Starting in 2024, the Consolidated Appropriations Act of 2022 requires states to provide children up to age 18 with 12 months of continuous eligibility for Medicaid and Children’s Health Insurance Program (CHIP) coverage. Continuity of coverage is particularly important for children enrolled in Medicaid and CHIP who benefit from regular well-child visits. Disruptions in health coverage may lead to delayed care and higher costs for Medicaid and CHIP.
States already had the option of extending 12-month continuous eligibility to children through Medicaid or CHIP, but not all states adopted it. At the time of writing, 24 states had 12-month continuous eligibility for all children’s coverage, and nine more had 12-month continuous eligibility for some children’s coverage, often for CHIP but not Medicaid. Some states are interested in extending continuous eligibility even further, for 24 months. In 2022, the Centers for Medicare and Medicaid Services approved a waiver in Oregon that would give children continuous eligibility up to age 6 and 24-month continuous eligibility for older children.
Why this matters
Disruptions in health coverage may delay health care for beneficiaries and create higher administrative costs.
What we found
When all states adopt 12-month continuous eligibility in 2024, Medicaid and CHIP enrollment in states that do not already have it will increase by 239,000 children in an average month, an increase of 0.6 percent. Families will spend an estimated $292 million less on health care, an average of $1,222 less per year for each child newly enrolled in Medicaid and CHIP. Federal spending will increase by $458 million annually, and state spending will increase by $238 million annually, both only 0.1 percent increases in government spending on acute care for the nonelderly. Adopting continuous eligibility for 24 months would further expand child health coverage and reduce costs for families.
How we did it
We produce our estimates of health coverage and costs for 2024 using the Urban Institute’s Health Insurance Policy Simulation Model (HIPSM), a detailed microsimulation model of the health care system.
