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This brief examines the potential effects of health care reform on the more than 25 million children who currently have coverage under Medicaid or the Children's Health Insurance Program (CHIP). Increased parental coverage will help these children since many have uninsured parents with unmet health needs. However, proposals to move these children into a new health insurance exchange could make them worse off through the potential loss of benefits and legal protections and possible exposure to higher cost-sharing; alternatively, if reimbursement rates are higher in the exchange than paid under Medicaid and CHIP, children's access to providers could improve.
Plans to overhaul our nation’s health care system are gaining momentum. Both houses of Congress are drafting health reform bills, and the president has identified health care reform as a top domestic policy priority for his first year in office. The broad goals of these health care reform proposals include moving the nation toward universal coverage, improving quality of care, and slowing the rate of health care cost growth. Detailed proposals have not yet been made public. However, available information suggests that reforms are likely to involve new subsidies for health insurance coverage, new enrollment approaches, some type of mandate for coverage and the creation of a health insurance exchange. A health insurance exchange would provide an organized health insurance market for the uninsured and others that would
be more efficient and transparent relative to the current market for
private insurance. Options under consideration that specifically pertain
to children with public coverage include shifting individuals who currently
have Medicaid and CHIP into commercial plans participating in the new exchange, perhaps with supplemental coverage from Medicaid or CHIP; increasing provider reimbursement rates under Medicaid and CHIP; and expanding Medicaid to additional parents and children.
Low-income children have much riding on the outcome of health care reform. On the one hand, health care reform has the potential to reduce uninsurance among children, which in turn should expand their access to needed care and improve their health outcomes. Likewise, if reform decreases uninsurance rates among parents, more of their health care needs will be met, which should improve their children’s health and well-being. On the other hand, if children with Medicaid and CHIP are shifted into commercial plans participating in the new exchange, the impacts on their access to care and health outcomes are not clear a priori since Medicaid and CHIP coverage differ from private coverage in several important ways. The effects will likely depend on what happens to covered benefits, the standard used to determine medical necessity, cost sharing requirements, and provider access and networks. The impacts will also likely depend on which children are shifted into commercial plans and on the health status and circumstances of the individual child, including the presence of special health care needs and the family’s financial capacity.
This brief provides background information on current coverage and access to care for low-income children and considers the potential implications of shifting children with public coverage into exchange plans. It closes with a discussion of how health care reform could be structured to take these implications into account.
Considering health care reform through the lens of how it might affect children is critically important. Improving the developmental trajectories and health behaviors of children and adolescents could yield large potential payoffs in the form of better health and functioning and lower chronic disease burdens during both childhood and adulthood.
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