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Maintaining Coverage for Children: Retention Strategies


Background

Some of the children dropping out of public coverage do so because they are no longer eligible for that coverage or they move to private coverage. However, children also inappropriately lose coverage for procedural, rather than eligibility-related, reasons. The evidence from the states is that this problem is substantial. One warning sign that children are losing coverage unnecessarily is the number of disenrolled children who then subsequently reenroll in the program within a short period of time (often called churning). A previous report from the Center on Children and Families for The Commonwealth Foundation showed the extent of children losing coverage and churning in states: 1
  • In Rhode Island, one of four Medicaid children had a gap in coverage over a 12- month period. In addition, about 60 percent of these enrollees returned to the program within the year.

  • In Virginia, over an 18-month period beginning in March 2004, about one-third of the children enrolled in Medicaid or SCHIP lost their coverage at some point.

  • In Washington in a three-month period in 2004, more than one-third (36 percent) of children whose Medicaid coverage was terminated were reenrolled after a gap in their coverage.
States report that there are a number of reasons children and families do not retain their coverage, including:

Administrative barriers. Renewal procedures can be confusing for families and/or create hardships. They may require time off from work (e.g., for a face-to-face interview with a case worker), completion of complicated forms, and submission of documents that are not readily available. In addition, some families may lose coverage during the year due to paperwork errors (e.g., they do not receive a bill for premium payments or paperwork is lost). 2

Changes in family circumstances. Low-income families often experience changes in their circumstances such as shifts in their employment status and family composition. Sometimes these changes affect their eligibility. More often, however, families assume, incorrectly, that they have become ineligible for Medicaid or SCHIP, and then do not seek renewal. 3

Costs. Premiums are a leading cause of disenrollment from public health insurance. 4 Many parents do not realize children can be barred from coverage for an extended time if they miss their payments. 5

However, improving the rate in which children enrolled in Medicaid and SCHIP retain coverage (called the retention rate) can have a high payout.
  • In California, for example, a study of Medicaid (Medi-Cal in California) enrollees in 2003 showed that over 600,000 enrolled children had been disenrolled from the program within a three-year period, only to be later re-enrolled. It cost California over $120 million to re-process these eligible Medi-Cal children. 6

  • After requiring renewal every six months rather than annually, and adding new verification steps, the cost of administering the Children's Medical Program in Washington State increased by more than $5 million annually. 7
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Legislative Authority

Footnotes

1. L. Summer & C. Mann, "Instability of Public Health Insurance Coverage For Children And Their Families: Causes, Consequences, and Remedies," Georgetown University Health Policy Institute, (June 2006). Back


2. A. Dick, R. Allison, S. Haber, C. Brack, et. al., "Consequences of States' Policies for SCHIP Disenrollment," (March 2002). Back


3. L. Ku & D. Cohen Ross, "Staying Covered: The Importance Of Retaining Health Insurance For Low-Income Families," Center on Budget And Policy Priorities, (December 2002). Back


4. Ibid; and op. cit. (1). Back


5. op. cit. (1). Back


6. G. Fairbrother, "How Much Does Churning in Medi-Cal Cost?," The California Endowment, (April 2005). Back


7. op. cit. (1). Back


Table of Contents

Summary

Background

Legislative Authority

Strategies

Resources


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