As states continue to grapple with insurance companies ceasing to write child-only insurance policies now that they are required to cover kids with pre-existing conditions, we are reminded of one simple fact – Medicaid and CHIP don’t exclude sick kids. These cost-effective public programs have long been a lifeline for low-income children, and for children with disabilities who’s health care needs may be more extensive. Medicaid often serves as a back-up plan for families whose private insurance is inadequate and doesn’t meet the medical needs of their children.

There is some progress among the states in addressing what insurers have identified as a primary concern driving them to exit the child-only market. Emergency rules, generally defining open enrollment periods which limit when insurers are required to guarantee issue policies to children, have been approved at least four states (OH,CO,OR, WA). In California Governor Schwarzenegger signed into law AB 2244, which legislates open enrollment periods and rating rules, and penalizes insurers who are unwilling to cover sick kids. In New Hampshire, the Insurance Commissioner issued a bulletin using existing state law together with the ACA to enforce “guarantee issue” for children. In Kentucky, the Insurance Commissioner has scheduled a “fact-finding” hearing where insurers will be asked to explain their decision to withdraw from the child-only market.

Meanwhile, in states where the insurers aren’t willing to step up or compromises are struck that result in continuing gaps in access, there are opportunities to advance coverage for children with pre-existing conditions through our public programs:

•  First, we can better promote the availability of Medicaid and CHIP and make it easier for families to enroll and retain coverage. Almost 60% of uninsured children are eligible and health status does not exclude them from enrollment.
•  Secondly, although CHIP requires that children be uninsured and many states have adopted waiting periods, those waiting periods are often waived for good cause such as involuntary loss of coverage. States could add exemptions to the waiting period for children with pre-existing conditions.
•  States can also implement policies allowing families to buy into Medicaid and/or CHIP. The Family Opportunity Act (FOA) explicitly provides states the option to allow children who would be eligible for SSI (were it not for income and resource limitations) to participate in Medicaid. The FOA requires that families participate in employer-sponsored coverage in certain circumstances, as well as pay monthly premiums. Another strategy that fourteen states have adopted is to allow families to buy-into Medicaid or CHIP benefits if they earn too much to qualify but lack affordable access to private coverage. Others can follow their lead.
•  Lastly, states can strengthen access to and benefits for children in state high risk pools and the federal government can ensure that children with pre-existing conditions are well served by the new Pre-existing Condition Insurance Program (PCIP).

Providing coverage to kids who have asthma or autism or cancer is something that garners nearly universal support from the public. Insurers and policymakers would be well served to recognize that Americans expect more than business as usual when it comes to covering sick kids. This is a problem we can solve if we put our values ahead of other interests.