Where Have All the Children Gone?

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Abstract

Even though most low income children in the U.S. are entitled to public health insurance, many children are still uninsured. One reason for this problem is that when insurance expires (after, for example, one year of enrollment) parents may fail to re-enroll their child. This report examines rates of renewal in three public health insurance programs in San Mateo County, California: Healthy Families, Healthy Kids, and Medi-Cal. Renewal rates were low in all three programs; only about 50 percent of children renewed coverage after a year. The report provides recommendations regarding improving monitoring systems for tracking retention over time.

Background

The San Mateo Children's Health Initiative (CHI) and other local coverage expansion initiatives in California have a goal of assuring that all low income children have health insurance. To accomplish this, they use outreach and enrollment assistance to identify uninsured children and enroll them in existing programs, Medi-Cal (California's Medicaid program) or Healthy Families (California's SCHIP program). For children not entitled to those programs (undocumented children and some higher income children) many counties have developed a new insurance program ("Healthy Kids").

The Retention Problem

Low retention in health insurance programs hampers such efforts to increase insurance coverage for children. For example, data from the 1996-1997 Survey of Income and Program Participation showed that only 59.7 percent of Medicaid children nationally retained coverage for a full year (Ku and Ross 2002). A more recent study in 10 states (including California) in 2002 also found a 60 percent one year retention rate for SCHIP children in a year with a substantial drop off to about 50 percent at 15 months (Wooldridge et al. 2005). One study of retention in Alabama, Colorado, Michigan, and North Carolina found that only 26 to 48 percent of children re-enrolled at the time of renewal (Hill and Lutzky 2003), and another study of SCHIP retention for two years in four other states (Florida, Kansas, New York, and Oregon) found that only from 16 to 58 percent of children remained enrolled for two full years (Dick et al. 2002).

Some of the drop-off in coverage is explained by shifts between Medicaid and SCHIP or acquisition of private insurance. However, 10 to 15 percent of publicly insured children who lost coverage became uninsured between 2001 and 2004 (Sommers 2005).

There are unfortunate consequences to these low retention rates. Children losing coverage may miss the opportunity to receive needed health care (Olson et al. 2005), and enrollment systems may use unnecessary resources to re-enroll children who drop off and return to the program.

Research has shown that states that have separate SCHIP programs (such as California) have lower program retention (Sommers 2005), since the programs (Medicaid and SCHIP) are separately managed and parents who loose coverage in one program must re-enroll their child in the other program. Not surprisingly, adding a third program—Healthy Kids—as many counties have now done adds additional administrative complexity.

Premiums can create a financial barrier to renewal of coverage. Premiums are not required for Medi-Cal, but they are required for Healthy Families and Healthy Kids. While premiums are modest for children below 250 percent of the federal poverty level (from $4 to $6 per month depending on family income), they are more substantial in the Healthy Kids program for higher income children (up to $20 per month per child). Research is unclear about the impact of premiums on renewal. In a study in Florida in which parents whose children did not renew were asked about the size of the premium, fully 86.4 percent said the premium was "about right" (Herndon and Shenkman 2005).

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Disclaimer: The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.