A unique and unprecedented set of public policy circumstances create a grave risk for the stability of health coverage in the year ahead for millions of children and families.
First, some background. In response to the COVID-19 pandemic, Congress and the Trump Administration enacted a law in 2020, known as the Families First Coronavirus Relief Act, that promised continuous coverage for anyone enrolled in the Medicaid program as a condition of states receiving extra federal money –specifically a 6.2 percentage point increase in a state’s federal Medicaid matching rate.
What this means in practice is that while states have been getting this extra federal funding, they not been able to disenroll anyone in Medicaid since March 2020 — unless the person moved out of state or requested a disenrollment. It appears from early data that the uninsured rate in the U.S. did not go up as much in 2020 as many feared it would – and Medicaid’s continuous coverage protection is one key reason why.
These provisions are in place for the duration of the federal COVID-19 public health emergency – a declaration made by the Secretary of the Department of Health and Human Services – unless a state decides to give up the extra federal funds early, in which case this unwinding process will begin sooner. Some state legislatures are being pushed to do this as we speak. Other legislatures are considering bills that would require the state to complete the unwinding process in 60 days, which if enacted will undoubtedly provoke large coverage losses for children and adults in Medicaid.
Children’s enrollment in Medicaid/CHIP has grown by 11.4 percent during the pandemic, and as a consequence, more than half of all children in the United States are now insured through Medicaid or CHIP –– the vast majority through Medicaid. Medicaid is clearly the backbone of children’s coverage in the United States.
In our report released today, we point out that the estimated 37.3 million children who are insured through Medicaid are currently protected by this continuous coverage requirement.
When the federal public health emergency is terminated (and our current best guess is that this will happen in July) states will begin a process of checking eligibility for everyone on Medicaid – not just children but everyone. This mass and unprecedented eligibility redetermination process holds great risk for children and that risk will vary depending on where they live. (My colleague Tricia Brooks will explain that in part two of this blog series.)
Children may lose coverage during this process in one of two ways – either because they have become ineligible for Medicaid and must transition to a new source of health coverage but get lost on the way or due to procedural reasons. In most cases, the new source of coverage children should be transitioning to would be the state-run Children’s Health Insurance Program (CHIP), but a smaller number of children may be eligible for employer-sponsored coverage or the subsidized Affordable Care Act marketplaces.
It’s worth noting that another wrinkle in this process is that children will often be eligible for a different coverage source than their parents – who will be more likely to be eligible for the federal and state subsidized marketplaces. Federal and state policymakers must adjust their consumer communications to account for this fact.
Most children, however, will remain eligible for Medicaid but they may lose coverage due to procedural reasons – in other words the family does not successfully complete the renewal process — perhaps because the renewal letter got lost in the mail or a family has trouble with the paperwork.
Procedural denials are nothing new. What is new is the unprecedented increase in volume and challenged presented by the fact that renewals will have been paused for over two years, families have experienced many changes during the pandemic, and the loss of the extra federal funds will create pressure. We are likely to see record numbers of these denials as some states move very quickly to reduce Medicaid enrollment without taking the time to get it right.
For all of these reasons, we estimate that 6.7 million children are at very high risk of becoming uninsured during this process. We believe this is a conservative estimate. For context, in 2019 the last year for which we have American Community Survey Census data, 4.4 million children were uninsured.
Any gap in coverage is a problem for families and, of course, the providers who see them. As every parent knows, a child can fall on the playground and need stitches or break a bone at any time, and without coverage parents are left with very large medical bills. Going without health coverage lowers the chances considerably that a child will get needed routine preventive and primary care, be able to access needed medications for asthma or other chronic conditions, or access needed specialty care like behavioral health services, which are in high demand. Lack of health insurance has serious repercussions on family financial security and child development and school success. It is also important to note that research indicates that children in families of color – Black and Latino families – are more likely to experience coverage churn or gaps in coverage.
In short, when the public health emergency continuous coverage requirement lifts, states must take their time to ensure that children who are still eligible for Medicaid are not erroneously dropped due to red tape barriers — or lose the child in transition if a child has become eligible for CHIP. There are many ways that states can minimize the risk for children and families and my colleague Tricia Brooks will cover those in part two of this blog series.
In conclusion, because states run Medicaid and CHIP, it will be up to the nation’s Governors to ensure that millions of children don’t lose coverage during this process. With all of the concern that politicians have been expressing about children’s well-being as a consequence of the pandemic, I hope that Governors make the protection of children and families health coverage loss a top priority. The data is clear, being uninsured is bad for children’s health.