We’ve been anxiously awaiting the release of final Medicaid and CHIP enrollment data for 2018, which was expected to be posted almost a month ago. The wait is finally over but not our concerns about what’s happening.
In the meantime, more stories about eligibility system issues in a handful of states and states conducting more frequent reviews of eligibility have been reported. And we wanted to get a complete picture so we found state sources of child enrollment data in three states – Arizona, the District of Columbia, and Tennessee – that are missing from the CMS data. The CMS data show a drop in child enrollment of just under 720,000 for the 48 states. When you add in data for the three missing states, the overall decline in children covered by Medicaid and CHIP nationwide tops 800,000 with 38 states showing net enrollment losses of about 920,000. Tennessee saw the largest percentage decline (10.1%), followed by Missouri (9%), Utah (7.3%), and Idaho (6.5%). States with the largest decline in the number of children enrolled in Medicaid and CHIP include California (153,000), Texas (146,000), Tennessee (88,000), Florida (69,000), Illinois (68,000), and Ohio (56,000). (See state by state enrollment data here.)
So the burning questions are: 1) why? and 2) are these children gaining coverage elsewhere, as the administration would have you believe, or are they becoming uninsured?
It’s true that the economy has improved, unemployment has declined, and there is even some evidence of a small uptick in the number of employers offering health insurance to their employees. And we agree that some portion of children leaving Medicaid and CHIP are likely gaining coverage through other sources. But the employer sponsored insurance market has long fallen short of providing coverage for low-income families. That’s why CHIP was created two decades ago – to fill the growing coverage gap for children in families with moderate income as the cost of private coverage rose and employer subsidies for dependent coverage declined.
Keep in mind that parents of children under age 18 represent only about one-third of the workforce, according to the Bureau of Labor Statistics. And they already had a lower unemployment rate in 2017 (3.5%) compared to workers without minor children (4.7%). According to the 2018 Kaiser Family Foundation Employer Health Benefits Report, only 57% of employers offer coverage but not all employees are eligible or opt to enroll. In total, only about 60% of employees in firms that offer insurance are covered. Offers of coverage and take-up rates are even lower for firms that employ mostly low-wage workers.
And even if a family is offered employer coverage, it doesn’t mean they can afford it. On average, families pay nearly 30% of the cost of employed-sponsored health insurance or over $5,500 annually. That’s almost 11% of family income for a family of three, earning income at 255% of the federal poverty level (the median income eligibility level for Medicaid and CHIP). This becomes more evident when you look at the American Community Survey data that shows only 25% of children in families earning less than 2.5 times the poverty level are covered in employer plans, compared to 77% of children in families with higher incomes.
Meanwhile, there is also no indication that children leaving Medicaid and CHIP are switching to coverage through the marketplaces. In fact, federal marketplace data show the number of children under age 18 in families selecting marketplace plans nationwide during open enrollment fell by about 21,000 between 2018 and 2019 (after declining by about 64,000 between 2017 and 2018).
So what is happening? Some states, like Georgia, Missouri, and Tennessee, are grappling with new eligibility system issues. Some states like Texas are adding red tape to their processes by conducting frequent reviews of Medicaid eligibility, giving families 10 days to respond, and allowing the system to automatically close the case without assessing ongoing eligibility for CHIP. Some states are conducting periodic eligibility reviews but doing so using different criteria to determine eligibility than was used for new applications (this gets weedy fast and I’ll save that for a new analytic brief we’re working on – stay tuned!).
While we can’t quantify exactly how many eligible children are becoming uninsured, history tells us that no doubt there are many. Prior to the enrollment and renewal simplifications put in place by the ACA that are now being reversed in some states, it was not unusual for a third of eligible children to churn in and out of coverage in a given year.
Consider that in 2017, for the first time in a decade, the nation’s historic progress reversed course with the child uninsured rate climbing from 4.7% to 5% in a year when enrollment in Medicaid and CHIP remained stable. What’s going to happen with children’s coverage rates now that close to a million low-income kids are no longer enrolled in Medicaid and CHIP? We’ll have to wait until the Census releases 2018 health insurance data in September to know for sure. But we don’t have to wait to double down on making sure that eligible children are not losing coverage.
[Editor’s Note: States revise their data retroactively so the numbers reported in this blog may change. For a more in depth look at what is causing the declining enrollment, please read this report.]