School-Aged Children Benefit from ACA “Stairstep” Provision

One piece of the ACA that has received less attention than others (outside CCF at least!) is the requirement for states to align eligibility for all children under 19, also referred to as the elimination of “stairstep” eligibility for kids. A recent USA Today article focused new attention on this provision. Under the ACA states must raise the federal minimum income threshold for all children under age 19 to 133 FPL. Before 2014, only children under age six were subject to this income floor; the minimum Medicaid income threshold for school-age children (6 to 19) was 100% FPL, though many states had already extended Medicaid to school-aged kids to create consistency for multiple children within families and across age groups. Twenty-one states were required to transfer these children in 2014 as a result of the ACA provision. States still receive the higher CHIP matching rate for these children.

This is not a Medicaid expansion in the same sense as the adult expansion. For one, it’s a requirement and not a choice for states. And generally this is not a coverage expansion– these kids already have coverage available today. Instead it’s a transfer of coverage for hundreds of thousands of school-aged kids from separate CHIP programs into Medicaid.

WHY is this provision still so important? As my colleague Tricia Brooks pointed out early on, the benefits for families are clear:

  • Children receive a richer set of benefits at a lower cost to their families. Medicaid’s early, period, screening, diagnostic, and treatment (EPSDT) requirement offers a richer, more comprehensive benefits package for children compared to separate state CHIP programs.
  • Families pay less because of Medicaid’s stricter cost-sharing protections. Case in point: When children moved from separate CHIP programs to Medicaid in six states (Alabama, Arizona, Delaware, Florida, Georgia and Utah), their families were no longer subject to monthly premiums.
  • It (generally*) simplifies things. Removing the eligibility “stairstep” gives parents and caregivers relief from some of the headaches that come with the red tape involved in navigating two sets of eligibility, coverage and cost-sharing rules for children in the same family (a simplification that is even more evident in states that chose to extend Medicaid to parents so all family members have similar coverage rules).

The importance of this provision is also heightened in light of the need to extend CHIP funding before next September. In Arizona, a natural (if unwelcome) test case of what could happen nationally if CHIP funds aren’t renewed, this provision mitigated the impact on children from the state’s decision to end KidsCare II, where most CHIP kids were covered. More than 20,000 children moved to Medicaid just before the state dismantled KidsCare II, protecting their coverage along with their families’ budgets. Without the stairstep transfer, these children would have joined the 14,000 children that lost their CHIP coverage at the end of January and now face more expensive, more limited care in marketplaces plans, or, due to the family glitch, may have even wound up uninsured.

So to recap: Medicaid continues to provide coverage and economic security to millions of families, and thousands of additional families have gained these benefits for their children. AND many Arizona families have been protected from losing coverage for their children altogether. Yet another place where Medicaid is quietly hard at work helping families keep their children healthy, in school and more financially secure. Medicaid – an unsung hero indeed!

*For more on the role transitions to MAGI have played in eligibility alignment, see Tricia Brooks’ posts here and here.

Elisabeth Wright Burak is a Senior Fellow at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.