How Will the Patient Protection and Affordable Care Act of 2010 Affect Children? (updated)

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Posted to Web: July 28, 2010
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Health reform is expected to have a number of positive effects on the lives of children age 18 and under. Millions of uninsured kids are likely to gain coverage through either Medicaid or the new health insurance exchanges. Expanded coverage for parents will also increase children’s coverage and access to care. New requirements on private plans, increased Medicaid reimbursement for primary care, and investments in public health and prevention will also likely have positive effects on children.

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Health reform is expected to have a number of positive effects on the lives of children age 18 and under. More children are expected to have health insurance coverage under reform, which in turn should increase their receipt of needed health care and ultimately improve their health and functioning. The single most important way that the estimated seven to eight million uninsured children will gain coverage under health care reform is likely to be through increases in coverage through Medicaid and the Children’s Health Insurance Program (CHIP) among the children who are already eligible for coverage under those two programs.

Children Below 133 Percent of the FPL

The role of Medicaid, which covers four to five times as many children and accounts for more than twice as many eligible but uninsured children relative to CHIP, has been expanded under health care reform to cover all children with incomes under 133 percent of the federal poverty level (FPL). When this expansion goes into effect in 2014, children between the ages of 6 and 18 who are currently in non-Medicaid CHIP plans will shift into Medicaid. Currently, children within a single family can be split between Medicaid and CHIP, and children can be required to transition from Medicaid to CHIP at their first or sixth birthday. Under reform, having a higher, uniform Medicaid eligibility standard should provide more continuity of coverage within families.

The combination of increased funding for outreach and streamlined enrollment/renewal procedures, the Medicaid expansion to parents, and the individual mandate to obtain coverage for both adults and children should increase participation in Medicaid and CHIP among the millions of uninsured children who are eligible for these programs but not enrolled. At the same time, however, federal matching rates will be lower on children than on new groups of adults gaining Medicaid eligibility under reform, possibly creating a greater incentive for states to enroll newly-eligible populations. It is therefore not clear how aggressively states will work to enroll and retain more eligible but uninsured children in Medicaid, which could lead to persistent gaps in coverage, particularly among poor children.

Children Above 133 Percent of the FPL

The uninsured children in families that have incomes too high to qualify for Medicaid and CHIP are likely to gain coverage either through their parents’ employers or through the newly established health insurance exchanges. Some families with incomes between 133 and 400 percent of the FPL will also be eligible for subsidies to purchase coverage in the exchanges. The exchange plans and other new health plans will be required to cover basic pediatric services, including oral and vision care, and to provide free preventive care and screenings for services that are recommended for children.

While health reform is expected to greatly reduce the number of uninsured children in this country, some children will remain uninsured due to citizenship and income restrictions on eligibility for Medicaid, CHIP, and the subsidies available for coverage through the exchanges. It is also likely that there will be shortfalls in participation in Medicaid and CHIP among eligible children and non-compliance with or exemption from the individual mandate due to economic hardship or other reasons.

Role of Parental Coverage

Health reform will benefit children, particularly those in low-income families, by increasing insurance coverage among their parents. Research shows that increasing insurance coverage for parents should benefit children by increasing the extent to which parents’ physical and mental health needs are being met and by increasing children’s coverage and receipt of care. Currently, more than 40 percent of poor parents and 33 percent of near poor parents are uninsured. Many of these low-income parents will gain coverage through the expansion of Medicaid to 133 percent of the FPL.13 It is also expected that the new outreach and enrollment efforts associated with health reform, combined with the individual mandate, will increase coverage among the millions of uninsured parents who are currently eligible for Medicaid. Coverage is also expected to increase among uninsured parents whose incomes exceed the Medicaid cut-off because of the new exchange

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