States have the option under current law to provide 12 months of continuous health coverage for children in Medicaid and the Children’s Health Insurance Program (CHIP) so that children can maintain coverage throughout the year even as their family income fluctuates from month to month.¹ Under this option, states allow a child to remain enrolled for a full year unless the child ages out of coverage, moves out of state, voluntarily withdraws, or does not make premium payments.

Why is Continuous Coverage Important for Children?

Once enrolled in Medicaid or CHIP, it is critical that children stay covered without unnecessary administrative red tape. Even a short gap in coverage can result in a child missing needed care such as treatment for chronic conditions like asthma; left untreated, these conditions are likely to result in visits to the emergency room and missed school days.² Gaps in coverage can also create financial hardship. Even if just one family member is uninsured, the whole family is exposed to incurring medical debt, placing their economic security at risk. Additionally, providing children with continuous coverage leads to greater coverage rates which are associated with better health, reduced school absenteeism, and higher academic achievement for children and, potentially, fewer lost work days and lower medical debt for their parents.³

Hourly employees and those working in seasonal jobs or more than one part-time job are particularly likely to experience income fluctuations that occasionally may raise their incomes above the child Medicaid or CHIP eligibility thresholds for short periods of time, even when their annual income remains below the thresholds.⁴ An estimated 70 percent of mothers and 80 percent of fathers of children under age 12 working in hourly jobs have erratic schedules that fluctuate substantially.⁵ Providing children with a minimum of 12-months of continuous coverage protects them from experiencing a gap in health coverage due to temporary changes in household monthly income.

Which States are Working Towards Continuous Coverage?

Continuous coverage has proven to be a popular option for states. About two-thirds of states have adopted continuous coverage for children in Medicaid and/or CHIP (see map for details).⁶  Notably, Oregon recently became the first state to receive approval to expand upon this successful strategy by providing children continuous coverage from birth up to age 6 through a section 1115 waiver.⁷ This ground-breaking initiative will help infants and young children get off to a healthy start in life without parents having to worry about renewing their Medicaid coverage annually. Three other states (Washington, New Mexico, and California) are seeking to join Oregon in offering children multi-year continuous Medicaid and CHIP coverage.

Continuous health coverage produces a broad array of benefits for children, states, health plans, and providers. Specifically, the policy promotes health equity by limiting gaps in coverage for low-income children who experience disproportionate rates of health disparities, particularly children of color.⁸ A recent MACPAC analysis found children in states without continuous eligibility were nearly 50% more likely to have less than a full year of coverage.⁹

Consistent access to health care, including early detection of developmental delays and access to needed treatments, can help more children arrive at kindergarten ready to learn. It can also help drive more efficient health care spending as chronic conditions or delays are addressed earlier in life before they become more costly and complex to treat.¹⁰ Importantly, continuous coverage mitigates the negative effects of income volatility that low-income families are more likely to experience.

Continuous coverage reduces the administrative costs associated with enrollees cycling on and off of Medicaid due to temporary fluctuations in income (known as churn), allowing states to dedicate more of their Medicaid dollars to pay for health care.¹¹ Moreover, continuous coverage is critical for being able to fully measure the quality of health care in Medicaid and CHIP, which also opens the door to improved accountability and oversight of insurers including Medicaid managed care plans.¹²

Lessons from the Pandemic

During the pandemic, all children enrolled in Medicaid essentially had access to continuous eligibility as the Families First Coronavirus Response Act prevented states from disenrolling anyone from Medicaid during the public health emergency. Early data shows that the child uninsured rate improved during the first stage of the pandemic, which is especially noteworthy given it was during a period when people were losing jobs and their health insurance. In other words, the Medicaid continuous coverage provision appears to have contributed to stabilized health coverage – one bright spot during the dark days of the pandemic.

The continuous coverage protection will expire when the public health emergency ends, putting millions of children at risk of losing Medicaid. Of the children projected to lose Medicaid after continuous coverage protection is removed, an estimated 3 out of 4 will still be eligible.¹³ Unfortunately, there are numerous ways that children can fall through the cracks as states take up the unprecedented challenge of redetermining eligibility for over 80 million people currently covered by Medicaid.¹⁴

Children in states with more red tape and administrative barriers to enrollment will be at greater risk of unfairly losing Medicaid while children in states with 12-month continuous eligibility and other strategies in place will be better protected from becoming uninsured. One study found continuous eligibility is associated with a 31 percent reduction in the risk of application problems, suggesting that the policy is effective in reducing red tape barriers.¹⁵

Congress has time to act to protect children in every state before the continuous coverage protection expires. Congress could ease the transition by requiring all states to provide 12 months of continuous coverage to children. (The House of Representatives approved the establishment of 12 months of continuous coverage as the minimum standard for children in all states last November but the Senate has not approved the policy yet). About two-thirds of states already offer at least 12 months of continuous coverage in Medicaid and/or CHIP – Congress has the perfect window to extend that protection to children in all states before they face a potential loss of Medicaid coverage when the federal continuous coverage protection provided during the pandemic is removed.

