Every year, millions of children temporarily lose their health coverage under public insurance programs, only to be reenrolled later in the same program or a different one. Such lapses mean that children and their families face the prospect of not getting medical care when it's needed. And instability in program enrollment also results in high administrative costs for states, health plans, and providers alike.
According to two different reports supported by The Commonwealth Fund, coverage gaps are rarely the result of a rise in income or assets that renders a child ineligible for Medicaid or the State Children's Health Insurance Program (SCHIP). Instead, they are more likely to be a byproduct of the cumbersome coverage renewal processes families must periodically undergo, or of unnecessarily complicated transitions from one program to another.
Both reports outline how states and the federal government can implement policies to reduce this instability and even expand coverage for low-income children. For Instability of Public Health Insurance Coverage for Children and Their Families: Causes, Consequences, and Remedies, Laura Summer, M.P.H., and Cindy Mann, J.D., of Georgetown University focused on the experiences of four states--Louisiana, Rhode Island, Virginia, and Washington--that have implemented policies to improve coverage for children and their families. The researchers reviewed scores of national and state studies, interviewed Medicaid and SCHIP administrators, and spoke with providers and health plan representatives throughout the states.
Summer and Mann found that states can largely avoid instability in public coverage among eligible residents by adopting a few key policies, such as limiting the frequency of required renewals; developing easy, seamless transitions among public coverage programs; and setting affordable limits on premium costs.
Washington State's experience illustrates how requiring people to renew their eligibility on a frequent basis contributes to coverage gaps. In 2003, as a result of budget pressures, Washington eliminated "continuous" eligibility and required families to confirm their eligibility every six months instead of once a year. When the state reversed course yet again and returned to 12-month renewal periods, enrollment rebounded.
Allowing states the flexibility to automatically enroll people into Medicaid and SCHIP--using information state officials already have--could significantly extend health coverage to uninsured but eligible children and their families, according to the authors of Automatically Enrolling Eligible Children and Families Into Medicaid and SCHIP: Opportunities, Obstacles, and Options for Federal Policymakers. Stan Dorn, J.D., an senior analyst with the Economic and Social Research Institute, and Genevieve M. Kenney, Ph.D., a researcher and health economist at the Urban Institute, report that 62 percent of uninsured children qualify for, but are not enrolled in, Medicaid or SCHIP. Similarly, two-thirds of uninsured, poor parents qualify for Medicaid but are not enrolled.
Auto-enrollment has achieved remarkable success in other public and private benefit programs. For example, while only 10 percent of eligible workers choose to establish an individual retirement account on their own, about one-third enroll in a 401(k) retirement savings account when their employer offers it as an option. By contrast, 90 percent of eligible workers join a 401(k) when they are automatically enrolled by their employers and must actively decline participation.
Dorn and Kenney say, however, that legal and technical barriers now prevent auto-enrollment in public health insurance programs. Current law permits states to cover some uninsured parents based on information in their children's Medicaid case files. The states are forbidden, however, from providing Medicaid or SCHIP coverage based on the final income determinations of non-health agencies--the type of auto-enrollment that could reach eligible children.
The authors recommend that states be provided with additional flexibility to determine eligibility for public health insurance, as well as new resources for investing in information technology to make auto-enrollment simple and efficient. "Policymakers have an opportunity," they argue, "to empower states to do the hard work required to reach the remaining uninsured children and families who qualify for Medicaid and SCHIP."