One commonsense policy change can make a huge difference in the lives of children. A new federal report released yesterday finds that the 12-month continuous eligibility period for children in Medicaid and CHIP that took effect on January 1, 2024 will protect more than 17 million children who live in states that previously did not have this policy in place. Approximately 1.3 million children are projected to be eligible for at least one additional month of health coverage during the year as a consequence of this new policy.
It has been a busy week for federal health policymakers with the release of a final rule on Medicaid and CHIP eligibility which contains some additional important protections for children covered by separate CHIP programs as I blogged about yesterday.
Previously states could choose to afford 12 months of continuous coverage but Congress stepped in and required this protection for all children in the Consolidated Appropriations Act. Continuous coverage ensures that income fluctuations do not cause children to lose coverage. Parents have the freedom to temporarily take on extra hours or move into higher paying jobs without worrying about their children losing their affordable health coverage – at least for that year. Importantly this policy also protects children from losing coverage due to red tape barriers such as frequent income checks that some states sometimes implement and makes life simpler for low- and moderate-income parents who have a lot to worry about these days.
The report issued by HHS Assistant Secretary for Planning and Evaluation (ASPE) estimates that the average monthly eligibility for Medicaid and CHIP will increase by 3.5 percent in states that did not previously provide 12 months CE. These projected gains will vary among the states Children who are older, non-Hispanic White, or are in families on the higher end of eligibility guidelines make up the greatest share of children gaining at least one month of eligibility.
Why is this policy needed?
Families with children are 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. The ASPE report cites several analyses of income fluctuation for families in the Medicaid and CHIP eligibility income range; for example an Urban Institute report finds that more than 1 in 10 families with children experienced a decrease in income of greater than 50 percent during a year, with the lowest and highest income families seeing the biggest drops. The report also cites research suggesting intra-year income fluctuations have grown over time and can have a substantial impact and lead to gaps in coverage for children. Another benefit of continuous coverage is the improved ability to monitor the quality of care managed care plans are delivering.
Even a short gap in coverage can result in a child missing needed care such as treatment for chronic conditions like obtaining medications for asthma; left untreated, these conditions are likely to result in visits to the emergency room and missed school days. Gaps in coverage can also create financial hardship. Children are not expensive to cover but they require frequent care. One broken bone or fall on the playground requiring stitches and a family could find itself deep in medical debt. Additionally, continuous health insurance 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.
Most states “get it” and are embracing this needed change and some are going further. So far, 11 states are in the process of protecting children from losing coverage due to red tape or family income fluctuations through Section 1115 waivers authorizing multi-year periods of coverage for children – especially young children. Twelve months is the floor, not the ceiling and these states have decided child health is a smart long-term investment. Unfortunately, one state (Florida) is trying to roll back this protection for children by challenging this law in court, even though ASPE projects a minimal impact on Florida’s Medicaid enrollment.
Of course, children have to be enrolled in order to get the benefit of 12 months continuous coverage so states should do everything they can to reach eligible children who lost coverage during the unwinding and others who are eligible but unenrolled.
