In most respects, children have not been exempt from the impacts of the current economic downturn. The number of children living in poverty in the United States rose to 15.7 million in 2010—a 19 percent increase from 2008. Despite this bleak picture, a new report shows that the rate of uninsured children actually dropped by 14 percent during this same time. What accounts for these counterintuitive findings?
The new report from our partners at the Georgetown University Health Policy Institute’s Center for Children and Families (CCF) (click here for the executive summary) provides strong evidence that the uninsured rate for children decreased in the midst of the worst recession in decades because Medicaid and the Children’s Health Insurance Program (CHIP) were in place to prevent children from failing through the cracks.
CCF found that private insurance coverage of children eroded during this period—dropping by 4.5 percent. This is no surprise, since the recession cost millions of families their jobs and their employer-sponsored insurance (ESI). But public insurance coverage of children increased by 5.8 percent during this same time, filling the gap left by declining ESI. This is simple, hard evidence that public coverage programs are irreplaceable sources of coverage that protect children’s access to care when the economy falters.
Ironically—maybe only in the Alanis Morissette meaning of the word—it’s during these hard economic times, when Medicaid and CHIP are most needed as a safety net, that their funding is most at risk. As policy makers scramble to fill state budget gaps, they too often turn to harmful Medicaid and CHIP cuts such as reductions in provider payments, restrictions on covered services, and increased premiums and co-payments. The findings in the report emphasize why it’s essential that policy makers turn instead to the dozens of delivery and payment system reform options that can achieve savings in Medicaid and CHIP without undermining—and often by actually strengthening—these programs. (See our Medicaid Report Card for ideas on how your state can save money in Medicaid.)
The report also highlights the importance of the maintenance of effort requirement in the Affordable Care Act, which prohibits state policymakers from cutting eligibility for children on Medicaid and CHIP until 2019. The heartening findings in the CCF report would simply not have been possible had states been permitted to slash eligibility in these programs.
The full report includes state-specific data on children’s insurance rates, so check it out and see how your state did (only one state, Minnesota, had a statistically significant increase in uninsured children). With our economic woes likely to continue for some time, this report should renew our commitment to protecting Medicaid and CHIP. The health of our children depends on it.
—Katherine Howitt, Senior Policy Analyst and Patrick M. Tigue, Senior Policy Analyst