By Martha Heberlein

Health reform creates many new options for children and families to secure coverage; however, as more options become available, children may face more complex coverage arrangements. In fact, recent estimates suggest that 20 million children live in situations that may make accessing coverage challenging due to differing eligibility status within their families. As implementation moves forward, it’s important to consider these complex family structures and the measures that can be taken to ensure their access to coverage, especially as eligibility for and level of federal subsidies in these cases is not completely straightforward.

Employer-Sponsored Coverage Issues –

In 2009, 1.5 million children were either uninsured or were covered through a non-group policy while their parents had ESI (likely because their employer does not offer dependent coverage). 800,000 of these children have income that would make them subsidy-eligible (138% and 399% FPL) under reform.

Under reform, insurers are required to offer child-only policies. But will these plans be affordable for families, especially if they are already contributing to an ESI plan? Will such a contribution be taken into account when determining the subsidy towards the child-only plan? Will the family’s contribution be reflective of the fact that they’re purchasing child-only coverage and not a full-family plan?

Another question arises when considering the affordability of split-coverage families. If an employer’s offer is considered affordable (less than 9.5% of family income) for single coverage, but unaffordable for family coverage, who would be eligible for coverage in the exchange? Other family members? The employee? None of the above? If the rest of the family is able to purchase coverage on the exchange, would premiums paid towards ESI discount the required family contribution? (The average family premium for those with income between 138% and 200% of the FPL was 13% of income, so many families will likely fall in this group.)

Medicaid/CHIP Coverage Issues –

Medicaid and CHIP eligibility varies within a family now because of different income eligibility thresholds, as well as citizenship and immigration status. However, more than half of current Medicaid/CHIP-eligible children (19.3 million) have family incomes less than 138% of the FPL, making their parents eligible for Medicaid under reform.

An additional 16.2 million Medicaid/CHIP-eligible children have parents with income that makes them potentially eligible for subsidies. These families would then be split between Medicaid/CHIP and subsidized coverage in the exchange. If children enrolled in CHIP are required to pay premiums, will these payments be taken into account when calculating the family contribution towards exchange coverage?

Citizenship/Immigration Documentation Issues –

Children in immigrant families face many of the same issues that children in citizen families face, but complicated by the fact that their parents, depending upon their immigration status and length of time in the country may or may not eligible for Medicaid or exchange coverage.

There are an estimated 3.5 million citizen and legal resident children whose parents are undocumented immigrants. The vast majority of these children (3 million) are eligible for Medicaid or CHIP; 200,000 reside in families with incomes that would make them subsidy-eligible under reform.

Additionally, 700,000 children have parents who have been in the U.S. for less than 5 years. 500,000 of these children are eligible for Medicaid or CHIP, but their parents are not (due to the mandatory five-year waiting period). However, these parents could purchase coverage on the exchange.

Beyond that, there are 1.9 million children with parents of mixed-immigration status – such as one citizen parent and one legal resident parent – further complicating the coverage situation.

Children Living Apart from their Parents –

Nearly 28 million children live apart from at least one of their parents, with at least 6.5 million facing other eligibility complications related to income and/or immigration status.

Under reform, the parent who claims the child on his/her tax return is responsible for providing that child coverage, but that may not be the case under a child or medical support order. Who ultimately bears the responsibility for providing coverage? What happens if the child and “responsible” parent live in different states?

In addition there are 3.7 million children living without either parents, most (2.8 million) in kinship care. How will subsidy eligibility be determined for these children if they are not eligible for Medicaid or CHIP?

If reform is to be successful in providing children and their families coverage, there are a number of outstanding questions to resolve for those 20 million kids in complex family situations.