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Most people with private health insurance in the United States get it through an employer-sponsored insurance (ESI) plan. However, in recent years, the likelihood of having ESI has been falling, as it becomes more and more difficult for employers and employees to afford the costs of these plans.¹ Losing ESI is a particularly serious problem among low-income families, for whom purchasing private coverage on their own would represent a severe financial hardship. Policymakers recognize this hardship and provide assistance for some of these people through Medicaid and the State Children's Health Insurance Program (SCHIP).²

Eligibility for these two major public programs favors children over adults in virtually every state. In fact, almost 75 percent of all uninsured children are eligible for Medicaid or SCHIP, compared to only 14 percent of uninsured adults.³ This broad eligibility for children's coverage through public programs will be debated over the next year as Congress considers the reauthorization of the SCHIP program. It is likely that a number of important issues will be discussed as part of the reauthorization process, including how much federal funding is needed and whether the federal government should continue giving states the latitude to cover parents and higher-income children with SCHIP funds.

This data brief explores how well Medicaid and SCHIP actually protected health insurance coverage for low-income children in comparison to low-income adults (low-income is defined as those with income below 200 percent of the federal poverty level [FPL])(i.e., $38,614 for a family of four in 2004).⁴ Because the decline in ESI coverage did not occur uniformly across states, and because states have discretion regarding who is eligible for public coverage and how programs are administered, we ask, "Did public coverage tend to offset the reduction in ESI in some states more than in others?"

Notes from this section of the report

1 J Holahan, and A Cook, "Changes In Economic Conditions And Health Insurance Coverage, 2000-2004," Health Affairs Web Exclusive, November 1, 2005.

2 Some states cover parents using SCHIP funding under waivers granted by the federal government.

3 L Dubay, J Holahan, and A Cook, "The Uninsured and the Affordability of Health Insurance Coverage," Health Affairs, forthcoming.

4 Children are defined as being less than 19 years of age.

Note: This report is available in its entirety in the Portable Document Format (PDF).

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.

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