We often talk about how Medicaid is the MVP for children’s coverage – and it is – covering 37 million children today in Medicaid directly plus over half of children whose coverage is paid for by CHIP, for a total of 42 million kids. But if you look at public and private sources of coverage, the largest coverage source for children in the US is through a parent’s employer – 46.5 percent of kids. So while readers of SayAhhh! already know some of the impacts of ACA repeal on children in Medicaid and CHIP, we haven’t explored how ACA repeal would impact the millions of children covered by employer sponsored insurance (ESI).
To do just that, we’ve invited our colleague from the Center for Health Insurance Reform, JoAnn Volk, to shed some light.
Kelly: Thanks, JoAnn, for joining us in Medicaid and CHIP land to share some insight on children covered by private insurance. We’ve heard about ACA repeal will impact children and families in Medicaid and CHIP, but we haven’t seen much on how children and families covered by ESI will be affected. Are the tens of millions of children covered by ESI going to escape this debate unscathed?
JoAnn: I wish they were. The national focus has been on the impact of ACA repeal on coverage options through Medicaid and the ACA-created Marketplaces for individuals who qualify for financial help to buy coverage. But the truth is, many aspects of the ACA applied to the market for individuals buying coverage on their own and those who get their coverage on the job. I wrote about some of the impacts on ESI recently in Health Affairs. The list of potential impacts is long – preventive services without cost-sharing, pre-existing condition exclusions, dependent coverage to age 26, annual out-of-pocket limits, prohibition on annual and lifetime limits, and external review, to name the biggies.
Kelly: Let’s take a closer look at some of these provisions and how their repeal would impact children in particular. Let’s start with preventive services without cost-sharing – we know that children, especially very young children, need to see the doctor a lot to ensure healthy development. That could be very expensive for families, even families with relatively generous health coverage.
JoAnn: The ACA required all new plans to cover recommended preventive services without cost-sharing. That means no deductible to meet first, and no co-pays or co-insurance. For parents of small children, the savings can be substantial. According to expert guidelines for children, parents of newborns can expect to take their child to the pediatrician 8 times in the first year alone. Those visits and all annual exams thereafter ensure children are growing and developing as expected and getting recommended immunizations on schedule to prevent serious illness.
Kelly: Let’s turn to the prohibition on annual and lifetime limits next. As an example, can you describe how a return to annual and lifetime limits would impact a child born prematurely, perhaps needing to stay in the neonatal intensive care unit (NICU) for an extended period after being born? One in ten babies are born prematurely and may require this type of intensive care, which of course can be very expensive.
JoAnn: A long stay in the hospital can be very expensive, and the special services required for premature babies can add up quickly. For example, hospital charges for babies born before 32 weeks average $280,000. Prior the ACA, employer plans could carry annual and lifetime limits on the claims that would be covered by the plan. One pre-mature baby or complicated delivery could put a family’s financial security at risk.
Kelly: Most kids are healthy and may not develop any medical conditions until well in to their adult years. But some children develop chronic conditions early – like asthma and diabetes – and others have serious, acute illnesses like pediatric cancer. How would the return to health coverage exclusions based on pre-existing conditions affect children with chronic health conditions and those with serious, acute illnesses?
JoAnn: Many people know that the ACA bars insurers from excluding coverage for pre-existing conditions when people have to buy coverage on their own. But the ACA applies that protection to job-based plans, too. Prior to the ACA, families that became eligible for coverage on the job might face a waiting period for coverage of pre-existing conditions – up to 12 months if the family didn’t maintain continuous coverage between jobs. Families can now be certain their children won’t be denied coverage for conditions that require regular care.
Kelly: The ability for parents to keep their children on their health insurance until age 26 has been pretty popular. How would repealing this provision impact young adults and their families?
JoAnn: The requirement that health plans cover children up to age 26 was one of the early reforms of the ACA; families benefited from this protection right away. Until that time, most employer plans limited coverage for dependents to no more than 21 years of age, unless the child was a full-time student. Prior to this provision taking effect, young adults were one of the largest and fastest growing segment of the U.S. population without insurance. This provision, alone, brought coverage to 4.5 million young adults.
Kelly: Thank you for walking us through these things, JoAnn. Is there anything else you’d like to leave our readers with?
JoAnn: Most people are unaware of the many consumer protections that apply to employer-based plans, which covers more than 150 million people in the U.S. And these are protections that protect families from crippling out-of-pocket costs when serious illness or injury hits. But one mom with good coverage shared another important protection for her family, thanks to the ACA. For this family with a generous employer plan and financial security, coverage for their daughter’s diabetes was manageable. But what the ACA brought for them was peace of mind – that their budding violinist, full of potential and unlimited options, could chart her future without having to worry about how she’d get coverage for her diabetes once she was on her own.