Keeping Kids Covered Under Healthcare Reform

By Michelle Chen Aug 26, 2009

Healthcare reform is supposed to expand coverage for all, but some advocates fear poor children will be left out. The federal Children’s Health Insurance Program, which Congress recently reauthorized, provides critical health coverage to poor children and pregnant women, including many kids whose parents don’t qualify for Medicaid due to restrictions based on income or citizenship status. Historically, a large portion of enrollees have been Black and Latino children, often with poor health status. The Democrat reform plan now in from House would essentially expand Medicaid, but also phase out CHIP. Within the next few years, reports Kaiser Health News, children in the program (now about 7 million) would be shifted into a health insurance exchange (a market-based system that might or might not include a public option). Though the latest revision of the House plan includes safeguards for children’s benefits, advocacy groups like First Focus still worry that healthcare reforms would ultimately hit poor families with higher costs or reduced services. Advocates are now pressing the Senate Finance Committee to incorporate protections for low-income children’s coverage in its parallel reform proposal. A coalition of advocacy organizations stated in a letter to Congress earlier this month:

Before moving children out of these successful programs, Congress should ensure that children will receive comparable or better benefits, cost-sharing protections and access to care under any new program.

Public health coverage for children is already riddled with gaps. According to census data, over a third of non-citizen children are uninsured. While about 7 percent of white children lack insurance, the rates for Black, Asian and Latino children range from 12 to 20 percent. With unemployment rising and tens of millions of people lacking insurance, expanding CHIP and Medicaid is, at least in theory, a good idea. But according to Physicians for a National Health Program, which advocates for a single-payer system, Medicaid is overstretched and becoming more unsustainable. At current funding levels, the group argues, “access to care for Medicaid enrollees is often little better than for the uninsured.” Moreover, the program can’t be expanded fast enough to keep pace the steady attrition of private and employer-based healthcare coverage. Don McCanne, PNHP’s Senior Health Policy Fellow, says the problem is that Medicaid expansion would still be tethered to a profit-hungry insurance industry:

This Medicaid expansion can be accomplished for only half a trillion dollars (federal component), that is if it is agreed that the program will continue to be chronically underfunded. If it is eventually decided that Medicaid must cover actual health care costs, then add those costs to this half a trillion dollars plus to the funds already obligated for the 60 million people now covered by Medicaid. … Keep in mind that all health care costs still must be met one way or another in a fragmented multi-payer system, but with the inevitability of inequitable cost shifting. This inequity potentially can have an adverse impact on the health and finances of tens of millions of Americans.

The recent reauthorization of CHIP expands funding to cover more uninsired kids. But if healthcare costs continue to spiral out of control, will efforts to widen the delicate safety net for poor children end up unraveling it? Image: South Bay Family Health Care