November 2004, pp. 1338-1340 (doi:10.1542/peds.2003-0941-L)
COMMENTARY |
Gains in Children's Health Insurance Coverage but Additional Progress Needed
Health Policy Center, Urban Institute, Washington, DC 20037
Abbreviations: SCHIP, State Children's Health Insurance Program
Health insurance coverage for children has improved in recent years.1 Between 1999 and 2002, the proportion of children with insurance coverage increased by 2.6%. In all, 1.8 million fewer children were lacking coverage in 2002 (Table 1). These gains were concentrated among children in low-income families (those with incomes of <200% of the federal poverty threshold) and were driven by increases in public coverage. By 2002, 48% of all low-income children were relying on public health insurance coverage, through either Medicaid or the State Children's Health Insurance Program (SCHIP).
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These recent improvements in coverage followed expansions of public programs for children under SCHIP, which was created in 1997 as Title XXI of the Social Security Act. SCHIP gave states the option of using Medicaid programs, separate state programs, or some combination of the 2 to cover low-income children in families whose incomes were too high for qualification for Medicaid under Title XIX. States received higher federal matching rates under Title XIX than under Title XXI, but federal allotments were capped in a block grant.
When eligibility for public coverage was broadened, states began publicizing the availability of coverage under both Medicaid and SCHIP and simplifying enrollment. It appears that these efforts were successful. Awareness of and familiarity with Medicaid and SCHIP increased between 1999 and 2002.2 More importantly, these efforts and related efforts by private foundations and other groups appeared to translate into higher rates of SCHIP enrollment among eligible children.3 Medicaid enrollment among eligible children also increased to the highest level since Medicaid coverage was expanded in the late 1980s. By 2002, 4 of every 5 Medicaid-eligible children were participating.3 That is, among children who were eligible for coverage and who did not have employer-sponsored or nongroup coverage at the time of the interview, 
80% were currently enrolled in Medicaid. As a result, the uninsurance rates for both Medicaid- and SCHIP-eligible children decreased during this 3-year period.
Despite these advances, as many as 8 million children remain uninsured. Moreover, uninsurance rates are highest among children living below the federal poverty level, almost all of whom qualify for Medicaid coverage, and low-income children remain almost 3 times as likely as children from higher-income families to be uninsured. Short periods of uninsurance can accompany employment changes and other transitions, most uninsured children have lacked coverage for 
1 year.4
Although the vast majority of low-income, uninsured children have parents who say they would enroll their children in Medicaid or SCHIP if they were told their children were eligible for coverage.2 Yet, the prospects for additionally reducing uninsurance rates appear dim. The gains in coverage were made during a period of economic expansion and unprecedented support for public health insurance. Since then, the economic downturn has reduced access to employer-sponsored coverage.5,6 Indeed, census data suggest that progress in providing coverage for children has stalled; according to the current population survey, uninsurance rates for children have not improved since 2000.7,8 Moreover, families with employer-provided coverage saw their premiums increase 13% between 2002 and 2003, after an even greater increase (19%) the previous year,9 a trend that will likely continue. Many poor uninsured children live in families without access to employer-sponsored insurance coverage, and their only route to coverage is through public programs.10
Medicaid and SCHIP now provide an important safety net for many low-income children. Together, they could protect as many as one-half of all children from losing coverage should the economy or employer-sponsored coverage deteriorate more.11 Indeed, it appears that Medicaid and SCHIP have offset declines in employer-sponsored coverage for children in the past 2 years.7,8 However, the fiscal crisis facing most states and the rapid rate of growth in Medicaid spending in the past several years are testing states' resolve to maintain coverage for children.12
To date, the popularity of SCHIP and high federal matching rates (which range from 65% to 84% of total program costs) have protected most SCHIP-eligible children from outright cuts in eligibility.13–15 The block grant financing structure of SCHIP has not constrained SCHIP spending, because all except a few states have unspent SCHIP allocations from previous years. This may change in the coming years, however, because many states are projected to face shortfalls in federal matching funds.16
Most states have maintained their eligibility criteria thus far,14 but a few have lowered the income cap for eligibility or started placing children on waiting lists. Recent research suggests that states are enacting other cuts that are likely to decrease rates of participation by eligible children. Specifically, 5 states rescinded 1 of the eligibility simplification strategies, including removal of asset tests or 12-month continuous eligibility,14 and others decreased outreach efforts.13 A 2003 survey on Medicaid indicated that 45 states plan to reduce or freeze provider payments, 20 states plan to decrease benefits, and 21 states plan to increase beneficiary cost-sharing requirements in fiscal year 2004.17
In addition, a number of states that had expanded coverage to parents have either rolled back parental eligibility or postponed implementation of planned expansions. This cost-containment strategy has clear implications for parents, but it could also harm children, because parental coverage increases children's participation in public health insurance programs and leads to greater access to curative and well-child care for children.18,19 Moreover, policies that make individuals and not whole families eligible for public coverage are unlikely to address the health and psychologic needs of parents, which, if unmet, may pose problems for children.
