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Report: States Tread Water on Kid's Coverage as Shortfall Tsunami Looms

By John Reichard, CQ HealthBeat Story

JANUARY 23, 2009 -- States are making steadfast efforts to cover uninsured children in public programs but their ability to preserve recent gains hinges on congressional efforts to expand the State Children's Health Insurance Program and boost federal Medicaid spending, according to a new report.

Based on a 50-state survey carried out in summer and early fall of 2008, researchers from the Kaiser Commission on Medicaid and the Uninsured and the Center on Budget and Policy Priorities found that 19 states increased access to health coverage by uninsured children and parents in families of modest means while 10 states enacted at least one measure to restrict coverage. The most common restriction was to add or increase premium charges for coverage under SCHIP.

When states adopted their budgets for the fiscal year that began July 1, 2008, many were able to fund expansions of children's coverage, but with the severity of the downturn, state budget shortfalls are expected to total $350 billion for the period that includes the remainder of fiscal 2009 and extends through fiscal 2011, the study said. Even as projected shortfalls grew, states in some cases planned to go ahead with kids' coverage expansions but others put those plans on hold because of factors such as the unresolved reauthorization of SCHIP and the impact of the Aug. 17, 2007 federal directive placing new limits on SCHIP expansions.

Researchers who study child coverage trends say parents without health care benefits are more likely to sign up their uninsured offspring in public programs if they too can get coverage. But the study found that it continues to be more difficult for a low-income parent to qualify for health coverage than for a child. The median income at which children qualify for Medicaid or SCHIP is 200 percent of the federal poverty line, they said. But for working parents the median eligibility level maxes out at 68 percent of the federal poverty line and for jobless parents the level is just 41 percent, or $601 a month for a family of three in 2008.

"In 28 states, a parent in a family of three, working full-time at the minimum wage, earning on average, $1,082 per month, cannot qualify for Medicaid," the study added.

States can ease eligibility requirements and simplify procedures to maintain access to health coverage in a downturn, according to the study. States for example could choose to disregard unemployment compensation payments in cases where that money would put applicants over the income limit for Medicaid. Or they could pare back paperwork requirements or rescind requirements for face to face interviews as ways to simplify the enrollment process, the study said.

Pending SCHIP reauthorization and economic recovery proposals "could provide an essential boost that would enable states to sustain the coverage gains they have achieved and give families hard-hit by the recession the confidence that assistance with health coverage will still be available," the study concluded.

But Jay E. Berkelhamer, an Atlanta-based pediatrician who recently served as president of the American Academy of Pediatrics, told a Kaiser-sponsored briefing Friday on the findings that policies easing access to Medicaid coverage do not by themselves assure access to health care. Pediatricians are forced to cap the number of Medicaid covered children they treat because of low payment levels, he said.

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