Health Insurance

Health insurance plays a critical role in ensuring that children access the health care they need—and without it, the health status of children and the well-being of families is jeopardized. Studies have shown that lack of health insurance affects children in all aspects of their lives, not just their health. Those without primary or preventive care generally use inappropriate, more expensive services and have more serious medical problems. Their neglected health problems cause them to miss school and fall behind in their studies, possibly affecting future educational and employment opportunities, and may prevent them from achieving their full potential.

Because of the serious consequences of the lack of health insurance, providing children with medical care is a constant area of concern for the U.S. government. There are three major sources of health insurance for children in the United States: employment-based or privately purchased; Medicaid; and the State Children's Health Insurance Program.

According to the Census Bureau, 68.9 percent of children were covered by an employment-based or privately purchased health insurance plan in 1999. Privately purchased plans can be bought through numerous health insurance companies. While full-time employees may receive the option of health-care coverage for themselves and their families through pay-deduction contributions, this coverage is often not guaranteed.

If their health problems are neglected, children may lose out on important developmental activities. Over time, this loss can prevent children from achieving their full potential. (American Academy of Pediatrics)

In 1999, 20 percent of children were covered by Medicaid. Since its beginning in 1965, Medicaid has been instrumental in financing health-care costs for the poor. Medicaid is a jointly funded, federal-state health insurance program for certain low-income and needy people and is administered by the Health Care Financing Administration. It covers approximately 36 million individuals including children, the aged, people who are blind or disabled, and people who are eligible to receive federally assisted income maintenance.

While Medicaid offers a great deal of health insurance coverage to children, the Balanced Budget Act of 1997 took the government's efforts one step further by allowing states to expand Medicaid eligibility with an enhanced federal match. Once passed, the Balanced Budget Act of 1997 restored Medicaid to those who previously lost the entitlement after passage of the Personal Responsibility and Work Opportunity Act of 1996. It also granted states greater flexibility when determining eligibility.

A major provision of the Balanced Budget Act of 1997 was the State Children's Health Insurance Program (SCHIP), also known as Title XXI, which allowed for more than $40 billion to be given to states over a ten-year period. This stipulation allowed states to implement Medicaid eligibility expansions and provisions to ensure enrollment of all children qualified for Medicaid under federal legislation. The passage of Title XXI helped form health insurance programs in each state for infants, children, and teens. For little or no cost, these state insurance programs pay for doctor visits, prescription medicines, hospitalizations, and much more. Although each state has different eligibility rules, most states insure children who are eighteen years or younger and whose families earn up to $34,100 a year (for a family of four).

SCHIP has been widely supported, and in 1999 the American Academy of Pediatrics (AAP) recommended that states implement the following to ensure that all children who are eligible for Medicaid are enrolled in the program:

• immediately extend Medicaid coverage to all children at or below the federal poverty level who are younger than nineteen years old to take advantage of the enhanced federal match offered under Title XXI;
• ensure that Medicaid-eligible children who lose cash benefits under the Supplement Security come program as a result of welfare reform remain enrolled in Medicaid;
• eliminate asset testing to determine Medicaid eligibility;
• guarantee twelve months of continuous Medicaid eligibility for children younger than nineteen years;
• adopt presumptive Medicaid eligibility options for children younger than nineteen years, similar to the option available for pregnant women;
• ensure that a redetermination of eligibility be made before disenrolling any children from Medicaid because of changes in their eligibility for cash assistance under the Temporary Assistance for Needy Families program; and
• ensure that children who are removed from their homes by the state are immediately enrolled in Medicaid.

The AAP and other national organizations strongly support the expansion of Medicaid because of the countless children who have yet to benefit from it. The AAP estimated that in 1997, approximately
4.5 million uninsured children were eligible for Medicaid but were not enrolled. Another 4.6 million children who were privately insured were also eligible for Medicaid as a supplement to their private insurance but were not enrolled.