Lesson from Pandemic: Medicaid Continuous Coverage Works!

New report on child health coverage shows improvement in child health coverage, reversing a negative trend prior to pandemic 

This year’s annual report on child health coverage is out after a hiatus last year due to the lack of available Census data. We’re happy to report some good news. The rate of uninsured children declined from 2019 to 2021 from 5.7% to 5.4% — a bright spot for children during the dark days of the pandemic. The decline occurred largely due to a federal law that provided states with additional Medicaid funding to ensure that children, parents and others enrolled in Medicaid had stable coverage during the COVID-19 public health emergency.

Medicaid provided coverage for children whose families lost employer sponsored insurance during the early period of the pandemic. And the Medicaid “continuous coverage” provision protected eligible children from losing coverage due to procedural reasons, which is a common occurrence during “normal” times in many states. Children in families whose income ranges from approximately $30,000 a year to $55,000 a year saw the biggest improvement in coverage rates.

This improvement reverses a trend seen during the prior period (from 2016 to 2019) when the number of uninsured children went up for the first time in recent memory after former President Trump took office in 2017.

Most states saw coverage rates stabilize between 2019 and 2021.  Twelve states saw significant improvements child health coverage while 3 states went in the wrong direction. By comparison, our last report examining the period between 2016 and 2019 showed most states losing ground (26 states with increased numbers of uninsured children) and only one state improving.

The top spot this year goes to Oklahoma, which achieved the biggest improvement in its child uninsured rate seeing it drop from 8.6 percent to 7.4 percent. Children in Oklahoma had two things working in their favor – federal continuous coverage protection and the state’s successful implementation of Medicaid expansion following its approval at the ballot box. Medicaid expansion for parents and other adults took effect in Oklahoma in 2021 and the children likely benefitted from what we call a “welcome mat” effect — when parents become eligible for coverage they discover that their children are also eligible.

Continuous health insurance prevents harmful gaps in coverage, increases access to care including mental health services, checkups and vaccinations, and reduces expensive ER visits.  Gaps in coverage are harmful especially today when families are struggling to keep up with the rising cost of food, housing and other essentials. Families have been protected from high medical bills that can occur when a child breaks a wrist on the soccer field or falls on the playground and needs stitches. These lessons learned from the pandemic period should be incorporated by federal and state policymakers going forward.

As always, improvements in health coverage always seem to come with a catch. In this case, I unfortunately need to remind readers that this good news for children and families may be short-lived as the continuous coverage protection is likely to expire early next year. Currently, the federal COVID-19 public health emergency is in place until April 11. States manage Medicaid and if they do not do their job well or act hastily when the extra funding expires, we have estimated that the child uninsured rate is likely to more than double. Federal estimates show that 3 out of every 4 children expected to lose Medicaid coverage when the federal protection lapses will still be eligible, with children of color and families with limited English proficiency more likely to experience losses of coverage. Children and the providers who serve them are under stress with RSV, flu, COVID-19 and the ongoing mental health crisis. Preserving the continuity of coverage for children and their families is more important than ever.

In sum, Medicaid continuous coverage works. When this federal policy expires, Governors and state legislators will be responsible for protecting eligible children from falling through the cracks and becoming uninsured.

[Editor’s Note: The Consolidated Appropriations Act signed into law on December 29, 2022, included a provision requiring states to offer 12 months of continuous coverage for children in Medicaid and CHIP beginning on January 1, 2024.  For more information, see CCF’s brief.]

Joan Alker is the Executive Director of the Center for Children and Families and a Research Professor at the Georgetown McCourt School of Public Policy.