Although progress has been made in providing coverage for children, the challenge now is to prevent backsliding and to broaden access to needed medical care. States' current fiscal crises and state variations in both fiscal capacity and coverage of children might suggest that the federal government should bear more responsibility for insuring low-income children.12,13 Without changes in the financing and structure of Medicaid and SCHIP, disparities in children's insurance coverage will persist and some of the nation's poorest children will go without insurance.
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FOOTNOTES |
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Accepted May 6, 2004.
Address correspondence to Lisa Dubay, ScM, or Genevieve Kenney, PhD, Health Policy Center, Urban Institute, 2100 M St, NW, Washington, DC 20037. E-mail: ldubay{at}ui.urban.org
"The great majority of DTC [direct-to-consumer] ads are for very expensive me-too drugs that require a lot of pushing because there is no good reason to think they are any better than drugs already on the market. There is overwhelming evidence that the ads work. People go to their doctors and ask for the new drugs, and very often get them. . . . Drug companies are required by law to send their DTC ads to the FDA when they launch a new ad campaign, and the agency is supposed to check that the ads present a ‘fair balance’ between risks and benefits."
Angell M. The Truth About the Drug Companies. New York, NY: Random House; 2004
Noted by JFL, MD
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REFERENCES |
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 TOP REFERENCES |
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- Kenney G, Haley J, Tebay A. Children's insurance coverage and service use improve. In: Finegold K, ed. Snapshots of America's Families III. Washington, DC: Urban Institute; 2003
- Kenney G, Haley J, Tebay A. Familiarity with Medicaid and SCHIP programs grows and interest in enrolling children is high. In: Snapshots of America's Families III. Washington, DC: The Urban Institute; 2003
- Dubay L, Moylan C, Oliver T. Covering the uninsured: can states take the lead? J Law Health Care Policy. 2004;7 :1 –41
- Haley J, Zuckerman S. Is Lack of Coverage a Short- or Long-Term Condition? Washington, DC: Kaiser Commission on Medicaid and the Uninsured; 2003. Publication 4122
- Holahan J. Changes in employer-sponsored health insurance coverage. In: Finegold K, ed. Snapshots of America's Families III. Washington, DC: Urban Institute; 2003
- Bureau of Labor Statistics. Employee Benefits in Private Industry. Washington, DC: Bureau of Labor Statistics; 2003. Available at: www.bls.gov/news.release/pdf/ebs2.pdf. Accessed September 24, 2004
- Mills RJ, Bhandari S. Health Insurance Coverage in the United States, 2002: Current Population Reports. Washington, DC: Census Bureau; 2003
- Mills RJ. Health Insurance Coverage: Current Population Reports. Washington, DC: Census Bureau; 2002
- Kaiser Family Foundation and Health Research and Education Trust. Employer Health Benefits: 2002 Annual Survey. Menlo Park, CA: Kaiser Family Foundation; 2002
- Kenney G, Dubay L. Insurance Coverage for Poor Children: Prospects and Challenges. Washington, DC: Urban Institute; 2003
- Dubay L, Haley J, Kenney G. Children's Eligibility for Medicaid and SCHIP: A View From 2000. Washington, DC: Urban Institute; 2002. Assessing the New Federalism Policy Brief B-41
- Holahan J, Bruen B. Medicaid Spending: What Factors Contributed to the Growth Between 2000 and 2002. Washington, DC: Kaiser Commission on Medicaid and the Uninsured; 2003
- Hill I, Stockdale H, Courtot B. Squeezing SCHIP: States Use Flexibility to Respond to the Ongoing Budget Crisis. Washington, DC: Urban Institute; 2004. Assessing the New Federalism Policy Brief B, A-65
- Cohen Ross D, Cox L. Preserving Recent Progress on Health Insurance Coverage for Children and Families: New Tensions Emerge. Washington, DC: Kaiser Commission on Medicaid and the Uninsured; 2003. Publication 4125
- Howell E, Hill I, Kapustka H. SCHIP Dodges the First Budget Ax. Washington, DC: Urban Institute; 2002. Assessing the New Federalism Policy Brief A-56
- Park E, Ku L, Broaddus M. OMB Estimates Indicate That 900,000 Children Will Lose Health Insurance Due to Reductions in Federal SCHIP Funding. Washington, DC: Center on Budget and Policy Priorities; 2002
- Smith V, Ramesh R, Gifford K, Ellis E, Wachino V. States Respond to Fiscal Pressure: State Medicaid Spending Growth and Cost Containment in Fiscal Years 2003 and 2004. Washington, DC: Kaiser Commission on Medicaid and the Uninsured; 2003. Publication 4082
- Davidoff A, Dubay L, Kenney G, Yemane A. The effect of parent's insurance coverage on access to care for low income children. Inquiry. 2003;40 :254 –268[Web of Science][Medline]
- Dubay L, Kenney G. Expanding public health insurance to parents: effects on children’s coverage under Medicaid. Health Serv Res. 2003;38 :1283 –1301[CrossRef][Web of Science][Medline]
PEDIATRICS (ISSN 1098-4275). ©2004 by the American Academy of Pediatrics
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