Health Insurance for Children

Many Remain Uninsured Despite Medicaid Expansion Gao ID: HEHS-95-175 July 19, 1995

Expanding children's Medicaid eligibility has significantly increased the number of children who rely on Medicaid for health coverage. It has also cushioned the effect of declining employment-based health insurance coverage for children. Because of expanded eligibility, the proportion of children on Medicaid in working and in two-parent facilities has grown. Congress is considering welfare reform proposals that would encourage low-income mothers to work. However, many low-income jobs do not offer health insurance as a benefit. Even children who have full-time working parents and are part of two-parent households may lack health insurance. Although Medicaid has begun to help close that gap for some families, many more uninsured children are eligible for Medicaid than have been enrolled. Changes to Medicaid that remove guaranteed eligibility and change the financing and responsibilities of federal and state government may strongly affect health insurance coverage for children in the future. Children account for only a small portion of Medicaid costs. Because they represent almost half the participants, however, any changes to Medicaid disproportionately affect children. Changes to Medicaid that reduce the number of children covered, without any corresponding changes to encourage employers to provide dependent health insurance coverage or to provide other coverage options for children, could significantly increase the number of uninsured children in the future.

GAO found that: (1) policy changes helped increase the number of children enrolled in Medicaid by 4.8 million between 1989 and 1993, but the overall number of uninsured children did not decline because employment-based coverage for adults and children declined during the same period; (2) children were not as affected by the loss of employment-based insurance as adults because of expanded Medicaid coverage; (3) the percentage of poor children who were uninsured declined from 25 percent in 1989 to 20 percent in 1993, while the percentage of near-poor children who were uninsured increased during that time; (4) the Medicaid expansion increased the enrollment of children less likely to be on Medicaid and by 1993, more than half of Medicaid children had a working parent and almost half were not receiving Aid to Families with Dependent Children benefits; (5) the greatest increase in coverage was among children with at least one full-time working parent; (6) the South region had the greatest increase in the number of children enrolled in Medicaid, although it still has the greatest number of uninsured children; and (7) at least 2.3 million uninsured children were eligible but not enrolled in Medicaid because their parents were unaware of their eligibility or had difficulty in applying for Medicaid coverage.



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