1. Twelve-month continuous eligibility was authorized in the 1997 Balanced Budget Act. John R. Kasich, “Balanced Budget Act of 1997,” Pub. L. No. H.R.2015 (1997), available at https://www.congress.gov/bill/105th-congress/house-bill/2015. CHIP eligibility ends when a child turns 19, while states have the option to extend Medicaid to 19 and 20-year-olds. Children also may be disenrolled for nonpayment of premiums following the grace period, which can be as short as 30 days. 42 C.F.R. 457.342 (2016); 42 C.F.R. 457.570 (2013); Title XXI of the Social Security Act §2103(e)(3)(C) (2018).
2. Osorio, A., and Alker, J., “Gaps in Coverage: A Look at Child Health Insurance Trends” (Georgetown University Center For Children and Families, November 22, 2021), available at https://ccf.georgetown.edu/2021/11/22/gaps-in-coverage-a-look-at-child-health-insurance-trends/.
3. Park, E.,  Alker, J., and Corcoran, A., “Jeopardizing a Sound Investment: Why Short-Term Cuts to Medicaid Coverage during Pregnancy and Childhood Could Result in Long-Term Harm” (The Commonwealth Fund, December 8, 2020), available at https://www.commonwealthfund.org/publications/issue-briefs/2020/dec/short-term-cuts-medicaid-long-term-harm.
4. Smith-Ramani, J., McKay, K., and Mitchell, D., “Income Volatility: Why It Destabilizes Families and How Philanthropy Can Make a Difference” (Aspen Institute, December 11, 2017), available at https://www.aspeninstitute.org/publications/income-volatility-destabilizes-families-philanthropy-can-make-difference/; “Report on the Economic Well-Being of U.S. Households in 2013” (Board of Governors of the Federal Reserve System, July 2014), available at https://www.federalreserve.gov/econresdata/2013-report-economic-well-being-us-households-201407.pdf.
5. Ben-Ishai, L., “Volatile Job Schedules and Access to Public Benefits” (Center for Law and Social Policy, September 16, 2015), available at https://www.clasp.org/sites/default/files/public/resources-and-publications/publication-1/2015.09.16-Scheduling-Volatility-and-Benefits-FINAL.pdf.
6. Brooks, T. and Gardener, A., “Continuous Coverage in Medicaid and CHIP” (Georgetown University Center For Children and Families, July 19, 2021), available at https://ccf.georgetown.edu/2021/07/19/continuous-coverage-in-medicaid-and-chip/.
7. Chiquita Brooks-LaSure to Dana Hittle, “Oregon Section 1115 Demonstration Approval Letter,” September 28, 2022, available at https://www.oregon.gov/oha/HSD/Medicaid-Policy/Documents/2022-2027-1115-Demonstration-Approval.pdf.
8. Brooks, T. and Gardener, A., “Continuous Coverage in Medicaid and CHIP” (Georgetown University Center For Children and Families, July 19, 2021), available at https://ccf.georgetown.edu/2021/07/19/continuous-coverage-in-medicaid-and-chip/.
9. “An Updated Look at Rates of Churn and Continuous Coverage in Medicaid and CHIP” (MACPAC, October 2021), available at https://www.macpac.gov/publication/an-updated-look-at-rates-of-churn-and-continuous-coverage-in-medicaid-and-chip-abstract/.
10. Park, E.,  Alker, J., and Corcoran, A., “Jeopardizing a Sound Investment: Why Short-Term Cuts to Medicaid Coverage during Pregnancy and Childhood Could Result in Long-Term Harm” (The Commonwealth Fund, December 8, 2020), available at https://www.commonwealthfund.org/publications/issue-briefs/2020/dec/short-term-cuts-medicaid-long-term-harm.
11. Swartz, K., et al., “Reducing Medicaid Churning: Extending Eligibility for Twelve Months or to End of Calendar Year Is Most Effective,” Health Affairs 34, no. 7 (July 2015): 1180–87, available at https://doi.org/10.1377/hlthaff.2014.1204.
12. Association For Community Affiliated Plans, “FAQs: Churning, Continuous Eligibility and Administrative Burden,” Association For Community Affiliated Plans, available at https://www.communityplans.net/coverage-you-can-count-on/frequently-asked-questions-churning-and-continuous-eligibility/.
13. “Unwinding the Medicaid Continuous Enrollment Provision: Projected Enrollment Effects and Policy Approaches,” Assistant Secretary for Planning and Evaluation (U.S. Department of Health and Human Services, August 19, 2022), available at https://aspe.hhs.gov/reports/unwinding-medicaid-continuous-enrollment-provision.
14. Centers for Medicare & Medicaid Services, “June 2022 Medicaid & CHIP Enrollment Data Highlights,” Medicaid.gov, 2022, available at https://www.medicaid.gov/medicaid/program-information/medicaid-and-chip-enrollment-data/report-highlights/index.html.
15. Brantley, E., and Ku, L., “Continuous Eligibility for Medicaid Associated with Improved Child Health Outcomes,” Medical Care Research and Review 79, no. 3 (September 16, 2021): 107755872110211, available at https://doi.org/10.1177/10775587211021172.