By Joan C. Alker, Genevieve M. Kenney, and Sara Rosenbaum
Health Affairs, October 2020
Expansion of Medicaid and establishment of the Children’s Health Insurance Program (CHIP) represent a significant success story in the national effort to guarantee health insurance for children. That success is reflected in the high rates of coverage and health care access achieved for children, including those in low-income families. But significant coverage gaps remain—gaps that have been increasing since 2016 and are likely to accelerate with the coronavirus disease 2019 (COVID-19) pandemic and the associated recession. Using National Health Interview Survey data, we found that the proportion of uninsured children was 5.5 percent in 2018. Children continue to face coverage interruptions, and Latino, adolescent, and noncitizen children continue to face elevated risks of being uninsured. Although we note the benefits of a universal, federally financed, single-payer approach to coverage, we also offer two possible reform pathways that can take place within the current multipayer system, aimed at ensuring coverage, access, continuity, and comprehensiveness to move the nation closer to the goal of providing the health care that children need to reach their full potential and to reduce racial and economic inequalities.
SOURCES OF CHILDREN’S COVERAGE:
- EMPLOYER-SPONSORED COVERAGE: Tax-advantaged, employer-sponsored coverage is the dominant source of insurance among children in higher-income families. But for low- and moderate-income families, workplace benefits for children are increasingly unaffordable, as annual premium growth continually outstrips wage increases or might not be available at all.
- MEDICAID AND CHIP: Low- and moderate-income families without affordable employer coverage for their children rely chiefly on Medicaid and CHIP.
- MARKETPLACE COVERAGE: Subsidized Marketplace plans are an important but modest source of coverage for children, given that Marketplace subsidies are unavailable to children and adults who are eligible for other public insurance.
THE CURRENT LANDSCAPE:
Despite the major advances made, the current insurance picture for children does not include the permanent, stable coverage guarantee that the elderly enjoy through Medicare.
Coverage lapses remain a problem for children.
IMPROVING CHILDREN’S COVERAGE:
Given the limits of existing forms of coverage, there is much to be said for replacing the current system for children with a model akin to Medicare—that is, a nationwide, federally financed, single-payer public insurance plan that commences at birth and continues at least into young adulthood. Such an approach might be phased in, beginning with infants and young children, by specifying that no infant born after a certain date begins life without enrollment in the new system. This model, over time, would replace today’s multipayer arrangement and ideally would offer the full range of necessary care from preventive through long-term services and supports.
A single-payer model for children has been the subject of debate for decades, beginning soon after the passage of Medicare itself. Such an approach offers certain structural advantages: nationwide uniformity, durability, continuity, and the potential to universalize special coverage parameters that, similar to EPSDT benefits, have been expressly designed to meet the unique needs of children and adolescents. The other profound benefit of this model, and one that should be uppermost in policy makers’ minds in 2020, during the period of intense national reflection on the problem of structural racism, is that such a model could also help advance the cause of health equity relative to a multipayer model, whose components are determined by family income, as certain payers inevitably become associated with poverty and racial/ethnic characteristics—things that should play no role in determining the need for care or its quality and accessibility.
We recognize, however, that such a strategic direction involves a major overhaul of the system, with significant dislocation and commitment of new federal resources, which is very unlikely to happen quickly. Therefore, we identify two basic reform pathways that represent the next evolution of the current multipayer system for children.
One option would be to increase the mandatory income eligibility level for children under a combined Medicaid and CHIP benefit that sets the mandatory minimum level nationwide to 300 percent of the federal poverty level, which is fully federally financed.
Instead of going the Medicaid/CHIP route, policy makers could make major improvements in Marketplace coverage, including the elimination of the family glitch. Under this model, mandatory Medicaid eligibility could remain at 138 percent of the federal poverty level, while federally financed Marketplace subsidies would rise for families with incomes up to 400 percent of poverty, and subsidies that meet an affordability standard could be extended to families above that income level.
‘MediKids’ Would Insure More Children
By Don R. McCanne, M.D.
Los Angeles Times, June 1, 2000
Our current efforts at reform have failed miserably. The number of children enrolled in Healthy Families has been offset by the decline in the enrollment in the MediCal program and an increase in the number of children who have lost their coverage because of termination of employment-based plans in which their parents could have been enrolled. What we need is not incremental reform, but sequential reform aimed at universal coverage.
To this end, Rep. Pete Stark (D-Ca.) and Sen. Jay Rockefeller (D-W. Va.) have introduced the MediKids Health Insurance Act of 2000 (HR 4390 and S 2515), which would establish a separate Medicare program just for children. The unique, defining feature of this act is that every child would be enrolled automatically at birth in the MediKids program. Parents could opt out only by presenting evidence of comparable private coverage. Any lapse of that coverage would cause an automatic return to the MediKids plan. When fully implemented, MediKids would assure every child of having health care coverage.
Participation would be an entitlement, as are Medicare and Social Security. The modest premium component of the funding would be collected at the time of submission of income tax returns, with a graduated discount for low-income individuals, assuring that coverage would be affordable for all.
By Don McCanne, M.D.
Over the last half century, thanks to prior bipartisan support we have been fairly successful in ensuring health care coverage for children, but we have fallen short and coverage has deteriorated over the past three years.
The authors of the Health Affairs article excerpted above have stated it well: “there is much to be said for replacing the current system for children with a model akin to Medicare—that is, a nationwide, federally financed, single-payer public insurance plan that commences at birth and continues at least into young adulthood.”
The idea is not new. An article I wrote two decades ago discusses the MidiKids Act authored by Rep. Pete Stark and Sen. Jay Rockefeller which would have established a separate Medicare program just for children.
Also, Joe Biden is proposing lowering the age of eligibility for the existing Medicare program to age 60.
An important concept here is that these proposals would not be mere incremental steps in which patches are applied to the current highly dysfunctional financing system but rather they would be sequential steps to expand Medicare, as was originally intended when Medicare was established half a century ago.
Merely patching the current system would leave in place all of the dysfunctions that result in very high costs, profound administrative inefficiencies, lack of continuity of coverage and care, inequities in access and coverage, and would still leave millions exposed to financial hardship because of lack of adequate coverage.
Although sequential steps may seem like a better idea, they do not address the problem that Medicare itself has many serious deficiencies that need to be corrected. Also we have already waited 50 years to begin the sequential expansions, but we haven’t gotten beyond Medicare for some of the long-term disabled and ESRD coverage. If we did expand coverage to all children, how long would it be before we guaranteed coverage to those aged 18 to 65 (or Biden’s 60)? Possibly never if those prevail who believe that individual responsibility means you’re on your own rather than joining in solidarity to be our brothers’ and sisters’ keepers.
There are a great many features of a well designed, single payer, improved Medicare for All that would need to be included in a structural reform of health care financing. Though incremental tweaks are a terrible idea because they leave so many out, sequential reform building on our current system certainly has its deficiencies as well. Instead, let’s do it right and take one giant step across the chasm.
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