The Complexity of Covering Children

Positive trends in children’s coverage made the news last week, with the Urban Institute reporting that 1.1 million children gained health coverage through Medicaid and CHIP between 2007 and 2009. While these coverage gains are quite impressive, they may soon be overshadowed by less desirable developments. A number of different factors could result in children’s coverage rates heading in the wrong direction in years to come.

First and foremost, the proposed Medicaid and CHIP cuts and program changes currently being debated (such as eliminating the maintenance of effort (MOE) requirement that protects eligibility standards or converting Medicaid funding into a block grant) would undoubtedly result in children losing coverage. The Congressional Budget Office estimates that repealing the MOE requirement would result in half of all states eliminating their CHIP programs and 1.7 million children losing access to CHIP by 2016.

A second and somewhat lesser-known challenge for keeping kids covered will be dealing with “complex coverage situations” when the Affordable Care Act (ACA) is fully implemented in 2014. “Complex coverage situations” are scenarios in which children are not covered by the same insurance program as their parent(s) or do not live in the same household as at least one parent. These circumstances can make finding, enrolling in, and retaining health coverage for children complicated and confusing – especially in 2014 when millions more people qualify for Medicaid, state insurance Exchanges officially roll-out, and parents are held newly accountable for obtaining coverage for their children.

According to a recent Urban Institute report, almost 42 million children fall under at least one of these “complex coverage” categories:

• -- 20.7 million children are eligible for different insurance programs than other family members (either because a parent’s employer-sponsored insurance does not cover dependents or because children qualify for Medicaid or CHIP and their parents do not)
• -- 27.7 million children live apart from at least one of their parents
• -- 6.5 million children fall into both categories

Many questions about how specific situations will be handed in 2014 remain unanswered. For example, if a parent has employer-sponsored coverage for herself but needs to buy a child-only policy in the Exchange, will her contributions to the employer policy be considered in determining the amount deemed affordable for the child-only policy? And will a parent who claims a child on his tax forms be penalized for not covering this child if a medical support order (a form of child support provided as health insurance under a parent's policy) deems a different guardian responsible?

Policymakers must begin working now to answer these questions and ensure that children in complex coverage situations benefit from the ACA. Subsidy determination processes must be clarified, outreach and enrollment strategies for children who qualify for different programs than their parents must be developed and implemented, and medical support orders must be made more consistent with the ACA’s coverage requirements. Failure to resolve these issues now may mean future coverage losses for some children—something none of us want to see.

—Maia Fedyszyn, Program Associate New England Alliance for Children’s Health